Editor's note: The DDN reporters have arrived in Beijing and will provide firsthand reports during the Two Sessions. This edition of "DDN Business Insider" is also our special preview of the Two Sessions. What key issues should we focus on this year?
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang. The National Two Sessions of 2025 will soon open in Beijing over the next two days. The DDN reporters have arrived in Beijing and will provide firsthand reports during the Two Sessions. This edition of "DDN Business Insider" is also our special preview of the Two Sessions. What key issues should we focus on this year? We have invited Tan Haojun, financial commentator and part-time professor at Zhongnan University of Economics and Law, and Wang Bin, co-founder of EEO Company and deputy secretary-general of the China Industrial Development Promotion Association, and Professor Xie Haoran, Acting Vice Dean of Lingnan University School of Data Science, Professor and Head of the Division of AI to provide their insights and analysis. Hello, everyone!
【Anchor】First of all, every year the Two Sessions introduce some new concepts. Last year, the new-quality productivity was first included in the government work report, becoming a focal point of attention. We note that this year's Central Document No. 1 has introduced "new-quality agricultural productivity" for the first time. Mr. Tan, what signal do you think this conveys? Additionally, in the context of widespread attention on AI development, what new deployments do you anticipate for "new-quality productivity" at this year's Two Sessions?
It is expected that the upcoming National Two Sessions will have new arrangements regarding new-quality productivity. In light of the current international situation and major country relationships, resolving chokepoint technological bottlenecks and accelerating breakthroughs and application promotion in cutting-edge technologies such as AI, green energy, unmanned driving, digital economy, and humanoid robots will be key focuses of the National Two Sessions.
It can be anticipated that the arrangements for new-quality productivity will be more comprehensive, pragmatic, and targeted than last year's. The emphasis will be on developing key areas and content related to new-quality productivity, with very specific and feasible measures proposed, including policies, resource allocation, and funding measures.
【Anchor】Okay, Mr. Wang, what new expectations do you have for this field amid the rapid development of AI technology?
An important component of new intelligent productivity is emerging industries, where AI plays a significant role in the future of the information sector. Therefore, new intelligent productivity is driven by the deep application of new technologies. The rapid emergence of new industries, new formats, and new models are also key characteristics of this new intelligent productivity. Essentially, AI represents a high-level modern production force. New technologies must be embedded in industrial practices and real-world scenarios to translate R&D outcomes into productivity. In finance, healthcare, automotive, consumer, communications, manufacturing, education, and many other fields, we have found that AI is fundamentally reshaping and constructing new productivity. This underlying logic is undergoing significant changes. Personally, I hope that valuable industry-specific data can be utilized more effectively through training and inference of large models, creating broader applications for vertical industries. Therefore, open access to sector-specific data is crucial.
【Anchor】We see that the development of AI has also been highlighted in the recent fiscal budget announced in Hong Kong. With the upcoming National Two Sessions, AI is sure to remain a focus. Professor Xie, what do you think are the future development opportunities for AI technology in Hong Kong, especially in relation to national strategies?
Currently, the establishment of artificial intelligence (AI) standards is predominantly led by Europe and the United States. For example, organizations like IEEE (Institute of Electrical and Electronics Engineers) shape frameworks such as the "AI Capability Framework." If Hong Kong can leverage its unique "One Country, Two Systems" advantage to establish a certification system that bridges Chinese and Western standards, it would not only assist mainland Chinese enterprises in achieving compliance for overseas expansion but also attract international businesses to use Hong Kong as a gateway to enter the mainland market. This dual role would position Hong Kong as a pivotal hub for China's "dual circulation" strategy. This is the necessity of the matter.
Now, regarding the specific implementation path, I believe there are three key steps to take:
First, Hong Kong should prioritize securing influence in AI ethics governance. For instance, by collaborating with the International Organization for Standardization (ISO), it could transform the compliance experience from the Hong Kong Monetary Authority (HKMA)'s AI regulatory sandbox into a Cross-border AI Financial Services Ethics Guide. This would serve as a regional regulatory benchmark. This is the first step.
Second, Hong Kong should drive technical standards in specialized fields. For example, it can build on the RISC-V chip ecosystem developed by the Microelectronics Research Institute, promote open-source chip design certification standards, and utilize supercomputing centers to establish computing efficiency evaluation standards. These efforts would align with global trends in low-carbon computing.
Third, Hong Kong should establish an industry alliance for standardization. The government could take the lead in creating the Guangdong-Hong Kong-Macao Greater Bay Area AI Standards Promotion Association. This alliance would attract leading companies like Huawei, SenseTime, and emerging innovators like DeepSeek to accelerate the application of standardized technologies in the market.
