right now going to beijing li qiang annual report delivering to delivering the comment that is all of the people security and area including wisely wait for the economy slowing we didn't get that kind of tree not getting everything from any account which tooth guy is really some consummation for investors to take the land grant platform to lend more than but will also looking for japan's retrading

very very very modestly on monday in a fashion dynamic of course the wall street session of the night it was wait and see a trade is looking testimony coming up later this week got you a skilled place in the direction for the fate of course but also in japan look of cool consumer prices patoka this is the leading indicated that rising 2.5% on the shop acceleration thanks coming into that because we had peace from last look than we did actually do moments not considering calling the view from the economist to is that the boj ship balancing a blend of economic thing comes through the

point of the equity in a little bit on continuing to hold around the 150 mark to what we think a career in the side of trade because we have the kospi just coming online here again a little the fourth quarter gdp figures the ancient to to .2 on the .6 of court a little bit of weakness that equity space is one of really try to take latest lessons from japan culprit governments are forming one of the fact is that is driven in japanese equities says dog with us 50 of these of course at the ground the court last year as

well that we can still see fed day going to happen equities that looked bit starting to think that got lost 12 months of japanese equities rally where will be cheaper companies but encouraged to improve their evaluations improves the performance expense delivered the same time so most of growth companies have been lagging behind investors since the mentally best to focus on those cheaper companies. utilitiesand thanks to the company care patient discretionary also probably to think that the japanese call me maybe earnings outlook for some of these growth stocks continue to be quiet interpreting valuation is reasonable to expect that you think that the structure placed up for japanese equities to play a role in

affectionately see for the boj policy direction and how it is likely to change the cap inflation on the basis for claiming elevation moving to the race sometime in the second course so that is likely is a very important step over what you look at the market is pricing somewhere around 25 basis points of 2024 so the increasing stress and japan just likely to be raised all that as a result i didn't think this could be a huge driver for where japanese is going to be overall i think boj's policy changes in the next few months starkest importance but for the stock market is to me so that earnings and increase interest by its investors particularly house

playing out across asia markets to take a look japan rally something done well i just doing the performance for a lot of the rest of the market where the opportunity is the case for some consolidation in the same time we would advocate active selection in companies deliver long-term earnings growth talking about market taiwan and south korea all the hardware side japanese companies also very competitive in technology and attainment on health care that we think and deliver earnings the longer run these companies have underperformed to some extent lost the last 12 months so i'll probably still

just of right because all improvement that we can add more growth style japan think that will benefit nicely to the ongoing as well as ongoing growth of these companies in china and they only that the expectation to be around five percent as well saying the transcript reported has been a transcript of that around five the brenntag it will be disclosed during the work proposed to this morning that would make that because clearly conflicting priorities of wanting to do some confidence not wanting to set such a rigid

and high target that may potentially run the risk of failing to meet with us is largely what the market expecting right now the two things i think will be critical to improve the appeal of chinese markets chinese equities as a shelter the other one is ongoing improvement in corporate sentiment and especially how government implements its policies. with regard to the private sector businesses conditions will be 16 proved slowly put in place for these companies go for the housing market and expect to be rebuilt so this could are per se coming from this the congress on congress but at the same time using his program of his policies to be expected to come through as a result of these meetings is changed from 2020

2020 forged a around five percent local media what reported transcript ahead of delivery of that web remember we did his house in times of the reasoning and guided press conference has been scrapped for the last time constraints we are to session every officials military top answering to grab hold of the people just adjacent to the a of course very close by as well and was chief of asia, on the ground i just hope the people it's very cold but we do have the gdp targets yeah they

do love their pageantry as you rightfully said there heidi and yes were hearing from local media as well as waiters who have seen on the work report apparently they are going to go that growth target of around 5% that was the same target that they gave last year and of course 2023 was extremely challenging year for the chinese economy on multiple fronts this is a growth target some people asked why do we care why do we need to have a growth target about at this time of a slowing chinese economy if they gave a target save low 5% would show pessimism about the prospects for rejuvenating the economy but giving the same target kind of the way we read it is that they believe that they have the tools whether physically monetarily or you know from external fact as exports which have obviously been in deep contraction as well

as a course the inflationary deflationary scenario they believe that they can perhaps that around 5% gdp growth with the tools at hand without grab a big bank statements and that something will be watching today at 9:00 local time when they could chuck. lika. li qiang the premier gives his first work report as mere disk to read whether there is going to be a certain support measures for property at stock market and other areas of the economy that are suffered from the statement and including the audio country's be very difficult to explain to fully do you know as well the web i find it significant but not unsurprising

