（原标题：Wall Street Frontline｜Brendan Ahern：China continues to open up to foreign businesses and investors）
The 20th Central Committee of the Communist Party of China convened its third plenary session in Beijing from July 15 to 18， 2024， adopting a resolution on further deepening reform comprehensively to advance Chinese modernization.
To delve deeper into this topic， we invited Brendan Ahern， Chief Investment Officer at KraneShares to interpret the recent economic data and the main messages from the 20th third plenary session.
Wall Street Frontline: Hi Brendan， thank you so much for joining us today.
Brendan Ahern: My pleasure. Great to see you.
Wall Street Frontline: China's economy grew by 5 percent in the first half of this year， how do you see China's recent GDP growth figures impacting the broader investment landscape?
Brendan Ahern: Certainly， we've seen that China continues to grow following the removal of the COVID policy. The government has taken a conservative approach of not wanting to create inflation or higher levels of debt， so they're allowing the economy to go through an economic cycle. And so you're seeing the incremental improvement of China's economy without very significant Western-style stimulus. So yeah， we are very constructive on the Chinese economy， just acknowledging that the rebound is a slower incremental rebound. It's different from what we saw for many Western economies， but there's a strong argument that more conservative approach will benefit China in the long term by avoiding inflation and higher levels of debt.
Wall Street Frontline: The meeting emphasized that China will adhere to opening up and deepen financial system reform. What are your expectations for China's financial reform and opening up? How do you expect these reforms to influence China's investment opportunities?
Brendan Ahern: Well， I think we continue to see very significant signs that China's continued opening up， that's been taking place over the last two decades， is continued on that same path. And we've seen that reiterated by both President Xi at the APEC meetings back in November. His dinner for US business corporate executives was really about China being open for business for foreign corporations. At the same time， we've also seen the new head of the CSRC continue to implement financial reforms， really benefiting shareholders， both foreign and domestic. So I think around the third plenum， there was one area we were very confident that you'd see a continued mention was the continued opening up of China， both for foreign corporations and foreign investors， and the readout 100% did confirm that.
Wall Street Frontline: Which industries do you think will be significantly influenced by these reform policies?
Brendan Ahern: Well， the actual readout， I think， placed a heavy emphasis not only on financial reforms， but certainly around increasing science and technology， that there was multiple times that area of China's， the necessity of China raising its technological as well as innovation is really supported by educational efforts in those， say， STEM areas was reiterated. So I think technological self-reliance and self-sufficiency is an area that we'll continue to see policy support based on the readout within， coming out of the third plenum coming unique.
Wall Street Frontline: How do these reforms align with global economic trends， and what impact might they have on foreign investors looking at China?
Brendan Ahern: China's economy continues to benefit from a strong global economy. And we see that as the world's factory， the very strong exports， even the more recent outperformance of industrial production shows that the demand for goods from China remains quite strong. So that's a good sign for the global economy， but certainly a good sign for China's economy. At the same time， domestic consumption is improving， it's just improving at a slower pace. So we think that's an area that potentially you'll see reforms around the consumption tax to try to， you almost think about China's economy as a two-speed economy. And certainly， at this point， that export driven manufacturer remains very， very strong. So certainly reforms around the consumption tax would support domestic consumption as well as support on supporting real estate that obviously has weighed on consumer confidence. So we would expect further policy support in those two areas.
Wall Street Frontline: Can you provide your perspective on the concept of Chinese modernization as discussed in the third plenary session?
Brendan Ahern: China has been placing a very strong effort in areas such as clean technology. The electric vehicle， solar， wind， Chinese companies are arguably the global leaders in those spaces. So I think that's an area where you'll continue to see support both for utilization within China， but also opportunities for further exports. But there's also other areas such as semiconductors， as well as a whole host of artificial intelligence， big data， cloud computing. Those are areas where further strides can take place. And we're more apt to see both investment from Chinese corporations in research and development， but also government policy support to support those areas in order to allow further strides going forward in many of these kinds of technological areas. As mentioned， semiconductors are obviously very， very important， but also AI， big data， and cloud computing.
Wall Street Frontline: How do you see China’s role in the global economy evolving as it implements these new policies and reforms?
Brendan Ahern: I think China's role in the global economy is a very important one， certainly as the second largest economy in the world. China offers a very significant opportunity for global multinationals to operate. Just if you think about great U.S. companies like Apple with 16% of their revenue coming from China， or Tesla with 21%， or even ExxonMobil， 12%. So I think investors globally benefit from the opportunity within China. At the same time， there's a real opportunity for Chinese companies within China. You have companies like ANTA Sports competes with the Nike. But it's such a big opportunity set， there's an opportunity for both. So yeah， we really believe that there's an opportunity for investment in China via global multinationals.
But certainly then with many of the domestic players as well， particularly in the area where we've been focused on at KraneShares is obviously our K-Web， our China Internet ETF， the second largest China ETF outside of China. We view it as really an opportunity to benefit from this， again， this rise in domestic consumption via the e-commerce companies. And at the same time， we thought the 618 e-commerce event back in June should provide a nice catalyst for the second quarter financial results， which we'll get in August， just a few weeks away. So yeah， opportunities are abound in China today.
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