Economic Observation Network reporter Li Xiaodan intern reporter Mao Siying Boosting market confidence relies more on the endogenous driving force of the economy. While the macro policy is overweight, it also leaves room for subsequent adjustments.
This survey shows that in economic recovery, the roles of the “troika” are consumption (46%), investment (46%), and foreign trade (8%); 77% of economists believe that in 2023 The fluctuation range of the RMB exchange rate is 7.1-7.5; 34% said that the Fed will slow down the pace of raising interest rates, but there are still interest rate hikes. At the same time, 80% of economists believe that debt risk will become an important consideration for the introduction of economic recovery policies in the second half of the year, and local debt and real estate debt risks are still the focus of prevention; increasing macro policy adjustment does not mean that all policies will be increased at the same time. The likelihood of a large economic stimulus is low.
As to whether China has entered a “liquidity trap” that has recently sparked discussions, this survey shows that it has not yet faced a liquidity trap, but signs of insufficient demand and unstable expectations still need to be vigilant. The docking efficiency between real economy money demand.
The Economist survey is initiated by the Economic Observer and is conducted quarterly. Respondents included authoritative economists from investment banks, research institutions and government departments. A total of 77 valid questionnaires were recovered in this survey.
Finding the endogenous driving force of the economy
The economy continues to recover, but the endogenous driving force still needs to be strengthened, which also leads to continuous improvement of macro data, but market expectations fluctuate.
The current questionnaire survey shows that: 40% of economists believe that the GDP growth rate in the second quarter of 2023 will be 6.5% to 7%, 12% think that it will be in the range of 7.1% to 7.4%, and another 12% think that it will be in the range of 5.1% to 5.4% %, 10% think it is in the range of 7.5% to 8%. At the same time, 56% of economists believe that the annual GDP growth rate in 2023 will be 5.1% to 5.5%.
Ding Shuang, Chief Economist for Greater China and North Asia at Standard Chartered Bank, believes that the year-on-year GDP growth in the second quarter and the whole year of 2023 will be 5.8% and 5.4% respectively.
“Currently, China’s economy is facing three major headwind tests: weak consumer confidence, sluggish property market and slowing export growth. It is expected that further policy support will be introduced to avoid further decline in economic growth, but the possibility of large-scale economic stimulus will be introduced The reason is that the GDP growth target of around 5% can be achieved relatively easily.” Ding Shuang said that consumer confidence will continue to improve, and the real estate market’s drag on the overall economy is expected to weaken, so the year-on-year growth of GDP in the third and fourth quarters will be maintained 5.5% and 5.9% of forecasts, respectively.
Zhu Baoliang, Director and Chief Economist of the Economic Forecasting Department of the State Information Center, predicted that the GDP growth rate in the second quarter will be in the range of 6.5% to 7.0%, and the annual GDP growth rate will be 5.1% to 5.5%. He believes that the current economy is still insufficient in endogenous power.
Zhu Baoliang also reminded that although the current data does not show clear deflation, it is indeed accompanied by hidden worries of deflation: from the demand side, consumption rebounds slowly, the real estate industry is under great pressure, and export growth has slowed down; from the supply side, the traditional Overcapacity still exists in China’s production capacity, such as steel, building materials, and automobiles, and overcapacity in new strategic industries. For some technologies and products that are stuck in the neck, there is also a phenomenon of chaos and death when they are released. The vitality of private enterprises is still there. Insufficient.
Recently, there have been discussions on whether the current deflation or liquidity trap is the current one. Some people believe that deflation is caused by insufficient money supply leading to a reduction in demand, which in turn lowers prices. However, the growth rate of money in the first quarter of this year reached 12.7%. At a rapid rate, a large amount of money was deposited in the form of precautionary savings, and the velocity of money circulation declined, which did not translate into consumption and investment flowing into the real economic cycle. This is not deflation, but a liquidity trap.
In this survey, on whether China is currently facing a “liquidity trap”, Guan Tao, the global chief economist of Bank of China Securities, said that the “liquidity trap” means that the nominal interest rate has dropped to zero. Even with negative interest rates, aggregate demand is severely insufficient and is no longer sensitive to interest rate cuts; at present, China’s nominal interest rates are still positive, which does not strictly meet this condition, and demand is still slowly picking up.
