China Signals Shift with Adjusted Growth Target

China and Hong Kong stocks rose as Beijing adjusted its economic growth target, highlighting a focus on rebalancing. The CSI300 and Hang Seng Index saw gains. China's new growth target aims to combat industrial overcapacity while investing in innovation, tech, and boosting household consumption.

China and Hong Kong stock markets experienced early gains on Thursday following Beijing's decision to slightly lower its economic growth target, hinting at a strategic move towards economic rebalancing. In the first hour of trading, China's blue-chip CSI300 Index rose by nearly 1% and the Shanghai Composite Index increased by 0.5%.

After suffering a six-month low in the previous session, Hong Kong's Hang Seng Index increased by 1.3%. China's revised growth target for 2026 is now set at 4.5% to 5%, down from the 5% target achieved last year. This adjustment provides leeway for tackling industrial overcapacity and restructuring the economy.

China's 15th five-year plan includes commitments to innovation, high-tech industries, scientific research, and raising household consumption as a portion of economic output. Leading the market gains, the CSI Artificial Intelligence Index and CSI Semiconductor Industry Index rose by 2.4% and 1.7%, respectively.