right and not surprising because essentially xi jinping is the playbook on the political norms for the last 30 years or so after i get about the dong's passing there were certain protocols and procedures that were put into place or how to run the government xi jinping has changed a lot of that we have not even have the third plenum which was supposed to be held in the autumn which is the third plenum is the forward planning long-term planning for the economy they never held that so we were not able to read the tea leaves from that eating for what will be sort of cemented here at the national people's congress and so now with li qiang the premier not giving a press conference which is been tradition at the end of the national people's congress which would've been next week either monday or tuesday for the press conference is the one opportunity that local press international press any press that are able to ask direct questions to a top chinese

leader the premier in this case obviously xi jinping does not give interviews but the premier traditionally weather was one's about to terms ago or obviously lee could chuck more previously they were able to talk about the issues and and it of explain the policies were not and that's been one of the big complaints about his current government is that there not been a lot of transparency on communication and of course policymaking and that is why there is still a lot of hesitancy from international investors coming in foreign direct investment at this the smallest increase in 2023 since 1993 and again that goldman report which you've been talking about all morning essentially when we had the economist from goldman talking on bloomberg television i believe yesterday essentially saying clients are all asking is now the time to get into china at goldman sachs

this particular person's response was now is not the time to invest in china from the following about 2020 interesting because it was for 2023 as well according to the buffet 2020 four over the last it was that a possibility which could be pointing back fiscal supports this tells a lot actually because there was a lot of speculation that the fiscal deficit the ratio to gdp would be much higher order or a little bit higher than the 3% last year because of the physical needs to stimulate the economy but this kind of underscores xi jinping's

emphasis on de-risking and deleveraging that they're not necessarily going to throw everything in between kitchen sink at their problems right now so we'll have to wait and see how li qiang explains this but also there's also fiscal spending left over from 2023 that is going to be carried over to 2024 so they have that little bit about her but the fact that they are are basically saying the gdp budget deficit for the general account gdp is going to stay the same tells us that they're not necessarily can have a big bank statement simple line jumping local media about of the sovereign debt issuance because this was something else to tracking hearing is the one truly that's a lot lower than it was the tribe rose getting confirmation that the gdp what will be around five special

government debt issuance kind of plan for a that i think that is how the government has been telegraphing how they're going to handle the fiscal situation of the debt to his actually they're not necessarily going to ramp the fiscal stimulus as they have in years past that was the old caught dale basically incur lots of debt especially at the local level in the provinces and then deliver you to spend your way through debt out of economic slowdown is like in 2015 at previous slow down they're not going to do that and that they they been saying that and there telegraphing that and essentially going to reconfirm that here at the nbc i resume in the work report coming up in the next hour again the provinces are severely constrained on their fiscal book that books are our their coffers are not right

property market has rightly translated to a drop off considerable drop off a land sales they cannot replenish their coffers there the central government here in beijing has given no indication that they are going to build the coffers and again covid zero no we don't talk a lot about that but covid zero absolutely hammered the the the books at the provincial level had the hay for all the testing that the pay for all the law they had to pay for everything not the central government so and it costs a lot so the physical positions at the local level is constrained in the local government does not want to exacerbate that with incurring a lot more debt in question of how the markets respond to the pre-pregnant price up right with you in beijing analysis on china's economy will be getting on makes

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>> treatment in the nation's

capital that is sent to grab hold of the people willing a wild biggest economy how much at around five percent range three blamed the economic challenges statement in the before the social challenges than before as well they'll come the house that was expected that was very short-lived and we saw the struggle for policymakers to make that growth target for 20 232020 phone i got listening to

the hype and confidence and much-needed confidence and lift things meant for investors and question is how they going to support that when it comes to fiscal support we know it is very directly correlated to the labor market and to add 12 million jobs in 2024 valley interesting to me that fiscal deficit was 3% that was the number for 2023 that was up to 3.8% how they plan to support the 5% gdp target without adequate fiscal expansion is the question for me becoming three self-isolating a lot of restraints see intensive government spending plans and target station when he put the space doing extremely challenging for beijing to meet

investment grade how i find the concrete policy stimulus to come through and given a picture of restraint could be on to follow that we do to have been something chinese equities is basically a week goldman investment strategy group view on what now is the time put your money given how to china appears people inevitably say well it has a discounted the worst news and our view is that one should not invest in china first and foremost we think the economy is going to continue to slow down for the next 10 years that's a

