Economic Observer reporter Ouyang XiaohongThe year 2023, when the economy was developing in waves and moving forward in twists and turns, is gone. Against the backdrop of intensifying internal and external challenges, China achieved 5The annual GDP (gross domestic product) growth target of 2% is not easy, although there is also 46% (nominal GDP growth) is unwilling. The year 2024 of "seeking progress while maintaining stability, promoting stability with progress, and establishing first and then breaking" has arrived. The Economic Observer sent a macroeconomic questionnaire to 25 chief economists of well-known financial institutions and enterprises at home and abroad in 2024, and nearly 70% of respondents believe that China's GDP growth rate in 2024 will be 4Between 5% and 5%.
Against the backdrop of cyclical factors, interest rate shocks, and geopolitical conflicts, China's GDP has exceeded 100 billion yuan for four consecutive years; GDP growth in the four quarters of last year was as follows. 2%。
In January 2024, the A** market was deeply adjusted, and the Shenzhen Stock Exchange Component Index and ChiNext Index recorded the largest monthly decline since 2015. However, given the resilience of China's economy, chief economists are mostly optimistic, with six out of ten respondents believing that economic growth will slow down but improve quality.
In the process of transforming the old and new economic momentum, under the pressure of real estate and local bond risks, domestic demand and external demand, what are the macro expectations of China's economy? What are the potential risks?
Perhaps key words such as "promising reform and double risk early warning" can be used to outline China's macro economy in 2024, with new challenges and new opportunities coexisting.
Macro expectations: new challenges and new opportunities
If "difficult" is the hot word in 2023 when the development curve shows an "N" trend, then what will happen in 2024?
Looking at the global economic situation, the survey shows that 60% of respondents are pessimistic about the global economy in 2024 and expect growth to slow down. This sentiment is mainly influenced by the direction of US macro policy (44%) and geopolitical changes (36%). Despite the uncertainties, the sustainability of China's economic recovery remains a key concern (16%).
Among them, 28% of the respondents are optimistic that the global economic situation is showing recovery, while 12% hold other views, such as "first decline and then stability" and "slowing growth, cautious".
Last year, it was 8077% of respondents are pessimistic, believing that growth is slowing; There are 11Fifty-four percent of respondents held other views, believing that "Europe and the United States are in a mild recession, and China is restarting** a "weak recovery". But the truth is that the global economy was unexpectedly resilient this year.
The World Economic Situation and Prospects 2024 report, released by the United Nations Department of Economic and Social Affairs, predicts that global economic growth will increase from 2.2 percent in 20237% slowed to 24%, which is lower than the pre-pandemic growth rate of 3%. The report points out that persistently high interest rates, further escalation of conflicts, international weakness, and an increase in climate disasters have brought huge challenges to global growth.
Respondents are generally optimistic about China's economy, with 60% believing that the quality of economic growth is improving, although it has slowed down. This reflects the respondents' confidence in China's economic restructuring and quality improvement.
Among the key areas of reform, the reform of the fiscal and taxation system and the reform of the local financing system received the most attention (68% each), indicating that market participants attach importance to the stability of the fiscal and financial system. In addition, financial regulatory reform (52%) and foreign investment opening (48%) are also seen as important reform directions in 2024. It was followed by the reform of the science and technology system (40%), the mixed reform of state-owned enterprises (24%), and the opening of the capital account and the provision of livelihood services such as medical care and pension accounted for 16%.
For the whole of 2024, 52% of respondents expect to show a pattern of "low before high", indicating that the economy may usher in a rebound in the second half of the year. In terms of GDP growth, the majority of respondents (68%) expect the growth rate to be 4Between 5% and 5%. Other views accounted for 28 per cent.
Looking at the direction of monetary policy, 64% of respondents expect the central bank to adopt a moderately accommodative policy to support economic growth. 32% of the respondents chose "stable to loose", and only 4% said "stable to tight". Last year, the respondents who chose "moderately loose" and "stable and loose" were all 4231%；11.54% said "overall easing".
