- Preface -
"2018 for the Global EconomicsIt is very extraordinary for Ji, which is a difficult year for many people. The global economic situation is not enough, the international situation is confusing, the geopolitical situation is complicated, the global deleveraging process is in full swing, and trade negotiations are faltering... 2019 has arrived, and many of the difficulties we faced in 2018 have not been resolved. How should we adapt to the new year? How to find new growth and direction in the confusing economic environment? The financial community invited 10 economists to explore the road with you 2019 and ask the future! ”
Chief economist, Bank of Communications, Ph.D., professor, doctoral tutor
In 2019, China's macroeconomic fundamentals were good, and six factors pushed the economy to stabilize and rebound.
Moderate inflation provides space for monetary policy, and it is necessary to strengthen the transmission mechanism to alleviate the financing problems of private enterprises.
The development of small and medium-sized financial institutions is restricted, and it is necessary to promote the construction of relevant service systems.
Infrastructure investment will focus on the transformation sector and short-term links, and become a key force for stable investment to promote growth.
Off-balance sheet financing has helped financial support the real economy, and the structure of credit investment is the focus of policy adjustment.
Stabilizing housing prices and developing a long-term mechanism to promote real estate "return to rationality."
China’s macroeconomic fundamentals are good in 2019
Six factors drive the economy to stabilize and rebound
financial:You have said that we should not cope with the excessive pessimism of the economy in 2019. As the effects of macroeconomic policies appear, China's economic operation will improve in the second half of the year, and the annual growth rate may be stable and stable. In 2019, what factors are favorable to economic development at home and abroad?
Lian Ping:Although there is downward pressure on the economy in 2019, the fundamentals of our economy are good. The conditions for high-quality development are constantly improving, and six positive factors will promote the rebound of China's economy in 2019.
First, external pressure may decrease. Sino-US trade negotiations may achieve certain results, and bilateral tensions may be improved. Policy spillovers in developed economies will also weaken after the Fed’s rate hike has come to an end. Considering that the Fed’s interest rate hike will slow down in 2019, it may even stop raising interest rates, which will greatly accelerate the weakening of the US dollar index. The external currency conditions faced by capital flows and the RMB exchange rate will be relatively improved, and the RMB will be basically stable. .
Second, the policy of loosening the policy in the reverse direction will help economic growth. The role of macroeconomic policies in the economy will shift from 2018 suppression to support and support in 2019. The steady growth policy has a lag effect and may be manifested in the second half of 2019. The economic growth in 2019 may be low and stable. A stronger tax cut policy will be introduced, and the central bank will gradually reduce the corporate financing rate by gradually clearing the monetary policy transmission channel and interest rate marketization reform.
Third, the industry clearing brings high-quality development momentum. In the past few years, the five major tasks of de-capacity, de-stocking, deleveraging, cost reduction, and short-board have achieved remarkable results, and some industries have begun to resume growth. At present, there has been a positive signal of supply improvement. The investment in high-tech manufacturing, high-end equipment manufacturing, new energy and new materials manufacturing has accelerated, and output capacity has increased.
Fourth, technological innovation has brought about the rise of emerging industries. Although some key core technologies are facing the problem of card neck, China's science and technology research and development capabilities are gradually increasing, and more and more fields are gradually approaching or reaching the forefront of the world. In the past ten years, China's R&D has increased rapidly. The annual R&D expenditure has exceeded 12 trillion, and the number of research projects supported has reached 445,000. China has increased manufacturing technological transformation and equipment renewal, and strengthened the construction of artificial intelligence, industrial Internet, and Internet of Things. China's 5G communication technology has reached the forefront of the world.
Fifth, the coordinated development of the region has brought about the industrial linkage effect. The strategic deployment of regional coordinated development will promote the Beijing-Tianjin-Hebei, Guangdong-Hong Kong-Macau, Yangtze River Delta and other regions to become important power sources for high-quality development and enhance the radiation power in the eastern and southern regions. In the process of promoting regional coordinated development, we will pay more attention to ecological environment restoration and protection, and achieve high-quality development and sustainable development.
Sixth, the reforms have gone deeper and brought new opportunities for development. On the occasion of the 40th anniversary of reform and opening up, China will continue to promote comprehensive and deepening reforms. In 2019, it will promote the reform of state-owned enterprises, the reform of the fiscal and taxation system, and the deepening of financial reforms, and further promote opening up. The advancement of various reforms will bring about innovation and transformation of institutional mechanisms, structurally improve supply, and release new economic growth momentum.