very important factor second when we're looking at policy uncertainty it is not clear what the overall's general direction of policy will be long-term think they are in china are intervening processes see an area remain in 2010 structural issues with about second-biggest economy are more concerned about china than europe europe is getting them three mobs but make sure quarters the same thing with you think of is given a shot from russia ukraine to be an area is sloppy, it allows for five you is aging the corelogic innovation and things of are more structural china is a more serious story because is prevention produce to be for three decades 10% and then went to five most people now estimate the potential growth for china for the can be in two to 3% is a

story lodge aging is starting a that is the story of less sex the ipo china because of geopolitical stuff just sort of less export led growth because is protections all over the world's consumer and business sentiment is in a funk because of all this is all rushes in. and finally consumption israel is a surety as savings are high because on the social safety net let's say for old age for retirement if they get tickets to get unemployed the migrant workers work some of them access to public services structural reasons why growth in china is going to be 3% that's a real shift for the global economy inflationary shock and inflationary shock for china to be growing at a much slower pace is inflationary for china and reported to sit in the visiting of the world in two ways first the ways that this is china's dumping on global remarkable and

of course the chinese currency weakening is about the currency appreciating that social deflationary in front of even china's growing glass demand for commodities everything else equal below are part of the global inflation philosophy is so overgrown slowing down china is deflationary for the global economy is the more sets of foreign policy coming out of the ccp is that we expect i'm not sure because the that of an aggressive foreign policy voting realize right now this is come the one your policy doesn't make some friends in europe around the world that story economic growth the national people's congress is right now the very insecure and of the taiwanese election has been actually run up to be much more aggressive thing realizing a situation like these on escalating times over the u.s. is not good for them information europe and taking a slightly more cautious approach to stop the about the economy

but the stock market and probably the dishes in been in by to meeting last phone is beginning of something over the phone i don't think is a change that should change the or within u.s. and china called to be like these but probably what's up in the four months the relations in the negative action is awarded about the secrecy coming out of china's government some people are suggested that this should should have much more monetary and fiscal think most she pin and mess of the policy are it in part because it is already too much debt and deficits doubling down on credit two fixed investment is going to be dangerous at the end chinese realize that this slowdown of growth is all sickly comes more fiscal stimulus increases that give a short-term boost growth is short-term and more artists on so they would be something

wasn't done this part of the 5% from easier is not be achieved in china right 4% but easier being closer to 45 something was without becomes on a tree on the that something is not as much things i get you 5% something everything nouriel roubini speaking people in beginning to be very difficult for policymakers to meet three of gdp as well help tracking the employment outlook 12 million jobs over the course of 2020 full but not really think too

much of a reaction so if i b i'll show you one look that equities can be very interesting to trade bonds as well as in change the growth target on the

>> >> very high 2020 three growth

was measured against an economy restriction into it ambitious budget deficit coming through that's around three of gdp the fiscal restraint being reflected jobs 112 million jobs over the course of haswell employment of around 5.5 stands change for the coming 12 months a little on the market action there is not a trait bringing structure for supporting she and you'll he's on the because ambitious goal we going to have a lot of fiscal

restraint should from 5% a lot of forceful measures growth from ocean to transact not the fine so i think we treat 5% because what you like about 20 ways that lack of like real terry i think you know what the market is

expecting their measures to really economy waiting for completely at the top line figures that we need to know what i handle the pump and how they're petition the chief production so? to answer friday i so so i closed the points at this moment to the that would not get custom to conference how much does not times of creating more past 50 yes, i think that's a really

very big surprise to the market is positively serious about that one theory is that china has yet to come up with a complete claim 280 so matter of time 12 they would this question at this moment so i guess like you may make sure this phrase finds a fresh policy

directions for the economy which mcgregor number of big provinces and cities put out their estimate and sold around 5% that's as good as estimate as you get is your city quiet ambitious people will be skeptical the ability to make that even if it's not another was the amounts growth rates so i don't think it's surprising but it doesn't come as you say with any detail and its very very disappointing i think premier li chung once to help

them hold a press conference that is made really terrific platform for many reasons apostasy they mock on economic posting making goals determination willingness to make sure reforms and so was a terrible message to send to have that one from the agenda, communicate, because the warmth of communication with the premiere i was in a lot of ways. china is going to be content to take the day how late in the cost general she jelaboun to a lesser extent leak that chung will use this platform to push various ids ideas li qiang has an excellent record as a official in china running very

big cities a lot of old with the private sector in the past, they all used this platform to push various ideas. he has an excellent record as an official in china running very big cities. along with the private sector. and i was hoping, may naïvely, that because he is a loyalist that xi would give him a voice but that does not appear to be the case. we just don't know what the 5% is made up of. china does not have a big problem with fiscal deficit at the central level and if there is to be stimulus in the traditional way, it is done through banks. that does not tell us much. the big issue is confidence on many levels.

