Annual Report 2023

China Merchants China Direct Investments Limited Annual Report 2023 5 CHAIRMAN’S STATEMENT (CONTINUED) In 2023, the Group completed the disposal of its entire holding of 67.24 million H shares of China Reinsurance (Group) Corporation (“ China Re ”) for net proceeds of US$4.46 million, so as to increase its working capital. Thus, the Group no longer holds any equity interest in China Re and has fully exited from the project. Looking ahead to 2024, there will be challenges as well as opportunities. The World Bank estimates that global growth will slow to 2.4% in 2024, the third consecutive year of deceleration. Global growth is set to slow amid the lagged effects of tight monetary policies, restrictive credit conditions, and feeble global trade and investment. The recent conflict in the Middle East, coming on top of the ongoing Russia-Ukraine conflict, has heightened geopolitical risks. Global cooperation is critical to address the pressing issues of high debt, climate change, trade fragmentation, food insecurity and conflict. And yet, despite various pressures such as weakening external demand and falling growth expectations, we continue to believe that the fundamentals of China’s economy remain unchanged, and are expected to be stable and sound in the long run. The basic characteristics of China’s economy, which remains full of potential, resilience, vitality, and adaptability, along with ample policy tools, should continue to support long-term growth and development. In 2024, the Central Government will take the initiative to maintain growth with infrastructure as a key focus, for which investment growth is expected to pick up. More and more substantial policies for stabilising growth are expected to be issued, with many notable examples in recent experience. The National People’s Congress Standing Committee approved the issuance of an additional trillion in treasury bonds to build water conservancy projects. The Central Financial Work Conference proposed quicker steps to be taken on the “three major projects,” namely the construction of affordable housing, urban village renovation and building public infrastructure for both normal and emergency use. And the Central Economic Work Conference called for treating real estate enterprises with different ownership structures equally to meet their reasonable financing needs. In addition, figures show that corporate profit growth has turned positive and exports seem to have bottomed out and improved, which is expected to drive a rebound in manufacturing investment. Further, as the impact of the coronavirus pandemic has muted significantly, the employment picture continues to improve. Per capita disposable income of residents has increased at a faster pace, which is expected to drive a continued recovery of momentum in consumption. In summary, China’s economic growth is expected to be maintained in 2024. Although we expect that various asset price risks, arising from slowing growth in the global economy (including China) in medium- to long- term, along with greater volatility in the capital markets, will pose certain challenges to our investment portfolio, the Investment Manager, as always, will face the challenges ahead and strive to identify new investment opportunities, as well as to seek to optimise our mix of investments in a way that will increase shareholders’ return. Lastly, on behalf of the Board, I would like to offer my heartfelt gratitude to the members of the Audit Committee, Nomination Committee and Investment Committee, and to the entire staff of the Investment Manager, for their many contributions and dedicated effort, and to the shareholders for their support. As always, I, with the Board, will continue to give our best effort in leading the Group as we seek to create value for shareholders in the coming year. Mr. ZHOU Xing Chairman Hong Kong, 27 March 2024