Moderate inflation provides space for monetary policy
Need to strengthen the transmission mechanism to alleviate the financing problems of private enterprises
financial:The current year-on-year increase in CPI has narrowed, and PPI growth has fallen into a trough. Does it indicate that there is a certain deflationary pressure in China? You have pointed out that China's monetary policy should not be greatly relaxed, but should strengthen the policy transmission mechanism. Then, how should China promote the transmission efficiency of policies to the market to stimulate the vitality of the real economy?
Lian Ping:The year-on-year increase in CPI has continued to decline for nearly four months, falling below 2% for three consecutive months and 1.5% for February. The reason for the base and the narrowing of food price increases are the main reasons for the decline in CPI in February. The hikes factor dropped from 1.2% to 0%, which lowered the CPI year-on-year increase. Food prices rose by 0.7% year-on-year, and the growth rate fell by 1.2 percentage points from the previous month. Due to the stable non-food prices and core CPI, non-food prices remained at 1.7% for three consecutive months, and the core CPI was 1.8%-1.9% for five consecutive months. The obvious pressure of rising prices in the first half of the year has become a reality, and neither demand nor liquidity will significantly increase animal prices.
In February, the PPI was -0.1%, which was negative for 4 consecutive months, but the decline has been significantly narrowed. The PPI rose by 0.1% year-on-year, unchanged from the previous month, and the rapid downward trend for seven consecutive months was alleviated. In the circulation field, 40% of the prices of major production materials rose in February, 48% fell, and the number of product prices increased. The downward trend of PPI has slowed significantly, but it still needs to be concerned about whether there will be staged deflation in the industrial sector. Negative price increases at the buying end may affect the downside of the PPI in the future, and the downward pressure on the industrial deflation will be weakened due to a significant slowdown in the downtrend. With the effect of the steady growth policy, the PPI may rebound under the investment of infrastructure.
Inflation has generally maintained a moderate level of operation, providing a better room for adjustment of macroeconomic policies. In order to stimulate the vitality of the real economy, it is necessary to lower the real interest rate. Timely use the deposit reserve ratio, interest rate and other quantity and price means to guide financial institutions to expand credit supply and reduce the actual loan interest rate of the market. Monetary policy needs to emphasize the channel of communication and effectively alleviate the problem of financing difficult financing for the real economy, especially private and small and micro enterprises. Focus on increasing the targeted reduction of small and medium-sized banks, and the funds released are mainly used for private and small and micro enterprise loans. Support large commercial banks to replenish capital through multiple channels, enhance credit capacity, and increase medium and long-term loans and credit loans in manufacturing. Improve the capital replenishment mechanism of small and medium-sized banks and promote their efforts to support small and medium-sized enterprises to finance.
Small and medium financial institutions are restricted in their development
It is necessary to promote the construction of relevant service systems.
financial:Improving the construction of the capital market is a matter of considerable concern in China. You mentioned that the development of small and medium-sized financial institutions is a key link in the structural reform of the financial supply side. What problems do you think are facing the development of small and medium-sized financial institutions? How to strengthen the service capacity of small and medium-sized financial institutions to the real economy?
Lian Ping:The structural reform of the financial supply side is to continuously optimize the financial system structure and solve the problem of mismatch between financial supply and demand structure. Developing small and medium-sized financial institutions and improving the service capabilities of small and medium-sized financial institutions are important components and key links of reform.
The positioning of China's small and medium-sized financial institutions is mainly based on small and micro, and should be able to serve small and medium-sized enterprises on the ground, but the development of small and medium-sized financial institutions is facing more problems. First, the ability of small and medium-sized financial institutions to provide credit in the banking system is subject to capital constraints. At present, the use of capital replenishment tools among different commercial banks in China is quite different. Large banks can supplement capital through IPO, preferred stocks, additional issuance, perpetual bonds, etc., which have obvious advantages, while small and medium banks have limited capital replenishment capabilities. The use of capital replenishment tools is not rich enough, resulting in a low level of capital adequacy, especially the difficulty of replenishing core Tier 1 capital, thus restricting its ability to provide credit. Second, the level of risk management needs to be improved. Compared with large banks, the use of financial technology in risk management is still preliminary. The risk management system has a weak ability to actively adapt to changes in the external environment and regulatory policies. The risk management system is not sound enough to play in all aspects of the business. The risk prevention role needs to be improved. Third, some small and medium-sized financial institutions have a single ownership structure and the corporate governance system is not perfect. The internal mutual restraint mechanism has not yet played its due role, which has led some small and medium-sized financial institutions to invest more in local construction and state-owned enterprises, and to break away from the positioning of small and medium-sized enterprises and private enterprises.
