"Major Banks" JP Morgan: A new round of trade negotiations between China and the United States may pave the way for the APEC summit at the end of the month

JP Morgan published a research report indicating that the Fourth Plenary Session of the Communist Party of China reviewed and approved the "14th Five-Year Plan," continuing the direction of high-quality development, prioritizing technological self-reliance, and reaffirming the goal of basically achieving socialist modernization by 2035.

The "14th Five-Year Plan" proposes to build a modern industrial system with advanced manufacturing as the backbone, maintaining a reasonable proportion of manufacturing, promoting the integration of new technologies with traditional industries, and achieving intelligent and digital transformation to support the upgrading and transformation of modern industries. Additionally, the "14th Five-Year Plan" points out that support for the service industry will continue, but manufacturing will still be prioritized over the service industry.

The third important direction of the "14th Five-Year Plan" is to promote domestic demand, focusing on enhancing consumption and investment, fostering a positive interaction between supply and demand, and strengthening the endogenous momentum and reliability of the domestic circulation. JP Morgan stated that, as expected, the topic of "anti-involution" was not mentioned, but it is anticipated that China will gradually make progress in employment, income distribution, social security, and housing.

The "14th Five-Year Plan" also emphasizes achieving the annual development goals, with JP Morgan raising its annual GDP growth forecast for China to 4.9%. According to reports, the usage rate of the RMB 500 billion policy bank tools in China has exceeded expectations; however, there remains uncertainty about how effectively this can be converted into project launches and economic growth. If China accelerates capital injection, it could lead to stronger growth, potentially pushing China's annual GDP growth to 5%, thereby meeting the government's growth target.

The report also mentions that, on the other hand, China and the United States have arranged a new round of trade negotiations in Malaysia, possibly paving the way for the summit to be held at the end of the month during the Asia-Pacific Economic Cooperation (APEC) meeting. JP Morgan still expects that both China and the U.S. will reach a consensus to relax export controls to avoid short-term disruptions, while U.S. tariffs on China will remain in the range of 30% to 50%