Preview of the two sessions: the chief economist of the six major securities companies spoke out.
The second session of the 14th National People's Congress and the second meeting of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC) will open in Beijing on March 5 and March 4, 2024, respectively. As the 2024 National People's Congress and the National People's Congress are about to kick off, what hot topics do the chief economists of securities firms pay attention to? What are your expectations for monetary policy and economic and social development this year? What investment opportunities will there be in the capital market? To this end, a reporter from China Daily interviewed Ming Ming, Chief Economist of CITIC, Zhang Jun, Chief Economist of China Galaxy, Guo Lei, Chief Economist of GF, Chen Li, Chief Economist of Sichuan Cai, Zhao Wei, Chief Economist of IFC, and Dong Zhongyun, Chief Economist of AVIC, to jointly carry out forward-looking research. The following is the "golden sentence" of the interview:
Obviously:The renewal and technological transformation of production equipment and service equipment, the trade-in of traditional consumer goods such as automobiles and household appliances and durable consumer goods, the optimization of the transportation structure, the development of a new logistics model suitable for the low-altitude economy and unmanned driving, and the optimization of transportation infrastructure construction and the layout of major productive forces will be the direction of the policy. In this process, it is necessary to pay attention to the synergy between policies and give better play to the effect of policy combination.
Zhang Jun:From the perspective of economic growth, China's potential growth rate may fall back to about 5%. We calculate the potential growth rate at 5At around 5%, the desired one-year LPR is expected to be 3About 1%. At this stage, the 1-year LPR is at 345%, the interest rate still has room to fall around 70bp and 80bp. 
Guo Lei:It is expected that the full-year economic growth target will continue to be set at around 5%. It is worth noting that this year's 5% is actually faster than last year on a comparable basis due to a more normalized growth base this year. 
Chen Li:It is suggested that in the process of expanding domestic demand and promoting consumption, "promoting income" should be put in the main position. Consumption stimulus that lacks an income base can only play a certain role in the short term, and it is fundamentally necessary to promote the business cycle and efficiency improvement of enterprises, and restart the virtuous cycle of "employment-income-consumption". 
Zhao Wei:Encourage the injection of medium and long-term funds. The premise is that it is necessary to increase the dividends of listed companies, and it is also necessary to take into account the characteristics of large short-term fluctuations in equity assets, optimize the assessment mechanism of medium and long-term funds, encourage and guide the medium and long-term capital assessment cycle represented by annuities to be extended to 3 years, and adopt the rolling rate of return assessment. This is more conducive to the stability of the medium and long-term capital investment framework and trading behavior, and is also conducive to the long-term stable development of the capital market. 
Dong Zhongyun:Based on the time window before and after the two sessions, the intensive introduction of stable growth policies, the care of the capital market by the regulatory authorities, and the expectation of leveling **, we are optimistic about A-shares** in the first half of 2024. OnePay attention to finance and currencyand policy support for new industriesChina ** Daily: With the two sessions coming, what are your expectations for this year's two sessions, and what will you focus on? Obviously:In terms of fiscal policy, the intensity of fiscal expenditure and the reform of the fiscal and taxation system are expected to become the focus of the two sessions. Under the requirements of the ** Economic Work Conference "active fiscal policy should be moderately strengthened, quality and efficiency improved", the deficit rate this year may remain at 30%, and issue additional long-term special treasury bonds of a similar scale as last year. This combination, on the one hand, can keep the deficit ratio at a reasonable level; On the other hand, it is also possible to provide flexibility to stabilize economic growth through the issuance of special government bonds. Looking forward to 2024, fiscal efforts are expected to further boost domestic demand and continue to promote the economy to achieve qualitative and effective improvement and reasonable quantitative growth. In addition, the ** Economic Work Conference mentioned that "it is necessary to plan a new round of fiscal and taxation system reform", and it is expected that the reform of the fiscal and taxation system will also become an important topic of the two sessions this year. In terms of monetary and credit, there is still room for monetary easing tools to grasp the law and new characteristics of monetary and credit supply and demand. In the fourth quarter of 2023, the monetary policy implementation report not only put forward the requirements of "high-quality delivery" of credit, but also emphasized the "revitalization of inefficient