Well-known private equity interprets the government work report: the economic growth target is pragmatic and rational, reflecting a clear focus on quality

【Introduction】Well-known private equity funds interpret the government work report: The economic growth target is pragmatic and rational, reflecting a clear focus on quality

On March 5th, the opening session of the Fourth Session of the 14th National People’s Congress was held at the Great Hall of the People in Beijing. Premier Li Qiang delivered the government work report. 2026 marks the beginning of the “14th Five-Year Plan,” and the report highlights key initiatives for this year’s economic and social development, guiding the direction for the next five years.

To better understand the spirit of the report, China Fund News interviewed four private equity professionals: Zhang Zhiwei, President and Chief Economist of Baoyin Investment; Xu Siyang, Chief Investment Officer of Yinye Investment; Qi Kaimin, Executive Chairman of Dahua Xin’an; and Wang Shuo Jie, General Manager and Investment Director of Yuanwei Investment.

The interviewed private equity experts stated that the setting of the economic growth target at 4.5%–5% is pragmatic and rational, fully embodying a clear focus on quality rather than blindly pursuing speed. This aligns with the country’s long-term planning goals. The range considers employment, people’s livelihoods, and long-term development needs, while leaving ample policy space to respond to external uncertainties, reduce leverage, control risks, and adjust the structure. It guides all parties to focus more on improving quality and efficiency, cultivating new productive forces, and consolidating the foundation for high-quality development through stability.

Economic Growth Target is More Pragmatic and Quality-Focused

China Fund News: The 2026 economic growth expectation is set at 4.5%–5%. How do you interpret this?

Xu Siyang: Setting GDP growth within a 0.5% range is uncommon. Previously, specific target figures were set, requiring results to meet or exceed that number. Given the current situation, with higher uncertainties facing the economy in 2026 compared to 2025, establishing a growth range is a more pragmatic approach. Instead of pursuing a steady high-speed growth of over 5%, it’s better to focus on structural improvements. Moreover, the 4.5%–5% target does not imply that economic performance or corporate profits will be lower than in previous years.

Zhang Zhiwei: This target is pragmatic and steady, emphasizing quality over speed. The range considers employment, livelihoods, and long-term development needs, while also providing policy space to address external uncertainties, reduce leverage, manage risks, and adjust the structure. It encourages all sectors to focus more on enhancing quality and efficiency, cultivating new productive forces, and laying a solid foundation for high-quality growth through stability.

Qi Kaimin: This target is a scientific decision for the start of the “14th Five-Year Plan,” balancing steady growth and high-quality development. It is pragmatic and restrained but leaves room for progress. It considers external demand uncertainties, the pain of real estate transformation, and industrial restructuring, aligning with China’s potential growth rate. It avoids distortions caused by excessive stimulus. The phrase “striving for better results in practical work” reserves policy flexibility and provides a solid bottom line for employment, livelihoods, and corporate profit recovery throughout the year.

Wang Shuo Jie: The 2026 growth expectation of 4.5%–5% aligns with the bottom line, considering future growth potential and policy flexibility. The modest and pragmatic goal indicates a higher demand for quality in GDP growth than quantity. Continued transformation and structural adjustment remain priorities, balancing advanced manufacturing, industrial upgrading, and internal circulation. The clear direction, balancing quality and quantity, and maintaining bottom-line thinking with policy flexibility, make this a pragmatic and long-term aligned target.

Monetary Policy Continues to Maintain an Easing Tone

Fiscal Policy May Accelerate Further

China Fund News: This year, the government plans to continue implementing moderately loose monetary policy and more proactive fiscal policy, with a deficit target around 4%, and issuance of 1.3 trillion yuan in ultra-long special bonds. How do you interpret this?

Xu Siyang: The overall tone of monetary policy remains accommodative. For the first time, the report emphasizes stabilizing growth and boosting prices as primary goals, reflecting the current moderate and weak inflation environment and structural issues of strong supply but weak demand in industries. Fiscal policy remains proactive but with restrained incremental measures.

This year, fiscal efforts may accelerate, with a planned issuance of 4.4 trillion yuan in local government special bonds—unchanged from last year. Unlike last year’s focus on “collecting land reserves” and “collecting housing reserves,” the focus this year is on major projects and debt reduction, possibly indicating that the debt clearance process is nearing completion. It also suggests a policy focus on expanding domestic demand, key projects, and ensuring livelihoods.

Zhang Zhiwei: Given the complex international situation, the deficit ratio and ultra-long special bonds are the policy bottom line, demonstrating firm commitment to stabilizing growth, managing risks, and addressing weaknesses. The policy retains flexibility; if economic pressures increase, adjustments will be made in a timely manner. Fiscal and monetary policies will work together to stabilize expectations, boost confidence, and support steady economic growth.

