Key sectors, including retail and healthcare (including elderly care), are priorities.
The State Council also noted that it would allow financial institutions to accept a wider range of collateral for extending loans to lifestyle-related businesses.
This guidelines, released yesterday, are significant because they represent China’s first policy crafted for the consumer services sector, according to state news agency Xinhua.
Several fund houses have made shifts in their portfolios to align themselves with the central government’s focus on developing the country’s services sector.
CSOP Asset Management revealed last month that it increased its holdings in the technology sector.
“For the internet sector, we added China’s blue chip ADRs, which we believe are seriously under-valued given their growth potential. China’s internet sector is still developing rapidly, which is a structural opportunity,” CSOP said.
BlackRock noted earlier this month that compared with developed markets, service-led sectors still have ample room to expand in China. Helen Zhu, head of China equities, said that technology companies may benefit from preferential policies such as tax support.
“We may see more release in supportive policies driving increased integration of internet, cloud computing, information technology,” Zhu noted.
“We believe the government has recognised the significance in using innovation to make Chinese products more competitive and unlock future growth potential. The productivity gain could also go some way to help counter the demographic headwinds,” Zhu added.
Mirae Asset Global Investments is bullish on China’s healthcare and tourism sectors. Christopher Chen, product specialist at Mirae Asset, noted that he sees opportunities in healthcare services specific to chronic diseases such as cancer, diabetes and cardio vascular conditions.
“Over a third of [the world’s] diabetes patients are in China. Over a quarter of the world’s cancer deaths are in China. This is the scale of [healthcare investment] opportunities,” Chen said.