stock financial resources". We believe that the two sessions will continue this adjustment and point out the direction for the development of the credit market structure in the future. Overall, the PBOC has maintained a prudent and loose monetary policy orientation, and there is still room for monetary easing tools from a medium-term perspective. In terms of foreign investment and foreign trade, cultivating new momentum for foreign trade, deepening opening-up and cooperation, and consolidating the fundamentals of foreign investment and foreign trade may become the key tasks this year. Zhang Jun:As the two sessions are about to be held, as a leading analyst, we will focus on several aspects: First, GDP growth target setting. Economic growth targets remain important and guide policymaking throughout the year. Secondly, in terms of finance, the first is the deficit rate and the setting of local ** debt, and the second is the direction of infrastructure investment, in addition to the three major projects. Thirdly, in terms of monetary policy, whether the overall monetary policy tone is stable and what changes have been made to the positioning of the financial industry. Finally, for the support direction of new industries, such as large models, data directions, new energy, and new industries. Of course, whether the expression and positioning of real estate will change again, and whether the private economy bill will be introduced, is also the focus of attention. Guo Lei:I will pay more attention to the expression of the active fiscal policy in the work report. **The economic work conference pointed out that there is a lack of effective demand in the economy and weak social expectations, and proposed that the fiscal policy should be moderately strengthened, which is indeed more critical for this year's economic growth momentum. Whether it is to stabilize aggregate demand, promote large-scale equipment renewal, or accelerate scientific and technological innovation, fiscal policy support and guidance are actually needed. Chen Li:In terms of expanding domestic demand, we look forward to stabilizing investment and promoting consumption. In terms of consumption, we focus on how the central and local governments will link up in the implementation of the trade-in policy for consumer goods; In terms of real estate, we will focus on the linkage between fiscal policy and monetary policy, as well as the incremental policies related to the "three major projects"; In terms of debt, we will focus on the investment of special bonds in areas and regions, as well as the increase in funds such as treasury bonds. In terms of the capital market, we look forward to more vigorous policies to improve the quality of listed companies, boost investor confidence and stabilize the capital market. Zhao Wei:This year's two sessions will focus on policy expressions such as economic goal setting, fiscal strength, risk prevention, localized bonds, industrial development, and the new model of real estate development of the "three major projects". Dong Zhongyun:As for the expectations and key contents of this year's two sessions, first of all, the formulation of this year's economic growth target and the corresponding macroeconomic regulation and control policy measures and key tasks. Last year, China's economy successfully completed the economic growth target of about 5%, this year's external situation is still complicated, the domestic economy to further repair need to rely on policy to promote the rebound of domestic demand, of which fiscal policy will be an important starting point for expanding domestic demand, the deficit rate target, the scale of special debt, whether to further issue special treasury bonds, etc. are all important contents that highly affect the expectations of the market economy. The second is how to further deepen reform and risk prevention and control this year. In terms of reform, focus on whether there will be major measures in the fiscal and taxation reform and the division of financial and local financial powers between the central and local governments, and focus on the policy signals in the real estate sector in terms of risk prevention. IIGDP growth is expected to be 5% in 2024China ** Daily: What are your expectations for the economic growth target in 2024? Obviously:In order to realize the long-term planning of China's economy, the economic growth rate in normal years during the 14th Five-Year Plan period should be maintained at a relatively reasonable level, combined with the economic growth target announced by the two sessions, it is more likely that about 5% will be the economic growth target for this year. Zhang Jun:**The target is still expected to set GDP growth in the range of around 5% in 2024. The tone of China's economic gradual recovery has not changed, and the momentum of the real estate industry has weakened after two consecutive years of rapid decline, and the impact on the economy has weakened, and the economy is expected to run smoothly. In terms of sub-sectors, consumption continues to recover, infrastructure supports the economy, and the manufacturing industry is likely to remain high, and the prospects for economic recovery are still not bad. Guo Lei:I expect the full-year economic growth target to continue to be around 5%. It is worth noting that this year's 5% is actually faster