To improve and strengthen the ability of small and medium-sized financial institutions to serve the real economy, it is necessary to promote the construction of relevant service systems. One is to clearly position. Small and medium-sized financial institutions should adhere to localized operations, adhere to the market positioning that supports the development of small and micro enterprises and private enterprises, sink the focus of services, and improve the accuracy of financial support. The second is to give appropriate policy support. It is not only necessary to give small and medium-sized financial institutions the liquidity support needed to enhance their ability to provide credit, but also to provide innovative tools for capital replenishment to slow down the capital pressure of small and medium-sized financial institutions. The third is to guide the improvement of risk management capabilities of small and medium-sized financial institutions. Establish a risk management system in line with its own development characteristics, actively use financial technology such as big data, strengthen the supervision of risk management in business operations, and effectively prevent financial risks. The fourth is to optimize the shareholding structure and improve corporate governance. Encourage the introduction of external strategic investors, enrich the shareholder industry structure, strengthen the organizational structure of the “three-level one-level” organization, and form effective mutual restraint relationships within the company to improve the corporate governance mechanism.
Infrastructure investment will focus on the transformation field and short-term links
Become a key force for steady investment and growth
financial:Since the fourth quarter of last year, infrastructure investment has rebounded markedly with the “steady growth” policies of various infrastructure projects. You have suggested that infrastructure investment in 2019 is expected to increase by 10%. In your opinion, which infrastructure areas will make breakthrough progress in 2019? How much will the infrastructure industry contribute to economic growth?
Lian Ping:The major decline in infrastructure in 2018 was mainly due to the superposition effect of the previous policies. De-leverage, effective supervision, strengthening of local debt control, comprehensive inspection of PPP projects, increasing environmental protection, and lowering the fiscal deficit rate have led to a cliff-like decline in infrastructure investment. In 2019, macroeconomic policies tend to be positive and countercyclical adjustments are carried out. Increase the strength of infrastructure and other shortcomings to ensure the funding of important infrastructure projects. Accelerate the allocation of financial funds and expenditures, strengthen financial support, and ensure the funding needs of key investment projects. It plans to arrange local government special bonds of 2.15 trillion yuan, an increase of 800 billion yuan over last year, and provide financial support for key project construction.
Infrastructure investment will focus on key areas of transformation and development and key aspects of the shortcomings. Since the second half of last year, the approval of projects such as UHV and rail transit has been reopened, and investment in related fields will accelerate this year. We will strengthen the construction of new infrastructure for the transformation and upgrading of the economic structure, increase technological transformation and equipment renewal of manufacturing industries, and focus on accelerating investment in 5G applications, artificial intelligence, industrial Internet, and Internet of Things. Increase investment in transportation, logistics, and municipal infrastructure to fill shortcomings in rural infrastructure and public service facilities.
Judging from the three major demands, the main reason for the economic downturn in 2018 is the slowdown in investment. The main reason for the slowdown in investment is the decline in infrastructure investment growth, while the manufacturing and real estate development investment is relatively stable. Therefore, the increase of infrastructure investment in 2019 has become a key force for stable investment, and it is also the focus of ensuring the smooth operation of the economy. The downward pressure on the economy in 2019 was mainly reflected in the first half of the year. With the gradual landing of macroeconomic policies, infrastructure investment is expected to gradually rebound and rebound. If the Sino-US trade negotiations achieve positive results, the external demand environment will also improve at the same time. The economic operation will improve in the second half of the year, and the economic growth rate may be stable and stable in the whole year.
Off-balance sheet financing improves financial support for the real economy
Credit investment structure is the focus of policy adjustment
financial:Last year, China’s social financing contraction trend was more obvious, which had a certain impact on the real economy. You have suggested that China's credit growth rate can be appropriately accelerated, and non-credit financing should be vigorously promoted. With the continuous implementation of the “six stable” policy, do you think that China’s credit growth rate will increase substantially? What good signals will the stock market release release?
Lian Ping:In the past year, China's social financing contraction trend is obvious. The main reason is that after financial de-leverage and off-balance sheet new regulations, some out-of-balance sheet financing that is incompatible with the new regulations needs to be gradually cleared. After a period of digestion, the trend of continued negative growth in off-balance sheet financing will gradually ease. Data from the first two months of 2019 have shown that entrusted loans and trust loans have achieved positive growth. Combined with the background of the current downward pressure on the economy, the improvement and recovery of the off-balance sheet financing function in the future will help finance to strengthen the important link of the real economy.