In addition, 92% of respondents expect the RRR to be cut twice, indicating their expectation of further liquidity release, while only 8% believe that the RRR will be cut once. Last year, it was 6154% of the respondents believe that "it will be lowered 1 time"; There are 3462% said "2 downgrades".
In terms of interest rate cut expectations, 72% of respondents believe that the central bank will cut interest rates twice, and 28% believe that "one rate cut" will be held to cope with the downward pressure on the economy. And last year, there were 7692% of respondents believe that "1 rate cut", 1154% believe that "there will be no rate cuts", and there are 1154% believe that "interest rate cuts 2 times" and "interest rate cuts 1-2 times".
As for inflation, 56% of respondents expect China's consumer price index (CPI) to change by less than 1% year-on-year for the whole of 2024, indicating that inflationary pressures are relatively manageable. 40% of respondents expect a CPI** of 1%-2%, indicating that inflation remains a concern.
In terms of exchange rate, 76% of respondents expect the RMB to appreciate by less than 3% against the US dollar by the end of 2024, indicating that the general view of the RMB exchange rate will remain relatively stable with a slight trend of appreciation. Eight percent of respondents expect the renminbi to appreciate between 3 and 5 percent, while another 8 percent expect the exchange rate to depreciate by less than 3 percent, showing a different view of the exchange rate's movements. However, overall, the market's expectations for the RMB exchange rate are relatively optimistic.
How easy is it for private companies to get loans? Forty-four percent of respondents believe that 2024 will be "easier", reflecting the optimism of market participants about the improvement in the financing environment for private enterprises. Thirty-six percent of respondents said it would be "difficult" to get a loan, and 8 percent said it would be "very difficult", suggesting that despite the improved financing environment, some private companies may still face challenges in obtaining credit.
2024 is undoubtedly a year of both challenges and opportunities, and reform can be expected. In China, it is especially important to pay attention to the early warning of double risks.
Double warning: local government bonds and real estate risks
In terms of risk factors, the direction of US macro policy is considered by respondents to be the biggest factor affecting the global economic development, accounting for 44%, followed by geopolitical changes at 36%, indicating the increasing impact of geopolitical tensions and uncertainty on the global economy.
Whether China's economic recovery is sustainable ranks third with 16% underscores the key position of China's economy in the global economy and the importance of its recovery to the global economy.
Inflation and chain issues account for only 4%, and while these issues have been a hot topic in the global economy in recent years, they are considered by respondents to have a relatively small impact compared to other factors.
Last year, more than half of the respondents cited the biggest factor as "the withdrawal of U.S. accommodative stimulus", with 1538% believe that "China's economic recovery is sustainable"; There are 1154% believe that it is "inflation and the ** chain problem".
From the perspective of housing prices, 76% of respondents expect housing prices in first-tier cities to appear in 2024**, but the decline is less than 10%, reflecting the market's expectation of the sustainability of the effect of real estate control policies and the adjustment of housing prices. 12% of respondents expect house prices to exceed 10%, while 4% expect house prices to exceed 10%, indicating a divergence in expectations for the property market.
The private sector contracted in third place with 68 percent, highlighting concerns about the challenges facing the private sector and small and medium-sized enterprises. Unemployment is also considered an important risk by 56% of respondents, reflecting the importance of the employment situation to economic and social stability.
Local government debt is seen as a "tight fiscal string" and has always been an important consideration for China's economic stability. Under the consideration of the slowdown in economic growth and the pressure on fiscal revenue growth, the debt repayment pressure faced by local governments has increased sharply, which not only limits the fiscal policy space of the local government, but may even affect the stability of the financial system. In this way, strengthening local debt management and preventing and resolving debt risks are still the top priorities.
Real estate risk was also identified by respondents as one of the main challenges facing the current situation. Under the dual influence of policy regulation and market demand changes, the real estate market has been adjusted and "cleared". Although the adjustment will help alleviate the market bubble and promote the healthy development of the industry, the increased uncertainty in the market in the short term may pose a challenge to economic growth and financial stability.