than last year on a comparable basis due to a more normalized growth base this year. Chen Li:The GDP growth target for 2024 is still expected to be around 5%. On the one hand, the economic growth rate of 5% is the consensus data of the market for stable growth and employment. At the end of October 2023, the Ministry of Finance announced the issuance of additional trillion yuan of treasury bonds and the reduction of reserve requirement ratio and interest rates at the beginning of 2024, further highlighting the determination to stabilize growth in 2024, and it is expected that GDP will still achieve about 5% growth in 2024 under the expectation of a more positive tone of the stable growth policy. On the other hand, according to the local two sessions, the weighted average economic growth target growth rate of each province is 54%, Beijing, Shanghai, and Guangdong all have economic growth targets of 5%, so it is more appropriate to set the national economic growth target of 5% in 2024. Zhao Wei:In 2024, the process of fiscal policy shifting from "accumulation" to "strength", and the strength of the economic "cycle" are also conducive to the lifting of the growth center. Historically, the real interest rate and inventory behavior are inverse and weakly leading. At present, the real interest rate is at an absolute historical high and the downward trend has been determined, the real inventory level is at a historical low, and the trend of repair has also begun, coupled with policy support, the actual economic performance in 2024 may further improve compared with 2023, and the annual GDP growth rate is expected to reach about 5%. Dong Zhongyun:It is expected that the general direction of this year is the further recovery of the economy, but at present, the private sector balance sheet repair is slow, and the problem of insufficient domestic demand is still more prominent, ** The economic work conference made it clear that macroeconomic regulation and control should be strengthened in 2024, and the combination of fiscal spending and monetary easing is expected to continue to provide upward repair momentum for the economy, and it is expected that the budget deficit rate this year will not be less than 3%, and the policy interest rate level will further decline. The policy-driven recovery of consumption and real estate will be an important focus this year, and both are expected to further improve in terms of direction compared with 2023, and we expect the GDP growth target of this year's two sessions to remain at around 5%. At the same time, we are optimistic about the overall economic recovery situation in 2024, and we expect GDP to reach 5% in 2024 under the condition of further efforts to stabilize growth. IIIScientific and technological innovation is the future economic policyFocus on the direction of forceChina ** Daily: In terms of scientific and technological innovation, what are your expectations, and what are the key aspects that you are expected to focus on? Obviously:**The Economic Work Conference has emphasized the importance of "developing new quality productive forces" and put "leading the construction of a modern industrial system with scientific and technological innovation" at the top of the nine key tasks. It is expected that the two sessions will further clarify the leading role of scientific and technological innovation in the construction of a modern industrial system, especially in the development of strategic emerging industries and future industries, and may introduce clearer support policies for the development of new quality productivity and scientific and technological innovation. In addition, as a hot area in the past two years, the field of artificial intelligence may also introduce more supportive policies and more detailed regulatory policies to promote the healthy and efficient development of the domestic artificial intelligence market. Chen Li:**The Economic Work Conference proposed to lead the construction of a modern industrial system with scientific and technological innovation. At the institutional level, it is expected that the formation of a basic system to support comprehensive innovation will be accelerated, and the reform of the scientific and technological system and mechanism will be further deepened and solidified. The quality and efficiency of capital market services for science and technology enterprises are also expected to be further improved. For traditional industries, helping the transformation of traditional manufacturing industry to high-end, intelligent and green is the key direction of the policy; For emerging industries such as the digital economy, artificial intelligence, and new energy, accelerating the incubation, layout, and formation of industrial clusters of emerging industries, as well as cultivating professional talents and providing financial guarantees for them, are the focus of possible policy efforts. Guo Lei:In my opinion, "scientific and technological innovation" can be understood from three clues: first, the current mainstream high-tech industry will undoubtedly accelerate its development and further form global competitiveness; Second, some strategic emerging industries and future industries, such as life sciences, commercial aerospace, and low-altitude economy mentioned in the first economic work conference, should use cutting-edge technologies