Annual Report 2023

China Merchants China Direct Investments Limited Annual Report 2023 33 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) PROSPECTS (CONTINUED) The Central Economic Working Conference held in December 2023 set the direction for China’s economic development in 2024. The focus of the year will be on promoting high-quality economic development, with an emphasis on important points and controlling the key areas. Nine key tasks were mentioned in the conference. The first was to spearhead the development of a modern industrial system through technological innovation. The second was to strive to expand domestic demand in order to stimulate potential consumption and expand productive investment, so as to form a virtuous cycle of mutually reinforcing growth between consumption and investment. The third was to deepen reforms in key areas. The fourth was to pursue a high-standard opening of the economy, primarily to speed up the cultivation of new momentum in foreign trade; to consolidate the basics of foreign investment and foreign trade; to expand the intermediate goods trade, services trade, digital trade and cross-border e-commerce exports; to ease market access in telecommunications, medical and other service industries; to seriously resolve issues such as cross-border data flow and equal participation in government procurement in accordance with international high-standard economic and trade rules; and finally to continuously build a market-oriented, law- based and internationalised first-class business environment, so as to create a brand name of “Investing in China.” The fifth was to continuously and effectively prevent and defuse risks in key areas, so as to make an overall plan to mitigate risks related to the real estate sector, local government debt and small and medium-sized financial institutions, to rigorously crack down on illegal financial activities, and to resolutely guard against systemic risks. The sixth was to make persistent efforts to focus work on agriculture, rural areas and farmers. The seventh was to promote urban-rural integration and regional coordinated development, so as to organically combine the promotion of new urbanisation and the comprehensive revitalisation of rural areas, facilitate a two-way flow of various factors, and drive the construction of a new type of urbanisation with towns as an important carrier, in a way to form a new pattern of integrated urban-rural development. The eighth was to deeply advance the construction of an ecologically- minded civilisation and to promote green and low-carbon development. And, lastly, the ninth was to secure and improve people’s livelihoods. Given that China’s economy shows both resilience and great potential, its long-term economic outlook for prosperity has not changed and the potential for investment demand remains strong. As an example, the AI industry and new-type infrastructure construction will continue to receive greater support from government policies, as well as more attention from capital markets. With the advent of the big data era, along with improvements in algorithms and enhancements in the accuracy of unsupervised learning, as well as the rapid development of generative AI, AI enters a period of rapid growth, which will profoundly change the structure of traditional industries. It is here that the Fund will continue to seek out the best opportunities for investment.