【Anchor】Alright, aside from that, the most concerning issues for the outside world are the economic growth target, inflation target, and the setting of the fiscal deficit. Previously, the market generally anticipated that the central government would set a GDP growth target of around 5% and an inflation target of 2%. The fiscal deficit level is expected to reach a historic high of 4%. Mr. Tan, what are your thoughts on this? In light of these figures, what recommendations do you have for fiscal and monetary policies?
How should the economic growth target for 2025 be determined? A 5% target is essential; even if it is not directly stated, it remains a necessary goal. Regarding the 5% economic growth target, some may argue that the current issue is low price levels rather than inflation, making a 2% inflation control target seem impractical. While it is true that current price levels are low, this situation will not persist. With steady economic operation and expanding demand, especially due to the continued effect of various policy measures, price levels are expected to rebound steadily. A notable rebound is expected in the latter half of the year, and a 2% target should be set for inflation control. These targets aim not only to prevent high inflation but also to avoid low inflation, so maintaining around 2% would be a good outcome. As for the fiscal deficit rate, it will continue to be adjusted as needed to better utilize fiscal policy to stimulate the economy and support enterprises, working alongside monetary policy as a dual-engine strategy for the continuous improvement of China's economy.
【Anchor】Alright. In addition to the above widely watched issues, Mr. Tan, what other content do you think is particularly worth paying attention to at this year's National Two Sessions?
For the 2025 National Two Sessions, my primary concern is still the issue of the private economy and private enterprises. Many people focus their attention on consumption, which, on the surface, is indeed very important. The key lies in revitalizing consumption, which depends on the recovery of enterprises. Without a comprehensive recovery of enterprises, the consumption market is also unlikely to recover. Some may argue that without the recovery of consumption, how can enterprises recover? This chicken-and-egg dilemma does not apply to China's current economic context. Sufficient investment has already been made in promoting consumption, stimulating consumption, and in policies, resources, and funding; it now depends on the confidence of private enterprises and entrepreneurs. If private enterprises and entrepreneurs demonstrate confidence, enthusiasm, a strong drive for growth, and clear expectations, then consumption will not be a problem. Especially for private entrepreneurs, as long as they dare to develop and invest, they will certainly succeed. At the private enterprise symposium, entrepreneurs expressed their confidence and determination to grow, and such signals will undoubtedly be conveyed to other private enterprises and entrepreneurs.
【Anchor】Finally, let's focus on market trends. The Hong Kong and A-share markets have shown strong performance since the beginning of the year, driven by the AI boom. Last week, the Hong Kong stock market performed notably well. As the National Two Sessions approach, the market is expected to enter the 'Two Sessions market' this week. Chen Weicong, senior investment strategist at East Asia Securities, shared his views on the 'Two Sessions market' in an interview with DDN.
The major focus for the Hong Kong stock market now is the Two Sessions in early March. Over the past two months, firstly, the increase in tariffs imposed by Trump has not been as high as expected; secondly, the capital market has stabilized. Therefore, the level of fiscal stimulus discussed at the conference may not be as aggressive or large in scale as previously anticipated by the market.
This could present some short-term pullback risks. However, we should also pay attention to the support for innovative technologies during the Two Sessions, especially since everyone is currently focusing on the development of artificial intelligence. We need to see if there will be more specific policies or measures introduced to support this industry or encourage more mainland enterprises to apply AI.
Thus, for tech-related sectors, even after a short-term correction, it could present a good opportunity to absorb. Additionally, we should keep an eye on companies reporting earnings, particularly tech firms, and whether they will continue to increase investments in AI, or even provide optimistic guidance, such as potentially rapid growth in cloud services.
These factors will have room for upward adjustment in their valuations. In the short term, I expect the Hang Seng Index to fluctuate between 22,500 and 24,500, with an annual target of 24,800 points.
【Anchor】So, Mr. Tan, how do you predict the market will evolve?
Every year during the National Two Sessions, investors look forward to the 'Two Sessions market.' Currently, there are already some indicators; the trading volume of A-shares has begun to gradually increase, and there is a sense of released enthusiasm among investors. At the same time, some popular sectors are showing some loosening around the Two Sessions. With the convening of the Two Sessions, especially the release of the government work report, there will be more obvious 'Two Sessions market' trends in certain areas.
Therefore, investors can focus on key areas such as artificial intelligence and sectors closely related to the new production chain based on the actual situation of the Two Sessions. Additionally, sectors such as administration may also become important components of the 'Two Sessions market.'"
【Anchor】OK, thank you. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang, thanks for watching, and see you next time.
Anchor: Laura Cheung | Edited: Kelly Yang, Laura Cheung | Translate: Kato Ip | Proofread: Chris Liu
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