See clearly the three signals of China’s economic development

2022-05-16 0 By

The 2022 Spring Festival holiday is half over, and China’s consumption boom is on schedule.In the first four days of the holiday, the revenue of 147 tourist attractions (regions) monitored in Beijing reached 301,681 million yuan (excluding the revenue of global resorts), a two-fold increase compared with 2020.A total of 5.987 million tourists visited Shanghai, making it possible for people to enjoy the Colorful New Year in Shanghai, such as the Classic Intangible Cultural Heritage and the Cultural Trend of China.The ticket revenue of 695 A-level tourist attractions included in the statistics in Sichuan province reached 96.6972 million yuan, an increase of 14.85% compared with the same caliber data in 2021…Consumption, the primary driver of China’s economic growth, is gradually recovering from the impact of COVID-19.However, it must be noted that the contraction of demand, supply shock and weakening of expectations have caused some troubles to the economic development. Where is the strength of The Chinese economy to fight against downward pressure?From these three signals, we can clearly see the general trend of China’s economic development.After the central Economic Work Conference at the end of 2021 sets the tone, China’s policies will put stability at the forefront.Ning Jizhe, head of China’s National Bureau of Statistics, wrote that policies conducive to economic stability would be actively rolled out.In response to downward pressure on the economy, we need to take concrete actions to implement the Party’s line, principles and policies, implement prudent and effective macro policies, carefully introduce policies that have a contractionary effect, and give priority to policy action, he said.We will strengthen coordination between fiscal and monetary policies and ensure that cross-cyclical and counter-cyclical regulation is well combined.We will ensure regular epidemic prevention and control, and scientifically and precisely handle local outbreaks.The advantage of policy space is the basis for China to exert its power from policy.”Relative to other economies, China has ample room for policy, especially monetary and fiscal policy at the macro level.”Qu Hongbin, chief economist for Greater China at HSBC, said in an interview with China News Service.Qu hongbin, explains that in the past two years, the world’s other major economies to fight the outbreak hit, in monetary policy adopted a zero interest rate, “big water” means such as quantitative easing, at the same time introduced a series of huge fiscal stimulus, the budget deficit as a share of GDP increases, while China’s resistance to disease using a comprehensive formula,Both the counter-cyclical adjustment of monetary and fiscal policies and the advantages of the system.Zhang Anyuan, chief economist of Sequoia China, also pointed out that from the perspective of cross-cycle adjustment, the resilience of The Chinese economy mainly lies in the difference between the fiscal and monetary policy orientation of the Chinese and foreign countries during the epidemic.In terms of fiscal policy, China probably implemented a deficit of just over 2 per cent last year, well below the US level of around 10 per cent.In terms of monetary policy, China’s domestic inflationary pressure is very limited. What we need to balance is how to make good use of the room to cut interest rates and reserve ratio.In the US, the paradox is how to fight inflation by aggressively raising interest rates and shrinking the balance sheet without putting too much pressure on growth.”In addition, overseas economies have already absorbed the post-COVID-19 recovery dividend in advance.In China, offline service industries such as catering and tourism are expected to recover with a vengeance once the conditions for deregulation are met.”Zhang Anyuan said.Qu hongbin believes that China’s comprehensive response to the epidemic has left more ample policy space at the current time, more than two years later, despite facing new pressures and challenges.More importantly, official policy making will also be adjusted according to the new changes in the economic situation, and a number of policies conducive to economic stability will be introduced in the future.”We should not introduce policies that are not conducive to stability, and we should introduce more policies that are conducive to stability.”Just as Liu Guoqiang, deputy Governor of the People’s Bank of China, said, “Although it is the beginning of the year, the year is very short, and the plan of the year begins in spring. Therefore, we need to work quickly and act in a forward-looking way, stay ahead of the market curve and respond to the general concerns of the market in a timely manner.In terms of China’s overall economic structure, there are signs of a steady shift between old and new drivers of growth.Qu pointed out that in the real economy, China’s manufacturing industry has shown strong resilience throughout the world during the epidemic, with investment in the manufacturing industry rising instead of falling, and the continuous improvement of the industrial base and competitiveness also supported China’s foreign trade performance.He also believes that China’s next policy to stabilize growth should focus on three areas that benefit both the present and the long term: mid – and high-end manufacturing; green and low-carbon project technologies; and expanding the middle-income group to boost sustainable domestic demand.Yao Yudong, deputy general manager and chief economist of Dacheng Fund, said hard technology is the main track for China’s economy as the productivity of the manufacturing sector in the secondary industry needs to be constantly improved to create more