(Bloomberg) -- Chinese stocks struggled and government bonds advanced even as Premier Li Qiang unveiled an ambitious growth target, underscoring widespread skepticism over the strength of the nation’s recovery.   

The National People’s Congress set a GDP growth target of around 5% for 2024 — a higher bar given last year’s base, showing further stimulus will be needed. That, and a 1 trillion yuan ($139 billion) issuance plan for ultra-long special government bonds, still failed to excite investors who had looked to the key political gathering for bolder steps to revive the world’s second-largest economy. 

Chinese stocks trading in Hong Kong slumped, with developers in the red amid disappointment that policy efforts have fallen short for the ailing sector. Shares traded on the mainland ended the day higher, likely propped up by state-fund purchases. The 10-year government bond yield fell three basis points to close at a two-decade low as the yuan traded range-bound.

“It probably disappoints more based on announcements thus far, and investors still will like more forceful fiscal measures to boost the economy,” said Xin-Yao Ng, an investment director at abrdn Asia Ltd. “Government spending at least based on this doesn’t seem to provide an added boost to the economy.” 

Chinese equities have rebounded in recent weeks as a growing list of market stabilization steps helped alleviate bearish sentiment that had sent the CSI 300 Index to a five-year low. Investors have been counting on the NPC gathering to extend the nascent rebound, hoping for measures to address the nation’s property crisis and to bolster consumption. 

The CSI 300 Index of mainland shares ended the day up 0.7% after fluctuating at the open, taking this year’s advance to nearly 4%. A number of exchange traded funds tracking Chinese equity benchmarks saw a spike in turnover, suggesting state funds have been stepping in to add support.

Policies from the gathering — with further details expected over the coming days — will be scrutinized by investors, and a failure to meet expectations may revive selloff pressure in the equity market.  

With the Chinese economy facing multiple headwinds from the enduring real estate slump and a flare-up in geopolitical tensions, the bar to meaningfully turnaround investor sentiment is high. China Vanke Co., a major developer, is placed under unprecedented scrutiny by investors in fresh sign of trouble for the property sector. 

That’s as Bloomberg News reported that Advanced Micro Devices Inc. will need to get a US government license to sell its powerful AI processors to Chinese customers, the latest setback in US-China relations. The Hang Seng China Enterprise Index lost 2.6%, dragged lower by tech shares. 

Disappointment to the much-awaited NPC gathering was palpable across non-China assets. The Australian dollar — seen a China proxy thanks to the country’s close trade ties with China — fell for the second day against the greenback. 

Commodities investors, used to more extravagance from Beijing in times of economic stress, saw little to cheer. The benchmark iron ore futures contract in Singapore fell 1% in late afternoon Asia. 

Read: Commodities See Little Cheer in China’s Growth and Climate Goals

Meanwhile, the yield on China’s 10-year sovereign bonds declined even as Premier Li outlined bond issuance plans that will significantly boost supply. Investors say the country’s uncertain growth outlook will justify further monetary easing, helping absorb the spike in issuance.     

“China bond yields will likely stay range-bound, as a meaningful increase in issuance of local and central government bonds as well as a gradual pick up in inflation will be balanced by accommodative monetary policy,” said Cary Yeung, co-head of emerging markets corporate fixed income and head of Greater China debt at Pictet Asset Management.  

--With assistance from Charlotte Yang and April Ma.

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