and industrial standards to cultivate and give birth to new industries and new tracks; The third is the transformation and empowerment of traditional industries, which is actually the category of scientific and technological innovation. Zhao Wei:In 2024, under the balance of the two key tasks of risk prevention and stable growth, the report of the two sessions in 2024 in many places will put the acceleration of the construction of a modern industrial system as the top priority. The new first-scale equipment update or an important starting point for accelerating the construction of a modern industrial system. In 2022, the special re-lending policy support areas for equipment renovation and transformation will be education, health, cultural tourism and sports, charging piles, new infrastructure, industrial digital transformation, energy conservation and carbon reduction transformation and upgrading in key areas, and equipment purchase and renewal in the fields of waste household appliances treatment system. At present, under the guidance of the new first-scale equipment update, the policy may further coordinate efforts, the scale and maturity of structural monetary instruments may be extended, and the coverage and number of projects may be further expanded on the basis of 2022. FourthIt is hoped that policy support for consumption will be increasedChina ** Daily: What policy directions are expected to be in terms of expanding consumption and demand, and what are your suggestions? Obviously:Recently, the fourth meeting of the Financial and Economic Committee pointed out that the implementation of large-scale equipment renewal and trade-in of consumer goods will effectively promote investment and consumption, which is beneficial to the present and more long-term. Large-scale equipment renewal, trade-in of consumer goods, and logistics cost reduction are expected to become new focus points for expanding consumption and demand. Specifically, the update and technological transformation of production equipment and service equipment, the trade-in of traditional consumer goods such as automobiles and home appliances and durable consumer goods, the optimization of the transportation structure, the development of new logistics models that are compatible with the low-altitude economy and unmanned driving, and the optimization of transportation infrastructure construction and the layout of major productive forces will be the direction of the policy. In this process, it is necessary to pay attention to the synergy between policies and give better play to the effect of policy combination. Zhang Jun:At this stage, it is divided into two parts for the expansion of consumption and demand. In terms of household consumption, we will continue to promote the traditional trade-in, consumption tax reduction, and electric vehicles to the countryside. More support for real estate consumption. On the other hand, it is still necessary to rely on finance to start project construction and cover the economic gap after the real estate downturn. Chen Li:The meeting of the Central Finance Committee proposed that the implementation of large-scale equipment renewal and consumer goods trade-in, continuing the policy tone, is expected to focus on the "central and local linkage, to promote home appliances, new energy vehicles, etc. to the countryside, trade-in" specific policies. It is suggested that in the process of expanding domestic demand and promoting consumption, "promoting income" should be put in the main position. As stated at the Politburo meeting at the end of July 2023, it is necessary to expand consumption by increasing residents' income and drive demand through terminal supply. Consumption stimulus that lacks an income base can only play a certain role in the short term, and it is fundamentally necessary to promote the business cycle and efficiency improvement of enterprises, and restart the virtuous cycle of "employment-income-consumption". Guo Lei:Recently, the first meeting of the Financial and Economic Committee proposed to promote the trade-in of consumer goods and stabilize the consumption of durable consumer goods should be the key direction of the policy. In addition, I personally feel that there is room for imagination in service consumption. The service consumption data during the Spring Festival holiday actually exceeded expectations. The main reason is that the Spring Festival in 2024 is the first normalized Spring Festival after the epidemic, and the living radius of residents has expanded significantly, and the demand for travel will drive service consumption and even commodity consumption. We have seen that in recent years, many cities have also actively "labeled" service consumption fields such as tourism, events, entertainment, and catering, which is a good trend. Zhao Wei:Since the smooth transition of epidemic prevention and control, the meeting has repeatedly emphasized that the recovery and expansion of consumption will be given priority, and many departments have proposed to promote consumption from the aspects of residents' income, financial services, and consumption environment; At the local level, consumption vouchers, consumption festivals, exhibitions, cultural and tourism activities are used to boost consumption supply. Recently, the fourth meeting of the Central Finance Commission focused on