The central government implements the "six stable" policy, in which the fundamental of stable finance is to create a stable monetary and financial environment for the stability of the real economy. This includes a moderately reasonable liquidity environment, effective credit, a stable exchange rate, an active capital market, and controllable financial risks. As the main channel for social financing in China, credit is appropriately accelerated to help strengthen the financial support for the real economy. However, the unilateral pursuit of high credit growth is not reasonable. The large-scale flooding and flooding is obviously not in line with the current policy orientation, and is not conducive to the adjustment and optimization of the domestic economic structure. And high quality economic development. The credit investment structure may be the top priority in the next stage of monetary policy partial adjustment. Beware of the funds used by credit to bypass the “de-reality” in various channels, or to flow into real estate, push up asset prices, and create new bubbles. The best choice for the monetary authorities in the future should be to always adhere to the "directed" regulation, and it is not possible to fully relax. If this is the case, the credit growth rate will only grow moderately and rapidly, and it is unlikely that the growth rate will be greatly increased. In fact, the credit growth situation in January and February this year is basically the same. Even in January, the total growth rate is only about 1 percentage point higher than the same period of last year, so it has only improved.
Direct financing is also an important aspect of financial support for the real economy, which helps to improve the availability of financing for entities. Previous financial de-leverage, the debt market showed a downturn, coupled with the economic downturn, the overall rise in corporate credit risk led to difficulties in issuing bonds, and direct financing in social welfare was once flat or even shrinking. However, after the policy gradually adjusted toward the direction of “wide currency and credit” last year, the bond market has gradually become active, and the financing function of the bond market has gradually recovered and strengthened. However, it is necessary to pay attention to the interest rate debts with low credit risk. The improvement of corporate debt financing is not very significant, and there is still room for improvement in the future. Of course, the degree of activity of corporate bonds and the operation of the real economy also have a certain degree of dependence. The real economy is gradually improving, and the scale of corporate bond issuance will naturally gradually pick up.
It needs to be clear that the increase in credit supply does not directly affect the stock market, and the improvement of the financing environment certainly covers the improvement of financing conditions in the capital market including the stock market. So this is just a relationship, not a causal relationship. In the aspect of new share issuance and asset restructuring, the policy orientation of industrial transformation and upgrading is reflected, which is conducive to the expansion of scale by the innovative enterprises to obtain long-term capital. As monetary policy is gradually loosened, the role of the direct financing function of the stock market is gradually increasing. What needs to be guarded is that profit-seeking speculative capital is arbitrarily speculating to induce a new round of stock market bubble. The positive significance of the improvement of the financing environment for the stock market lies in the improvement of the business conditions of the company, which helps to gradually boost the fundamentals of the listed companies as a whole.
Stabilizing the trend of housing prices and developing a long-term mechanism to promote real estate "return to rationality"
financial:Recently, the National People's Congress has proposed "concentrating efforts to implement the real estate tax law." You have also predicted that the mortgage interest rate will peak in 2019, and some cities may speed up the lending. It can be seen that this year's real estate reform is expected to advance in depth, paying more attention to protecting the interests of real estate “just-needed families” and promoting social equity. Do you think that under a series of regulation and regulatory measures, when will China's real estate industry really return to rationality?
Lian Ping:The key to the “return to rationality” in the real estate industry is to stabilize expectations, which can be broken down into two levels:
First, it is necessary to stabilize the trend of housing prices. The rapid increase in urbanization rate has made China still have a certain new housing demand base. We estimate that urbanization in the next few years will still bring about an annual average new housing demand of 600-700 million square meters, equivalent to the sales area. one third. From the experience of various countries, the faster urbanization process is generally accompanied by higher housing prices. However, if house prices rise too fast, it will inevitably stimulate the market to catch up, leading to the expansion of investment speculative demand. Therefore, short-term regulation and supervision measures are still necessary in the next few years, and it is still a more effective means to control the trend of housing prices within a reasonable range and to guide the return to rationality. Even if the marginal adjustment of the camera selection is made, it is difficult to loosen the area where the population is concentrated. From the structure point of view, the current restrictions on purchases and restrictions on the demand side are mostly "the most tight in history", and there is marginal improvement in the measures for the accidental injury of the "just-needed family"; and the increased supply of land to the supply side and support for housing enterprises Expanding investment and increasing housing supply are not enough, and it is necessary to differentiate policies according to local conditions. The improvement of the supply-side policy is the key to stabilizing housing prices and market expectations in the future.
Second, it is necessary to effectively develop a long-term mechanism. One is to cultivate and improve the housing rental market. Under the premise that there is no big landslide in housing prices, only when the living environment, supporting facilities and the public rights of education, medical care, etc. attached to it are matched with the purchase of houses, “rent” may form a “purchase”. A more effective alternative, residents' choice of rented housing will be reversed. This requires speeding up the pace of building hardware and software packages for rental housing and providing innovative and viable operational solutions for quality upgrades. The second is to substantially promote the real estate tax, “burden the burden” on the circulation link, appropriately increase the asset holding cost of the retained link, and make up the shortcomings in the real estate basic tax system and income distribution mechanism. This year, the “real estate tax legislation” entered the government work report for the third time, and the key work to promote the real estate tax is expected to accelerate.