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RespondentsZhao XijunHe is the deputy dean of the School of Finance of Renmin University of Chinese, the co-dean of the China Capital Market Research Institute, and the senior researcher of the Chongyang Institute for Financial Studies of Renmin University of Chinese. This article**January 4 "Red Star Capital Bureau" WeChat***
The signal of economic recovery in 2024 will be clearer than in 2023, but if investors' mindset does not reverse, then the capital reaction will still be weaker. Therefore, the trend of the capital market in 2024 actually depends on whether various improvements and enhancements of the macroeconomy can be effectively transmitted to investors.
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In 2023, China's economy has shown resilience and vitality amid a steady recovery. Goldman Sachs' latest global macroeconomic research report pointed out that by the end of 2023, the full recovery of China's domestic demand will drive global GDP growth by about 1%. This growth momentum will continue into 2024. Morgan Stanley, JPMorgan Chase, Citigroup, UBS and many other international institutions have raised their forecasts for China's economic growth. In 2024, where will China's economy go, and how will it ride the waves against the backdrop of a weak global economy?
A few days ago, he was the co-dean of the China Capital Market Research Institute of Chinese University and a senior researcher of the Chongyang Institute for Financial Studies of Chinese UniversityZhao XijunAccepted an exclusive interview with Red Star Capital Bureau. He believes that the main problem of the national economy in 2024 is the weak confidence in consumption and investment, which affects the demand for consumption and investment. In addition, the scarring effect of the three-year pandemic needs to be gradually repaired. However, the new quality productivity, which is less affected by the scarring effect, is still deficient in terms of high-end talents, resource allocation and basic research. In 2024, the economic trend of rebounding in 2023 will continue, and how to effectively convey this benefit and restore investor confidence will determine the trend of the capital market in 2024.
Red Star Capital Bureau: How do you judge the economic situation in 2024?What are the main problems of the economy?
Zhao XijunThe economic situation in 2024 is a continuation of 2023. **The overall judgment of the Economic Work Conference for 2023 is "one high, one low and two flat", that is, the growth rate is higher, employment is stable, prices are low, and the balance of payments is basically balanced. At the end of the year, various economic indicators stabilized and improved, and the economic growth rate in 2023 will reach 52%, which is at a high level in the world;Price growth will not exceed 1%, which is in a relatively balanced state;The growth rate of fixed asset investment in November was 29%, unchanged from October. The overall economic situation continues to improve, but it is not very stable. Looking forward to 2024, China's various economic indicators will continue to improve and stabilize, but it will face greater pressure than in 2023, and the international environment will be more complex, facing a new situation in geopolitics, international finance, foreign exchange market and other fields.
The economic recovery in 2023 will be a wave-like and straightforward process, and everyone is not fully prepared for it, and there is a lack of confidence. In 2024, everyone's expectations are lower, and the mentality will not be so impetuous.
The main problem in 2024 is that expectations are weak, confidence has been frustrated, and consumer demand and investment demand have been affected to a certain extent. In addition,The scarring effect of the three-year pandemic has indeed had a certain impact on both businesses and residents, including shrinking assets, declining valuations, and rising liabilities, which need to be gradually repaired. Personally, I believe that the scarring effect mainly affects traditional economic traits and has less impact on new quality productivity. The new quality productivity is different from the traditional productivity, involving new fields and high technology content, and relying on innovation drive is the key. However, in fact, the cultivation and development of new quality productive forces is not as easy as maintaining traditional production, and we still have shortcomings in high-end talent, resource allocation, and basic research.
Red Star Capital Bureau: China's economy continues to pick up and improve, why hasn't this benefit been reflected in the first place?What is the situation of the capital market in 2024?
Zhao XijunThere is a discrepancy between the reaction of the capital markets and the general state of the economy. The capital market is affected by macroeconomic fundamentals, but macroeconomic fundamentals are an indirect impact, and it is more important whether it is passed on to investors to restore and enhance investors' confidence, because the capital market is more affected by confidence. Personally, I think,The macroeconomic changes in 2023 have not been fully communicated to investors, and confidence has not been transmitted. In addition, the pace of some IPOs and refinancings is too fast, which puts greater pressure on the market's fundsThe performance of many listed companies has not improved well, coupled with exchange rate fluctuations, and some funds have withdrawn, which has led to greater volatility in the capital market in 2023.
The signal of economic recovery in 2024 will be clearer than in 2023, but if investors' mindset does not reverse, then the capital reaction will still be weaker. Therefore, the trend of the capital market in 2024 actually depends on whether various improvements and enhancements of the macroeconomy can be effectively transmitted to investors.
Now everyone is waiting for the introduction of other policies, but from my personal point of view, the restoration of confidence depends on policies on the one hand, and more importantly, investors should reverse their mentality, have a more stable and long-term mentality, rationally look at economic changes and pressures, and make rational investment and consumption decisions.
At present, the problem is that investors and consumers do not see themselves as the main body of the economy. It will not directly create value, it exercises management functions, and what it can do is to maintain a good environment for economic operation and guide the rational allocation of resources. State-owned enterprises are mainly in the core and basic fields, and the most dynamic are still private enterprises, and only when the confidence of private enterprises is restored can the confidence of the entire economy be restored.
Red Star Capital Bureau: Previously, we talked about the "troika of investment, consumption and foreign trade", how to understand the "virtuous circle of consumption and investment promoting each other"?
Zhao XijunLooking at the balance sheet, the national economy has not yet recovered from the impact of the epidemic, and both consumption and investment need new impetus to grow, especially the new quality of productivity. Where does the new impetus come from?At present, from the first level, for example, the issuance of an additional 1 trillion yuan of government bonds is actually hoping to increase economic stimulus and leverage investment and consumption through fiscal means. After the project and resources are invested, the investment of the society is stimulated, and in the process of forming the actual workload, employment is stimulated, income is increased, and then there is an increase in consumption, which is a linkage and virtuous circle.
Because of geopolitics, shrinking foreign demand and other reasons, our foreign trade has been greatly affected, but its importance in the national economy has not decreased. Although imports and exports are negative contributors to economic growth (consumption over 70% and investment over 30%), this is only from the perspective of numerical calculations. Without foreign trade, the ** chain is incomplete. China's foreign trade has shrunk, but its share in the world has risen. The global economy is sluggish, and it is difficult to improve the situation of foreign trade shrinkage in a short period of time.
Red Star Capital Bureau: In 2023, a number of policies have been issued to open up purchase restrictions and reduce housing loans, but the national real estate development investment and commercial housing sales area are still declining. Why is the promotion effect of the policy not obvious?What are the risks in the real estate market?How to resolve it?
Zhao XijunIn the past, the real estate market was characterized by "three highs", namely high investment, high debt, and high quality. This pattern has come to an end. Housing prices are getting higher and higher, and people can't afford to buy houses;Real estate companies are becoming more and more indebted, and risks arise;In addition, both the local government and the country's economy as a whole are highly dependent on real estate, which is now being dragged down.
SoThe core problem of the real estate market is that the old model no longer meets the requirements of new growth, and is now in the stage of adjustment and exploration, and there is no accurate answer yet. "Houses are for living, not for speculation", the real estate market should return to its origins and be repositioned in the national economy.