Before our upgrade, we were expecting 2026 Chinese growth will be 4.3 and 2027, real GDP growth will be only 4%. We think that without the export resilience or export outperformance, around 4% is where Chinese growth might be the trend growth or the equilibrium growth. But after the Trump-Xi and the fourth plenum, we raised 2026 to 4.8. We raised 2027 real GDP growth to 4.7. So these are large upward revisions, and I was telling clients that this might be the largest upward revisions to China real GDP that I have seen since I came to Hong Kong in 2019. So it is consistent with the strategy, thinking about what the government wants to do and the environment, the rare earths backdrop and the US-China backdrop, which should allow China to continue exports in the next few years. The combination allowed us to raise our GDP forecast significantly.

Some of the encouraging signals would be the government is set to raise the consumption rate or, equivalently, reducing household savings rate in the next five years, making sure income distribution is improved. And they want to promote income growth along with economic growth. So these are all encouraging signals in rebalancing the economy and boosting consumption.

However, our takeaway is still that the top priority is to double down on the industrial system, on the technology self-reliance, and on becoming even more competitive in manufacturing and outcompete global peers gaining global market share. The reason why we think this is the case is that the fourth plenum and the 15th 5-year plan proposal tells you the strategy for Chinese policymakers is that we're going to use technology innovation and manufacturing competitiveness as the catalyst or as a driver of growth. Once that model works, it should generate more corporate profits and tax revenues and jobs. And that would trigger a virtuous cycle of more household income and more consumption. So that's the strategy how China is going to grow out of the past model of just relying on property and infrastructure.

But when you think about that cycle or that virtuous cycle of using technology and manufacturing to grow your economy, the first half of it can happen relatively quickly, right? China has a huge number of talent and a complete industrial system. It's the largest share of the global market in many industries, the upstream, the downstream, the logistics, the government support. The first half we're more confident that we're going to see the progress in the coming years in the Chinese companies' market share globally and Chinese exports in the global market.

But the second half will be more challenging to materialize. Think about if you have high-tech manufacturing and you have dark factories, that doesn't necessarily generate a lot of jobs. And without jobs, you're not going to be seeing significant increases in household income and therefore household consumption. It's unclear how fast the consumption can improve just because exports are strong and high-tech manufacturing is strong. This is where we acknowledge the government desire to boost consumption, but at the end of the day, we think investors will see more Chinese exports as the immediate outcome of this growth model.