jobs as the economy shifts to high-quality development.As a matter of fact, China has made great efforts in quality reform, efficiency reform and driving force reform, and has made new achievements in high-quality development.Data show that in 2021, the added value of the pharmaceutical manufacturing industry above designated size, aviation spacecraft and equipment manufacturing industry, electronic and communication equipment manufacturing industry, computer and office equipment manufacturing industry increased by 24.7%, 17%, 18.3% and 18%, respectively, over the previous year.The value added of information transmission, software and information technology services increased by 17.2 percent.Zhang Anyuan pointed out that after years of development, China’s industrial application level in the new energy industry chain and energy conversion has also taken the lead in the world.This year, China’s new energy vehicle market will have a new leapfrog development, a variety of technical routes of energy conversion will have new practice.”Digital resources have become an important factor of production, and the digital economy has grown into one of the most internationally competitive sectors of the Chinese economy.”Zhang Said that he noticed that nine ministries and commissions jointly issued a document to promote the sustainable development of digital economy standards, and the policy environment in related fields will become mature and stable.In addition, there may be unexpected breakthroughs in broader areas of innovation in the near future, especially in biomedical brain science and big health.All these breakthroughs mean new demand creation and new growth drivers for countries with large population bases.Since the beginning of 2022, China’s stock market has experienced short-term fluctuations due to the combined effects of internal and external factors.Zhang believes that the world’s major stock markets rose considerably last year, and since the beginning of the year, in the face of the possible arrival of the Federal Reserve’s continuous large interest rate hikes and their extensive spillover effects, the impact of the relevant market valuation is inevitable.Specifically, he pointed out that the pre-holiday A – share adjustment is A variety of reasons.First, if the Spring Festival is earlier, the stock market mainly continues the trading logic of the previous year;Second, the intensity of interest rate cuts did not exceed market expectations;Third, the negative impact of overseas market fluctuations.”Expect a considerable reversal after the holiday.”Stock market is A barometer of economic operation in China, will also return to economic fundamentals, one-two punch has been on the road of steady growth, China’s economy this year is expected to appear before the “low after high”, and this also gives China a-share market laid A solid foundation for future market movements, will also become an important bargaining chip hedge the external market volatility.From the information disclosed by a-share listed companies, compared with the market’s short-term pessimism, optimistic performance is more prominent.Wind data shows that as of January 29, A total of 2,547 listed companies disclosed 2021 performance forecasts, 1,473 of them, the rate of anticipation reached 57.83%.Among them, 205 have increased slightly, 289 have turned a loss, 28 continue to profit and 951 are expected to increase.”Our stock market will be a slow bull market, and there will be more and higher quality listed companies.”Yao more than say, although the economy will have a short-term downside, however, as the real estate a soft landing, gradually into the healthier state of development, as the entire capital market’s healthy development, residents through different information technology products, the net value of the product, configuration into the capital markets, as the public funds under the condition of the specification to continue rapid development,A virtuous circle of science and technology, industry and finance will be formed.Qu hongbin pointed out that China’s policy of stabilizing growth will solve short-term problems and bring growth potential in the medium and long term. After new growth points are formed, we can expect to achieve sustainable and high-quality development in the future.In particular, there may still be some targeted easing in China’s monetary policy amid the normalization of policy in other major economies, and a-share valuations are now more attractive globally.”The ability of the Chinese economy to overcome short-term pressures and the long-term trend of stability and improvement will support confidence in the stock market.”Qu hongbin said.From a market perspective, Mr. Zhang said, ‘We don’t care much about short-term economic fluctuations and won’t change our investment decisions because of them. We are more concerned about the long-term development potential of the market.’As the entrepreneurs behind the entrepreneurs, we agree with the investee that the policy of steady growth can stabilize the economic growth within a reasonable range and help the start-ups to overcome the economic downturn.Economic development and capital market will also form a positive interaction.Yao, said more than to give full play to win the board, the gem, the new three board and north exchange function, strengthen the government investment fund, such as national small and medium enterprise development fund policy guidance, expand the scale of direct financing of small and medium-sized enterprises will drive social capital, to specialization, new enterprises provide good financing environment, to provide more social capital flows scientific and technological progress of the channels and mark.(By Xia Bin) (Source: China Is through Train)