Qi Kaimin: The core of this policy mix is “fiscal efforts leading, monetary support ensuring stability,” with a slightly stronger stance than market expectations and significantly improved precision. The 4% deficit ratio and the first-ever 30 trillion yuan in general public budget expenditure reflect a more proactive stance on stabilizing growth. The 1.3 trillion yuan in ultra-long special bonds are clearly allocated, matching long-term funds with long-term projects, easing short-term fiscal pressures while directly supporting the real economy and avoiding capital idle. This arrangement balances growth and risk prevention. The moderately loose monetary tone suggests liquidity will remain reasonably ample throughout the year, with room for tools like reserve requirement ratio cuts and interest rate reductions, aiming to lower financing costs for entities and gently raise prices.

Targeted Policies to Expand Domestic Demand

“Combination Approach” to Boost Consumption

China Fund News: Regarding boosting consumption and expanding domestic demand, the report mentions allocating 250 billion yuan in ultra-long special bonds to support old-for-new consumer goods, and establishing 100 billion yuan in fiscal-financial coordination funds to promote domestic demand. How do you view these measures?

Xu Siyang: The report emphasizes maintaining domestic demand as the main driver, implementing targeted actions to boost consumption, and stimulating residents’ intrinsic consumption motivation. The 250 billion yuan in ultra-long special bonds supports old-for-new consumer goods, slightly less than last year’s 300 billion yuan, but ensures policy continuity and scale stability. The focus this year is on more precise and optimized subsidies. The 100 billion yuan in fiscal-financial coordination funds will leverage market mechanisms like loan interest subsidies, financing guarantees, and risk compensation to mobilize social capital. Additionally, policies supporting income growth for urban and rural residents address core constraints on consumption growth, providing long-term support for consumption recovery.

Qi Kaimin: These policies break away from short-term stimulus, creating a comprehensive “direct subsidies + leverage + long-term empowerment” system, significantly enhancing policy effectiveness. The 250 billion yuan in ultra-long bonds directly supports old-for-new consumer goods, focusing on major categories like automobiles, home appliances, and consumer electronics, with large scale and targeted impact, likely to directly boost end-user demand.

The 100 billion yuan in fiscal-financial coordination funds, through market-based approaches like interest subsidies, guarantees, and risk sharing, can mobilize several times that amount in social capital. Meanwhile, income-increase policies for urban and rural residents address core constraints from the income side, supporting sustained consumption growth.

Wang Shuo Jie: The 250 billion yuan in ultra-long bonds for old-for-new consumer goods emphasizes “new,” aiming to effectively guide the release and enhancement of new demand aligned with current trends, focusing on developing new consumption scenarios and habits. The 100 billion yuan in fiscal-financial coordination funds is a new policy highlight; its implementation will precisely combine new scenarios and support with traditional old-for-new practices. 2026 is expected to be a year of accelerated internal demand release and internal circulation.

Supporting the Development of Emerging Pillar Industries and Future Industries

China Fund News: The report mentions building integrated circuits, aerospace, biomedicine, and low-altitude economy as emerging pillar industries, and cultivating future energy, quantum technology, embodied intelligence, brain-computer interfaces, and 6G. How do these areas present investment opportunities?

Wang Shuo Jie: The report emphasizes the importance of technological innovation and new industries, with a stronger focus on developing new kinetic energy and industries than in previous years. AI-related semiconductors, hardware, aerospace, embodied intelligence, and quantum computing, combined with China’s advantages, will become more attractive in policy, capital, technology, and talent by 2026, opening larger long-term development prospects.

Xu Siyang: The four sectors—integrated circuits, aerospace, biomedicine, and low-altitude economy—are already key focus areas during this bull market cycle. AI-driven chips and semiconductors will enter rapid growth, covering the entire industry chain from computing power to wafer manufacturing and equipment, with high certainty of growth. Aerospace and biomedicine, newly listed as emerging pillar industries, are experiencing rapid technological iteration, accelerated commercialization, and broad prospects. Future industries like energy, quantum tech, and embodied intelligence are still in early development stages, requiring faster breakthroughs and earlier commercialization, fitting long-term “patient capital” investment strategies.

Qi Kaimin: The report clearly outlines a three-tiered technological development layout: emerging pillar industries, future industries, and “AI+.” The core is leading development through technological innovation, which will be the main theme of the 2026 capital market. Based on industry implementation pace and policy support, three key investment opportunities are identified: 1) expanding “AI+,” focusing on infrastructure and commercialization; 2) high-growth emerging pillar industries like low-altitude economy, integrated circuits, and biomedicine; 3) future industries with catalytic potential, such as embodied intelligence, 6G, and new energy (hydrogen, new storage).