China'S Macroeconomic Trend: There Is No Possibility Of U Inversion.

Because the absolute number of people between the age of 15 to 64 and the number of working people who are 20 to 29 years of age have dropped, the basic cycle that supports our total demand is relatively strong and expanding. There is no possibility of U reversal in China's economy. There is no possibility of U inversion in China's economy.

In the medium and long term, there is no U type. Why? Because the economic cycle we are in now is different from that in the past 30 years after our reform and opening up. Today we face the biggest change in background, that is, the change of population structure, which has a decisive influence on the medium and long term trend of the economy. That is to say, since the absolute number of people who are between 15 to 64 years of age and 20 years to 29 years of age, the loss of the basic cycle that supports our total demand is relatively strong and expanding. This problem, whether we are willing or unwilling to see it, we must admit its objective existence.

For China's macroeconomic operation, I will give some judgement from the short term and medium to long term.

First, we should say that our short-term macro-economy is still in a low equilibrium state. This low equilibrium is basically consistent with the prediction of macroeconomic situation and directly determines our basic ideas for investment in the one or two tier market. Maybe we should maintain a relatively calm and prudent attitude towards the future macroeconomic situation.

The comprehensive judgement is that China's economy is running L. The question of academia is, what is the L type and the L type? Where are we today under the L type or the L vertical lever, depending on the speed of the structural reform of the supply side. I now judge that it may still be on the L vertical lever. In the short term, we see more of a zigzag fluctuation, with little fluctuation. Some entrepreneurs say that this state of affairs is uncertain, unstable, unable to catch opportunities and many challenges. Our pressure on this round of economic growth must be fully estimated, and we will prepare for a longer period of time for enterprises to transform themselves, upgrade them, and increase revenue and reduce expenditure. Now that we have made such a judgement of type L, it is definitely not U or V. Of course, we hope that there will be LV in the foreseeable future.

Short term rebound persistence is not enough, the obstacle is obvious. The short term stabilization in the one or two quarter of this year depends on the introduction of a series of steady growth measures last year, that is, since 2015. Especially the release of the benefits brought about by the investment in infrastructure construction through the PPP mode. This time lag is very long. We have observed for a long time, the fourth quarter of last year. The release was released in the first quarter of this year, and the release was temporary. In the three or four quarter of this year, there may be a slight fall in the overall situation, but the rate of decline will not be large.

However, such a situation will not appear in China for the time being. The importance of this round of supply side structural reform is here because China's development potential and development opportunities are the most potential compared with other countries. We have sufficient conditions to stimulate aggregate demand and have sufficient conditions to improve all aspects of the supply side, in terms of labor, capital, technology, institution and land. In terms of production factors, we have enough capacity and enough space to improve. This is also the field where entrepreneurs here today can seize investment opportunities. Therefore, the supply side reform is not confined to the textbooks we see, nor is it confined to documents. It will actually affect our acquisition of future investment opportunities.

In the short term, the recovery of inertia and the growth of zigzag will continue. Simply combing, the improvement of investment this year will come mainly from two yuan, one is real estate development investment from real estate sales, second from infrastructure construction, and the high growth of infrastructure investment depends on the PPP mode we have been promoting since last year. Although there are various risks in the PPP mode, after all, a large number of projects yield relatively stable, and the PPP mode is becoming more and more mature. In the future, it will become a very important field for large financial institutions to allocate funds.

Let's talk about foreign exchange reserves. Everyone's worry about the exchange rate is actually more tangled. We have seen signs of stabilization from the data of foreign exchange reserves. This is because the central bank has managed the exchange rate through the two dimensions of the middle price and the basket price since last year. The academia is now debating whether to maintain exchange rate or reserve foreign exchange reserves. In terms of policy choice, we actually see that we want to maintain the exchange rate and maintain foreign exchange reserves. The protection of foreign exchange reserves is managed through the middle price. As for the RMB exchange rate, we are most concerned about the exchange rate of RMB against the US dollar. The overall judgement is that the RMB has a certain degree of depreciation pressure. But I would also like to remind you that there is no need to panic too much. The renminbi will not depreciate considerably in a short time, but for the RMB face. depreciation Pressure, we'd better get ready. In fact, we are already making some preparations. From the national level, the management of capital outflow has also started. We should have a personal understanding, that is, it is becoming more and more difficult for everyone to exchange foreign currencies. Many foreign investment wants to enter China, and the procedures are becoming more and more complicated and transaction costs are higher and higher. This is what I want to share with you about the short and medium term. economical operation Basic judgement. For the second half of this year, we must realize that the pressure of economic downturn still exists in the one or two tier market investment.

The change of macro policy will have a direct impact on the one or two tier market, especially for the two level market liquidity. In this year's five major tasks of supply side structural reform, the two major tasks of productivity and deleveraging are highlighted. If productivity can be speeded up, we must pay attention to the fact that supply contraction or contraction will exceed investment opportunities reflected in the one or two level market, so the production capacity itself will still be reflected in the two market this year.

In addition, we can acutely observe an important phenomenon. De-leveraging The second half of this year is still stronger than the first half of this year. Deleveraging in different fields, for example, the high leverage ratio of non-financial enterprises, may allow some enterprises to go bankrupt in an orderly way. In the financial field, no matter from the basic situation of products, business models, and mixed operation, they will be faced with deleveraging, some products may not be able to come out, and some products may be leveraged to reduce the ratio of mixed products. More stringent controls may be imposed. We have seen that this year's strengthening of regulation in the capital market is actually a change in the specific field under the great tone of deleveraging. So in the second half of this year, we have put forward more requirements for our choice in the two tier market. The margin of fiscal policy is not as loose as that in the first half of the year. I would like to remind you that we should pay attention to the change of policy choices.

The third aspect is to talk about the asset allocation that everyone cares about, especially the characteristics and ideas of the one or two level market investment. Whether it is a primary market or a two tier market, there are several specific ideas for investment: first, the future economic transformation, or those industries related to economic development. As a new driving force for economic growth, emerging industries are still in the process of forming. In the process of forming, it means a long-term opportunity for investors who are keen on the primary market and the two tier market investors. Second, we should pay special attention to the industries which are relatively weak, or even negatively related to economic growth. Third, a group of industries that maintain a steady pace with economic growth, I want to focus mainly on big consumer areas, especially biomedicine, health management, and even education.