Guan Tao further pointed out that while the money supply has increased rapidly, inflation has declined, the velocity of money circulation has declined, and the macro leverage ratio is also an objective fact; in addition, boosting demand cannot rely solely on monetary stimulus. If excess liquidity cannot flow into the real economy, it may aggravate the financial crisis. Idle risks and breed more zombie companies.
Lian Ping, Chief Economist and Director of Zhixin Investment Research Institute also believes that China is still some distance away from the liquidity trap, but signs of insufficient demand and unstable expectations still need to be vigilant.
“Currently, China’s interest rate still has a lot of room for reduction, and the interest rate has not been substantially lowered, and the pace of currency issuance is stable, which can continue to provide a relatively loose and stable financial environment for economic recovery and development, and play a good policy effect.” Lian Ping said , China’s monetary policy toolbox is relatively sufficient, and there is room for monetary easing again. However, the monetary policy adheres to the general tone of seeking progress while maintaining stability. It is necessary to avoid large ups and downs, not to engage in flood irrigation, and to take into account short-term and long-term economic growth and prices. Stable, taking into account internal and external balance, the overall pace is relatively stable; it is estimated that in the first half of the year, the credit will increase by 15.6 trillion yuan, an increase of about 1.9 trillion yuan year-on-year; the increase in social financing is expected to be 22 trillion yuan, an increase of about 1 trillion yuan year-on-year , the growth rate of deposits also declined.
Gao Fan, a professor at the School of Economics at Fudan University, said that the current interest rate changes still have a significant impact on the Chinese economy, and the urgent task is to unblock the currency transmission mechanism and improve the efficiency of the docking between the money supply and the real economy’s money demand.
More policy, but not massive stimulus
“In the face of pressure and volatility, although there are views in the market calling for more policy stimulus, the new government has shown patience.” Ding Shuang said that the recent executive meeting of the State Council showed that measures to stabilize the economy are being gradually deployed, but the introduction The timing of large-scale stimulus policies is not yet ripe, mainly because: first, recent economic data show that the recovery has not stopped; second, the market consensus can break through the economic growth target of around 5% this year; third, reliance on stimulus policies may be Disrupting the pace of pursuing high-quality development; fourth, the effectiveness of macro stimulus is fading; fifth, it is necessary to save policy space to deal with future challenges.
In the first half of this year, the implementation of real estate policies accelerated due to the city. Lian Ping pointed out that the adjustment of real estate policies should be adjusted at multiple levels according to the actual situation: first, it is recommended to guide commercial banks to further provide stable housing credit support for residents. It is recommended to reduce the down payment ratio of housing loans in some cities, including key second-tier cities and some first-tier cities. It is recommended to reduce the mortgage rate by 5 percentage points, keep the benchmark interest rate of housing loans at a low level, and give preferential loans to home buyers with rigid needs and improved needs in stages; Reasonable financing support for high-quality real estate enterprises, commercial banks speed up the approval and issuance of development loans, steadily and orderly increase the scale of “guaranteed housing” special loans, M&A loans and refinancing, increase the scale of construction loans for medium and long-term real estate projects, and increase Efforts should be made to create a relaxed non-bank financial environment for real estate enterprises, and innovatively make good use of the “second and third arrows of the housing finance support policy”. Difficulty funds, or the introduction of asset management companies AMC, etc., to ease the short-term cash flow and debt pressure of these real estate companies, reduce their liquidity risk and debt default risk; third, it is recommended to establish a national real estate fund to deal with the medium and long-term stock For asset disposal, the scale of the national real estate fund established at the initial stage is 250 billion to 300 billion yuan, which fully covers the scale of non-performing loans of the current four major real estate companies.
This survey shows that in economic recovery, the roles of the “troika” are consumption (46%), investment (46%) and foreign trade (8%).
Economists have given more consistent suggestions on the starting point for stabilizing the current economic recovery momentum.
Liu Yuanchun, president of Shanghai University of Finance and Economics, pointed out that to stabilize the economic momentum, we must first promote consumption, stabilize investment, and stabilize employment, and then implement a proactive fiscal policy and loose monetary policy.