emphasizing that "consumer goods are exchanged for the new, and it is necessary to adhere to the linkage between finance and local governments, and coordinate and support all links in the whole chain" or point to the follow-up fiscal increase to promote consumption, and fiscal policies such as trade-in subsidies and tax exemptions may effectively promote the recovery of durable goods consumption such as home appliances and automobiles. FiveLocalized bonds, "three major projects", etcAll of them are the direction of fiscal forceChina ** Daily: In terms of macroeconomic policy adjustment, how do you think fiscal policy should be exerted this year? Obviously:At the beginning of this year, the "People's **" published the Ministry of Finance's Party Secretary and Minister Lan Fo'an's Q&A on the current economic and financial situation. Under the goal of "ensuring that the scale of total fiscal expenditure increases," it is expected that the year-on-year growth rate of this year's expenditure budget will not be lower than last year's level. In terms of macroeconomic policy, the coordinated efforts of fiscal and monetary policies may become the policy orientation of this year, and the construction of localized bonds, the construction of the "three major projects" and the promotion of consumption may be the direction of fiscal efforts. Zhang Jun:In terms of fiscal policy, it is expected that the deficit ratio of the ** work report may be at 3About 5%, the local ** special bonds will increase by about 4 trillion yuan, and at the same time, there may be 1 trillion yuan of special treasury bonds issued in 2024. In addition to guaranteeing the minimum amount of local debt, the government is expected to invest more in: (1) major projects in the 14th Five-Year Plan; (2) water conservancy and public facilities projects related to people's livelihood; (3) The "three major projects" involving affordable housing, "peacetime and emergency" public infrastructure, and urban village transformation. While fiscal spending increases, the monetary policy will cooperate with the RRR and interest rate cuts, and at the same time encourage commercial banks to release loans. The central bank can also release funds to policy finance banks through the PSL. Chen Li:On the whole, the proactive fiscal policy should continue to be more efficient and more targeted and effective. In terms of "afterburner", we will increase counter-cyclical adjustment, mainly increase leverage, drive domestic demand, and further optimize the structure of fiscal expenditure; We will continue to improve tax support policies, and improve preferential tax policies for enterprises in specific industries such as strategic emerging industries, science and technology innovation, and private enterprises. In terms of "efficiency improvement", we will focus on key areas such as new infrastructure and urban village transformation to stimulate domestic demand and boost investment while ensuring people's livelihood. We will continue to prevent and resolve local debts, implement a package of debt reduction plans, optimize the debt structure of local and local governments, and appropriately adopt the methods of supporting local governments to help local governments alleviate debt pressure. Zhao Wei:Regions may need to "fulfill their responsibilities", with large economic provinces and key debt provinces and cities needing to take more responsibility for stabilizing growth, while key debt provinces and cities should pay more attention to risk prevention, deepening debt and strictly preventing new hidden debts. Between the central government and the local government, under the "debt" in some regions in 2024, ** may need to jointly increase the weight at both ends of the capital project. Dong Zhongyun:This year, the fiscal policy should be further exerted and serve as the main starting point for macroeconomic counter-cyclical regulation and control. Fiscal policy needs to act as a conduit for the transmission of easy money to easy credit, form a strong support for the overall domestic demand at the macro level by expanding spending, and drive the further repair of the balance sheet of the private sector through the economic cycle. SixThere is still a possibility of a rate cut this yearChina ** Daily: In terms of monetary policy, the central bank has cut the reserve requirement ratio since the beginning of this year, and the LPR has cut interest rates sharply. Is there room for downward adjustment? Obviously:After the LPR** was lowered from the MLF, the net interest margin of commercial banks was compressed to a historical low, and under the promotion of the reform of the interest rate market-oriented mechanism, there is a possibility of further reduction in the deposit interest rate under the pressure of net interest margin. Looking backwards, under the trend of global monetary policy easing, there is a possibility that the MLF interest rate will be lowered in the second quarter. In the fourth quarter of 2023, the cargo policy report set the tone of seeking progress while maintaining stability, promoting stability with progress, establishing first and then breaking, and at the same time putting "counter-cyclical adjustment" in front, and the easy currency statement was more positive; In 2024, the monetary policy of major overseas developed economies is expected to turn