Seven Key Points Of China'S Economy In 2015

Focus one: how do we view this divergence from the current macro data and the stock market's ice and fire?

This divergence is precisely the result of the introduction of monetary policy.

After the subprime crisis, central banks of various countries encountered a similar problem, that is, commercial banks are reluctant to lend money.

The central bank poured water into the financial system, but banks did not "pfusion" more to the real economy.

If money does not go to entities, it is always necessary to find a source.

This is why the economies in developed economies first started to blow up asset prices and the real economy failed after the subprime mortgage.

Among them, the private sector (family and enterprise) balance sheet repair is extremely slow and painful.

Now, when the Central Bank cuts interest rates, the stock market is soaring, and the entity is still weak.

Faced with such a mismatch of funds, the central bank will not tighten monetary policy, but it will certainly slow down the pace of monetary easing.

Therefore, the capital market is probably too strong for the current central bank's monetary easing.

Once the central bank has made a significant discount in easing the time and magnitude, such a bad expectation may cause a shock to the capital market.

In the final analysis, this surge in stock market is inextricably linked to capital drive.

Therefore, the relaxed rhythm of the central bank may affect the staged performance of the stock market.

Focus two: what are the difficulties facing the Chinese economy?

In 2015, the biggest challenge for China's economy lies in the difficulty of finding new economic growth points.

As the recovery of the peripheral economy has been divided, exports have picked up at a moderate rate, and the restraining effect of anti-corruption on consumption is still continuing.

The bottom line or stability of China's economy in 2015 still depends on the performance of large categories of investment.

In terms of decomposition, the outlook for corporate earnings is not optimistic, so the pattern of manufacturing investment slump may still persist. The narrow financial space of the central and local governments restricts the strength and sustainability of capital investment rebound. Despite the stimulus of the new housing loan policy and monetary easing, the downward adjustment of real estate investment in 2015 is still inevitable.

Overall, this year will continue to control the decline in real estate investment, infrastructure investment hedging, but the seesaw effect has been greatly weakened.

Therefore, the growth of the central and lower steps is a definite thing, and the government is aware of this.

Strong twist melon is not sweet.

In order to further promote the pformation and avoid sharp rise in debt leverage, we need to adapt to this new normal.

Focus three: what do we think of the property market this year?

Annual real estate investment steady fall is guaranteed.

Many people say that the big cycle of real estate has arrived, but there are two points: first, the real estate market is also very sensitive to the tightness of monetary conditions, and monetary policy is the most important deciding variable.

The central bank has room for further interest rate cuts, and this year it does not exclude the possibility of full implementation of central bank mortgage supplementary loan (PSL) to commercial banks and the inclusion of mortgage loans in the first mortgage framework.

This will bring a significant boost to the future real estate sales, or sooner or later, it will stimulate the real estate investment.

Two, this year, the central bank will continue to make loans to the CDB.

According to Vice Minister of housing and construction, this year, the scale of housing reform will not be lower than that of last year. Most of the housing reform is real estate investment, and the decline of commercial real estate investment can also play a role of underpinning or hedging.

As regards the triggering factors of China's real estate crash, the two monetary conditions that have been sharply tightened in Japan and the strict control of real estate loans are not yet available in China. In the future, the real estate market in China is still likely to slow down in the adjustment.

Focus four: will the central bank further cut interest rates?

The rate cut in 2014 was earlier than the market forecast, and the cut in the benchmark lending rate was at a record high.

This cut in interest rates will cut the cost of stock debt immediately.

However, because of this asymmetric interest rate cut, the bank spreads cheese, worried that the bank will shift the cost of the stock loan interest rate narrowing to the new lending rate.

If so, it may not have much effect on reducing the financing cost of the real economy.

In addition, this cut interest rate has great effect on the real estate sales, but the regional differentiation is very obvious.

In addition, as real estate developers speed up the export, the real estate sales to real estate investment chain may stretch.

Therefore, the effect of this round of interest rate cuts on the real economy may also be dispersed.

According to the law of history, the effect will only be fully reflected after a quarter of interest reduction.

Therefore, the fourth quarter of 2014 is a sensitive window before and after the introduction of GDP data.

Then we need to consider the degree of economic slowdown and consider the government's adaptation to the new normal so that we can better judge whether the central bank will cut interest rates again.

Focus five: is it possible for the central bank to drop the quota?

In 2015, we calculated that the basic monetary gap would be around 3 trillion.

Such a large scale gap is only too much pressure to rely on these structural monetary policy tools.

Therefore, it is very likely to drop in 2015.

Empirical analysis shows that the two quarter of 2015 may be a low foreign exchange position, which will have a stronger impact on domestic funds.

The two quarter of 2015 is expected to be a comprehensive drop in the right time.

And in the second half of 2015, the Fed raised interest rates soon, so the first half of the year dropped more than the second half.

The RMB exchange rate against the US dollar continued to appreciate slightly throughout the year.

Because the new external occupation is still positive, which is a support for the RMB exchange rate.

In other words, unless the Chinese economy accelerates and the US economy recovers strongly, the impact of the Fed's rate hike on the RMB exchange rate will not be so great this year, and the kinetic energy of cross-border capital inflows will not collapse at all.

But these two situations are not likely at present.

Therefore, we may not worry too much about the RMB exchange rate.

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According to the ratio of /GDP, the ratio has been relatively stable in recent years, which means that the RMB exchange rate tends to be balanced.

Therefore, the fluctuation of the RMB exchange rate depends on the magnitude of external shocks and the extent of intervention by the central bank.

As mentioned earlier, the US economy is expected to recover steadily this year, so the Fed has limited impact on raising interest rates, and China's central bank also has huge reserves as backing, and capital account control as the starting point, so the ability to stabilize the RMB exchange rate at the critical moment is also guaranteed.

Together, the two should be able to dispel worries about the RMB exchange rate.

As for the recent depreciation of the RMB exchange rate, it is the resonance of the peripheral emerging economies.

With the gradual decline of the external market, and the central bank's continued rise in the central parity of the RMB exchange rate, the depreciation of the RMB exchange rate has come to an end.

Overall, the RMB exchange rate is still around the equilibrium level this year.

It is possible to expect more periodic derogation or phased rise. After all, finding a balanced exchange rate sometimes requires a "overshoot" on the exchange rate.

There is another key link between the stock market and the economy, that is, corporate profits.

In 2015, there was little improvement in terminal demand.

In this way, corporate profits may not be too bad, which is what we often call "molecules".

As for the "denominator", that is, risk-free interest rate, the large line is still clearer.

Even if the central bank's monetary policy is still neutral in 2015, it will not be too loose. But the demand side of the two major funds, namely real estate and urban investment, is actually weakening.

Therefore, the real interest rate center should be downward, though not as big as in 2014.

Therefore, both ends of molecules and denominator are not bad for stock market.

In 2015, this reform should be developed in a more profound direction, such as the promotion of mixed ownership reform under the pressure of local financing, the widening of direct financing channels under the demand for financing of the real economy, and the promotion of asset securitization as a means of banking buffering under the accelerated interest rate liberalization.

As a whole, the performance of the capital market in 2015 is not pessimistic.