Su Jian, director of the National Economic Research Center of Peking University, said that in addition to increasing residents’ income and stabilizing employment expectations, the current focus is on stabilizing the confidence of market players. The crux of the problem now is that companies are afraid to invest and residents are afraid to consume.
Pan Xiangdong, Chief Economist of the Qi Rhenium Research Institute, said that stabilizing the economy must address the core issues, and the focus should be on responding to insufficient effective demand. There are three levels of effort: alleviating the pressure of shrinking the balance sheet, boosting risk asset price expectations, and repairing current production and production. Employment pressure.
Entering the second quarter, the youth unemployment rate has attracted much attention. Will the youth employment situation affect the employment-guaranteed industry? The current survey shows that economists judge that the impact on overall employment is limited.
Li Xunlei, Chief Economist of Zhongtai Securities, said that the youth unemployment rate has reached a new high, but it must be viewed rationally. It has an effective impact on overall employment at present; it is important to stabilize economic expectations, drive employment with economic growth, and pay attention to promoting the development of the private economy , We must vigorously develop the service industry.
Cheng Shi, Chief Economist of ICBC International, said that the rise in youth unemployment is structural unemployment and will not affect overall employment. In view of this employment situation, policies should be adopted to support the service industry and private consumption industries.
Jiang Fei, chief macro analyst at Great Wall Securities, believes that the youth unemployment rate should be analyzed from the specific situation. Currently, the unemployment rate of the 16-24-year-old population is relatively high, while the unemployment rate of the 25-59-year-old population has decreased, and the overall employment has remained stable.
“Insist on promoting high-quality employment in high-quality development, and develop more high-quality jobs suitable for young people around the cultivation and growth of advanced manufacturing, modern agriculture and modern service industries.” Jiang Fei suggested that a series of policies to encourage entrepreneurship should be introduced. The social security system has been improved, college students and other youth groups are encouraged to participate in the field of entrepreneurship, enterprises should increase support for youth job skills training and services, and attract more senior talents to enter emerging industries.
In the first half of 2023, exchange rate fluctuations have also become a factor that cannot be ignored affecting economic expectations. This survey shows that 77% of economists believe that the fluctuation range of the RMB exchange rate in 2023 is 7.1-7.5, and 5% think it is 7.6-8; at the same time, 55% of economists believe that the Fed will not raise interest rates in the second half of the year , 34% said that the pace of Fed rate hikes will slow down, but there are still interest rate hikes.
The economic barometer function of the exchange rate will be particularly prominent in 2023. In recent years, the exchange rate trend of the RMB against the US dollar has been highly negatively correlated with the trend of the US dollar index. During the first depreciation of the RMB against the US dollar in February this year, the US dollar index did rebound sharply, and the length of time between the two was basically the same; however, in May this year During the second depreciation of the RMB against the US dollar in June, although the US dollar index also rebounded, the first rebound was significantly weaker than that in February this year, and the second rebound did not last long.
Zhang Ming, deputy director of the Institute of Finance and Economics of the Chinese Academy of Social Sciences, said that the main reason for the depreciation in February was the significant strengthening of the U.S. dollar index, which was an external factor. The main reason for the devaluation in May and June was internal factors, which led to the effective exchange rate of RMB Decreased significantly. At present, the market predicts that the Federal Reserve may raise interest rates at least twice at the interest rate meeting in July and September this year, each time by 25 basis points. From the perspective of internal factors, China’s economic growth in the second half of this year still faces certain uncertainties.
“The relative strength of China’s economy in the second half of 2023 will directly affect the exchange rate trend of the RMB against the U.S. dollar.” Zhang Ming said that under an optimistic scenario, the exchange rate of the RMB against the U.S. dollar is expected to stop falling and rebound in the second half of this year, returning to the 6 range. Or around 6.8; in a pessimistic scenario, the exchange rate of RMB against the US dollar may continue to depreciate in the second half of this year, or around 7.2 by the end of the year.
The current survey shows that the biggest problems facing the United States are inflation (69%), banking risks (20%), debt crisis (9%), and employment (2%).
Pay attention to employment pressure and debt risk
The current survey shows that the main problems facing the Chinese economy are: employment pressure (29%), debt risk (26%), sharp decline in housing prices (22%), external influences such as finance and foreign trade (19%), and excessive stock market growth. Pullback (4%).