loose, and the external resistance of China's monetary easing may be further eased. Overall, there is still a possibility that the MLF rate will be lowered in the second quarter, and the 1-year and 5-year LPR may also be lowered. Zhang Jun:The decline in LPR at the beginning of this year was mainly for the long-end LPR, and the short-end LPR did not change. The policy level wants to concentrate funds on longer-term loans. At the same time, due to the continuous decline in China's inflation level, the CPI will show negative growth in the second half of 2023, making China's real interest rate passively at a high level, making the nominal interest rate still high. Therefore, China's interest rate will continue to be lowered in the future, and there is sufficient room for reduction at this stage. From the perspective of economic growth, China's potential growth rate may fall back to about 5%. We calculate the potential growth rate at 5At around 5%, the desired one-year LPR is expected to be 3About 1%. At this stage, the 1-year LPR is at 345%, the interest rate is still around 70bp 80bp. Guo Lei:The central bank's important principle for regulating interest rates is that the real interest rate roughly matches the potential growth rate, and with reference to the central bank's estimate of the real interest rate, it is still necessary to continue to push the real interest rate downward this year. Chen Li:In view of the negative year-on-year growth of China's CPI and PPI in December 2023 and January 2024, it is more likely that the follow-up monetary policy will continue to exert force. Looking ahead, there is still the possibility of another RRR and interest rate cut during the year, and the specific timing depends on the performance of the real estate market, financial market, as well as macro indicators such as social finance and prices. In addition, PSL is expected to be renewed, and policy financial instruments are expected to be restarted. Dong Zhongyun:The steady growth policy during the year is inseparable from the further support of monetary policy. Judging from the trend of LPR in recent years, the 1-year LPR has been adjusted 3 times since 2022, and the LPR of 5 years and above has been lowered 4 times, basically maintaining the rhythm of 2 adjustments per year. It is expected that there is still room for further adjustment of the policy rate during the year. SevenA number of measures such as the capital side and the supply sidePromote the healthy development of the capital marketChina ** News: What are the policy suggestions for the recovery of confidence and healthy development of the capital market? Zhang Jun:First of all, we should strictly control the entry threshold for IPOs, speed up the improvement of the delisting system, ensure that only enterprises that meet high-quality standards can enter the market, and eliminate companies that no longer meet the listing conditions in a timely manner, so as to fundamentally improve the quality of listed companies. Second, the strictness and transparency of the information disclosure system should be enhanced, and the efficiency and fairness of the market should be improved. In addition, for violations, the punishment will be increased to maintain market order. By raising the cost of violations, strengthening the monitoring and punishment of illegal acts such as market manipulation and insider trading, and ensuring the establishment of effective market discipline to ensure the fairness and order of the market. At the same time, in order to achieve the long-term and stable development of the capital market, it is necessary to increase the guidance of medium and long-term funds. Promoting the entry of medium and long-term capital such as pension and insurance funds into the market can not only enhance the liquidity of the market, but also promote the depth and breadth of the capital market and support the development of the real economy. Finally, we should implement macro-prudential regulatory policies and enhance our ability to manage systemic risks. Identify, monitor and mitigate systemic risks and improve the soundness of the financial system by introducing or strengthening macroprudential regulatory tools, such as countercyclical capital buffers and additional capital requirements for systemically important financial institutions. Zhao Wei:First, we need to encourage the injection of medium- and long-term funds. The premise is that it is necessary to increase the dividends of listed companies, and it is also necessary to take into account the characteristics of large short-term fluctuations in equity assets, optimize the assessment mechanism of medium and long-term funds, encourage and guide the medium and long-term capital assessment cycle represented by annuities to be extended to 3 years, and adopt the rolling rate of return assessment. This is more conducive to the stability of the medium and long-term capital investment framework and trading behavior, and is also conducive to the long-term stable development of the capital market. Second, it is necessary to balance the number of listed and delisted companies, especially in the period of relatively low market sentiment, and to ensure that the number of listed companies is basically stable and the impact of financing and refinancing demand on the market is controllable. It is necessary to strictly