we still have to look or -- out for whether there is a big bailout or an attempt to get property debts into pocket somewhere and rebuild the property sector in that way. not to the good old days but to build back confidence in the economy. i'm not saying it cannot be done but we don't see signs of it today so far. >> a lot of the structural reforms are inherently contracted. getting the indebted provinces and regions under control as well, how did they balance those priorities? >> it is going to be very difficult. we see -- we hear a lot of stories of cities in china running out of money. they cannot pay teachers, nurses, police and the like. that is not sustainable. the central government does not want to bail them out. they have a tough love policy.

they say, the debt is your fault, fix it. that is contractionary. people say exports -- i think it is a positive sign for the economy. maybe not for the european car industry and the like. china's export sector is fantastically competitive. but i don't think they can grow out of problems without exports. they are doing very well in some areas but technology won't grow the economy by itself. there has to be a burst in consumption. people have to be reassured on many levels to give us that boost. we are not seeing that yet. i'm not too pessimistic about the chinese economy because there are a lot of ways they can return to a real fund led by growth and not investment and exports. >> we are moving the key voices

that could engage with the public and often -- and offer reassurance. how does that set us up for some misinterpretation at a local government level of the main party message? >> it is interesting because of course if i remember correctly, he went to davos and gave a pretty positive speech about china's economy to the davos set. the press conference -- i don't think most chinese people watched the npc but they did watch the premieres press conference. that is a message not just to the world at large but through china down to every locality. someone officials there can book up to and take their cues from. i don't see the point of it being diminished -- that role being diminished in that

respect. so yes, it means less open and clear communication. >> it does give that sense, i think, that there is less influence as well for the other key party officials. president xi is consolidating his power but what is the side effect of that where you have someone stretched too thin with so many responsibilities? >> i have been trying to keep an open mind about this. all of the politburo members of the standing committee members are all the loyalist have identified with xi and that is most unusual in chinese politics. other leaders have had those that identify with different rivals and networks. in some respect you could say that just because you are a crony, does that mean you are a hack? not necessarily. many of these people have substantial governing records and xi trusts them and they have

the ability to speak because he does not feel threatened by them. that does not appear to be the case. we have the voice in -- we have the voice of god in china. >> what else we have been hearing about in terms of personnel is that there will not be any moves announced. is there anything to take from that? >> that is a harder one. there has been a lot of speculation that china would finally get a new foreign minister. he has been doing both foreign minister and the foreign policy representative in the politburo. at the moment that is too much for one person. from my experience it is absolutely perla's to make any personnel predictions in china because you never know what is going to happen. it is tightly held. the npc would have seemed a logical time to do this.

one has formally resigned from a different post. it is still possible we will get that in a few weeks. the head of the international liaison department. it is not very clear. >> it is interesting, there is a sense that by keeping him there to study the ship, he is still dealing with one major problem at a time. do you think the personnel perch is done? >> never say never. each time we have called an end to a cap on the anticorruption campaign, more bigwigs fall. we saw that with the defense minister last year, we saw the bank of beijing, this is the history and the anticorruption campaign still going through aspects of the financial industry. once you turn over one rock, you find something else that you have to pursue.

i don't think so. actually. in the case of the foreign ministry, he has an extraordinary set of duties which is too much for any single person. he still is the lead policymaker or convener under xi he also has a very hectic global travel schedule. he will be in australia and new zealand in a couple of weeks and will probably go to a pacific country on the way. it is too much for one person. china has many adept and articulate representatives that could do the foreign ministry's job and it is unclear to me why they are not filling it. >> you mentioned they would want to have someone in place by november. what challenges do you see if we have another trump presidency? and how quickly could the issue of taiwan come to the four if there is a change in the u.s. support of ukraine? >> we have a diplomatic reprieve

this year while everyone waits for the u.s. election. on the other hand, a lot of big things will be hectic. the taiwan president inauguration in may. china has been quiet since the january election but i don't think it will stay like that depending on what the time whinnies say and the americans do. the essence of trump is not -- is that he is totally unpredictable. the idea that china would welcome such an unpredictable president i don't think is true. he may be press siding over the -- presiding over the disintegration of u.s. politics. they have to gird their loins as we all do. >> richard, always great to talk to you. you can turn to bloomberg for more on china's npc.