“China’s policies can be divided into three main lines, one is how to expand domestic demand, the second is how to solve the confidence problem of micro-entity enterprises, the third is Sino-US relations, and how we can coordinate the development of security after changes in the world economy. Last year, the central government The three main lines of the Economic Work Conference are interrelated and mutually influencing. We must persist in taking into account the short-term and the medium-to-long term, combine supply-side reforms with expanding domestic demand, and adhere to a proactive fiscal policy and a prudent and loose monetary policy.” Zhu Baoliang said .
UBS Securities China Chief Economist Wang Tao believes that after the recent central bank rate cuts, policy support will continue to be moderately increased to support economic growth: further relax real estate policies, such as relaxing restrictions on house purchases in second-tier cities, strengthening fiscal and quasi-fiscal expansion, and boosting economic growth. To revitalize infrastructure investment, such as accelerating the issuance of local government special bonds, raising and using a new batch of policy bank special infrastructure investment funds, but the possibility of the central government directly issuing large-scale consumption or income subsidies to the residential sector is very small; Interest rate cuts, increased credit support to match the expansion of quasi-fiscal policies, and the restructuring or replacement of some local financing platform debts with lower-cost debts.
Qu Hongbin, vice chairman of the China Chief Economist Forum, said that the focus of the macro policy to stabilize the economy should be to expand the fiscal deficit rate to support effective investment and consumption, while cutting interest rates, and targeted credit easing to support manufacturing and carbon reduction investment.
Zhu Baoliang said that a number of reform measures to boost confidence should be introduced, and the optimal allocation of labor, land, capital, technology, data and other elements should be promoted to create conditions for improving total factor productivity and promoting high-quality development; deepening the reform of the household registration system and unblocking labor deepen the reform of the rural land system, promote the two-way flow of urban and rural factors, and promote the development of urban circles; deepen the reform of the fiscal and financial system, dredge the transmission mechanism of finance and the real economy, establish housing financial institutions, and participate in the merger and reorganization of the real estate industry. Indemnificatory housing construction; issue long-term construction bonds to replace hidden local debts.
The current survey shows that: 80% of economists believe that debt risk will become an important consideration for the introduction of economic recovery policies in the second half of the year.
Li Xunlei’s suggestions on resolving local debt risks are as follows: first, optimize the debt structure, such as using various methods to extend non-standard assets and replace short-term debts with medium- and long-term debts; second, revitalize local stock assets and sell some governments reasonably Assets repay debts and attract social capital to relieve debt pressure; third, explore the establishment of a system to prevent payment risks, such as the establishment of local financial stability funds, to provide short-term financial support for urban investment companies facing liquidity crises.
Yang Zhiyong, editor-in-chief of China Social Sciences Press, said that the current local debt risks are generally controllable, and hidden debts should be identified to find out the bottom line, while vigorously developing the economy and solving problems in dynamic development.
In the financial field in 2023, what risks should China focus on preventing? The current survey shows that economists generally believe that local debt and real estate debt risks are still the focus of prevention.
Zeng Gang, deputy director of the National Finance and Development Laboratory and director of the Shanghai Finance and Development Laboratory, said that real estate and urban investment need to be focused.
Cheng Shi also believes that the transmission of local debt and real estate debt to the financial market is a risk that needs to be guarded against at present.
Yang Weiwei, assistant to the director of Guoyuan Securities Research Institute and head of total research, also said that one is to pay attention to real estate-related direct debt products, and the other is the default risk of local debt. Ye Bingnan, an economist and chief macro analyst at CMB International, pointed out that low confidence in the business and household sectors is also a risk factor that cannot be ignored.
For the reform of state-owned enterprises in 2023, Lian Ping believes that there are three aspects worth looking forward to: first, eliminate hidden barriers in the field of government procurement and bidding, lower the entry threshold, allow private capital to participate in the reform of state-owned assets and state-owned enterprises, and increase the participation of private enterprises in investment; Second, strengthen cooperation with private enterprises, jointly participate in infrastructure construction and operation, and enter the field of public services and public utilities; third, allow private enterprises to participate in ecological protection and restoration and carry out franchising.
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2023-07-16 02:09:00
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