control the entry of IPOs, strengthen the supervision of the whole process of listed companies, resolutely clear out unqualified listed companies, fundamentally improve the quality of listed companies, and severely crack down on all kinds of behaviors that disrupt the capital market. EightThe bond market is expected to continue the small-cycle bull market patternChina** News: Recently**out of Balianyang and regained 3000 points, has the bottom of the market been confirmed, has it ushered in an inflection point? How is the bond market judged this year? Obviously:For the bond market, long-term bond interest rates will remain low in the short term**, and in the long run, long-term bond interest rates may still have room to fall in the context of the central bank's clear monetary easing orientation. Zhang Jun:The convening of the two sessions is imminent, which is usually a window period for policy formulation and adjustment, and the policy "combination fist" is conducive to promoting the continuous accumulation of positive economic factors. In terms of the bond market, the domestic economic recovery is at a critical stage, and it is expected that the policy will continue to be easing. At the same time, the pace of interest rate cuts in major countries in Europe and the United States has entered a certain track, and the coordination of domestic and foreign monetary policies has been improved. In the context of the implementation of loose monetary policies in major countries around the world, there is room for downside in the domestic interest rate center, and the bond market is expected to continue the small-cycle bull market pattern. Zhao Wei:**In the short term, the peak of the liquidity shock has passed, and the over-falling sectors in the early stage are expected to benefit from the recovery of sentiment. In the medium term, the logical chain of "economic expectation repair", the upstream of the real estate and infrastructure chain may relatively benefit. The potential risks of the bond market may be accumulating, and there may be periodic adjustments with the rise of capital risk appetite, but the adjustment may be relatively limited in the context of "asset shortage". In the short term, under the limited downward space of fund stratification and non-bank fund interest rates, institutional leverage behavior is still prominent, and we are wary of repeated market sentiment. The economic recovery in the process of the gradual implementation of the "three-step steady growth" has led to the accumulation of negative factors in the bond market. In the medium and long term, in the context of momentum switching and the release of some risks, deterministic assets enjoy premiums, and the downward trend is relatively clear. The shortage of institutional assets is still prominent, and the demand for interest rate bonds and high-rated credit bonds is still strong. Guo Lei:I understand that the first phase after the holiday is mainly a repair of risk appetite, and the pricing of the second phase will depend on fundamentals. So one potential space for the future is nominal growth and a recovery in corporate earnings. There are several favorable conditions in 2024: first, the position of the overseas inventory cycle is low, and exports are likely to be better than last year; Second, the implementation of additional treasury bonds and the promotion of the "three major projects" will be conducive to fixed asset investment; Third, the position of the first cycle is still low, and with the improvement of demand, the PPI center is expected to rise in the future. Against the backdrop of a possible modest pickup in nominal growth, interest rates are already on the low side and bonds are in a state of underpricing. Dong Zhongyun:At present, the Shanghai Composite Index has recovered 3,000 points, but the valuations of major indices are still at historically low levels. Based on the time window before and after the two sessions, the intensive introduction of stable growth policies, the care of the capital market by the regulatory authorities, and the expectation of leveling **, we are optimistic about A-shares** in the first half of 2024. From the perspective of market opportunities, the market is forming a consensus on the launch of high dividends, the reform of central enterprises and the introduction of market value management assessment, and is relatively optimistic about the high-dividend sector of central enterprises with high defensive attributes and the artificial intelligence field with weak correlation with economic data. Recently, the State-owned Assets Supervision and Administration Commission (SASAC) held a special promotion meeting on "AI Empowerment Industry Renewal" for enterprise artificial intelligence, requiring enterprises to accelerate the layout and development of intelligent industries, accelerate the construction of a number of intelligent computing centers, etc., and focus on the performance of technology-related central enterprises. After the signal on the right is confirmed, you can focus on the pro-cyclical sector. In terms of the bond market, the easing expectation of "interest rate cut + RRR cut" has been realized in stages, and the convening of important meetings will increase the policy game in the short term, and the bond market yield may fluctuate at a low level. Editor: Captain Review: Xu Wen.