get commentary and analysis as we await more details from the premier. more to come on daybreak: asia. this is bloomberg. ♪

>> you are watching daybreak: asia taking a look at the price

action we are seeing from market so far. china setting a growth target of around 5% over the course of the year and they are also planning to add 12 million jobs. we are getting details on local government that. a lot of headlines dropping ahead of the work report announcement at 9:00 a.m. beijing time. our connection reflecting overnight u.s. moves because wall street drifting slower ahead of jay powell's testimony. and some key jobs data ahead. we are also tracking the inflation picture in japan because we have price growth in tokyo surging back above the b o'jays target and february. lead indicators and the national data will be announced later this month. let's get more from our senior editor, brian. how much do you think this is based affects or do you think it is a resurgence in price pressures? >> there is a lot to unpack. a lot of it is base of fact.

a year ago the government rolled out subsidies to put a cap on the cost of utilities which took one percentage point off inflation a year ago. much of it came back this year and the subsidies are still in place and will remain so until the end of april. we may see more of a bump in inflation for may. in terms of other components, price ash food prices continue to rise albeit at a slightly slower pace. other components, lodging which is of importance to anyone that wants to visit japan right now, hotels, their cost sped up to 33 percent. we are seeing factors pushing up inflation from various corners of the economy. energy prices are actually still falling but at a smaller pace than a year ago. >> given the low base effect and the fact that maybe it is not the most stable of comparisons, will there be oj still doubled

down on its need to see wage growth? >> well, i think that is the case. the be oj definitely wants to see -- the boj wants to see those numbers. and we will see a big batch of those results on march 15 and the next big decision is the 19th. it can afford to take some time and wait for those numbers. having said that, speculation is all over the place in terms of when the big move will come in march or next month. if you look at overnight swaps, we began today with a 36% chance of a hike on the 19th after -- but after the tokyo cpi stats came out it shot up and now we are back down to 29%. a lot of factors swirling around and pushing around notions of what is going to happen. >> we know the traders have

been agitating for change. more ahead on "daybreak: asia." this is bloomberg. ♪

>> let's get straight back to our chief correspondent outside the great hall of the people in a wet and rainy and cold day in

beijing. passing through these numbers around 5% for the 2024 gdp target. 7.2 percent for military spending. maybe we will start with that one. the constant re-upping of military and defense spending has caused a lot of consternation for other major economies around the world. >> i think this number is going to be standing out to the international press. again, the gdp growth target around 5% not too surprising. it is what it was last year. 2023 was difficult for the chinese economy but they believe they can stoke domestic demand without further exacerbating the debt loads at the local level. the cpi target around 3% is pretty consistent with what they have done. that would be a pretty good achievement if they can get that

at a time of persistent and perhaps heading towards entrenched deflation at least at the factory gate and wholesale prices. cpi has been in deflationary territory. they feel they can briefly a bit on the cpi. -- reflate a bit on the cpi. 7.2%, military spending is a most in five years. there are geopolitical tensions. a lot of talk and rhetoric around taiwan. and we just came out of that pivotal election in january with the more independence minded party winning a third consecutive term. he did not win, but the party did. and of course, the modernization trend of the people's liberation army. it obviously needs the spending.

and now clearly in this work report and the budget, they will get the biggest increase in five years for military spending. i think that is the one main number that a lot of people at least internationally will be circling. as well as the budget deficit as related to the gdp. at just 3%. we thought it was going to be higher. there is carryover fiscal spending from last year but the fact they did not raise the budget deficit ratio tells us they are not going to throw everything at the fiscal side towards a recovery. >> just as you are talking, we are getting pictures from inside the great hall as we await the report announcement. the budget deficit interesting coming in at around 3%. how much of this is a picture of fiscal discipline? >> it is fiscal discipline.

one thing i have learned i guess about the president xi is he usually follows through on what he says and he has been trying to put together fiscal responsibility, fiscal discipline, high quality development. he said that terminology 120 eight times in 2023, twice the number of 2022. high quality development in my reading is ok, we can accept lower gdp growth but it has to be sustainable growth and responsible growth over the long term. >> that was our bloomberg chief north asia correspondent and we will have more ahead from you, stephen engel as we await that report and we will continue our coverage of china's npc opening in just a few minutes time. we will be joined by victor sure that is it from "daybreak: asia."

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>> you are looking at live pictures of the npc opening session in beijing inside the great hall of the people as we await for the work report. the government is targeting growth around 5% this year. uc president x -- you s