Economic outlook for the second half of the year on the table

I personally study the trend of the economy, and often make comprehensive judgments through three channels:

1. Look at the trend of statistical data;

2. Listen to the guidance of news broadcasting;

3. Have dinner with friends in the financial and business world to perceive the temperature of the economy.

And what is said at the table is everyone's most intuitive life feeling. At the recent dinner table, there are many worries, and the words that appear frequently are: "Why is it so difficult?" It's harder than it was during the pandemic."

Some are worried about the economic outlook to unprecedented levels, and slightly sluggish the accumulation of headwinds. "Difficult" is normal, Jackie Chan has been singing for 30 years: no one can succeed casually.

Past experience shows that in the next 1 to 2 quarters where sentiment nadir is low, sentiment repair and expectation adjustments will creep in, and short-term investment opportunities will emerge. Let me first talk about the main concerns that everyone has seen and heard, and then talk about the areas where macro-level positive factors are quietly accumulating.

First, many people worry about the deterioration of personal income. I think this is the core factor hindering the recovery of consumption and new investment.

A certain Jun A, 42 years old, financial elite, when his salary was 40,000 yuan 8 years ago, he dared to buy a car of 300,000 yuan and borrow a mortgage of 4 million. The car from 8 years ago has now become a classic car, but he does not dare to change the car. The past three years have been difficult, he has not received a single bonus, and he does not know how long the job will last. Layoffs, salary cuts, and salary limits aren't just in the news, he has to keep an eye on the money he has.

Shanghai's minimum wage is 2,690 yuan, I said: you are 20 times the minimum wage, at least 900 million people say that you are a proper rich person, don't complain. He said: "But I am properly under pressure in Shanghai.

Indeed, the price of a bowl of noodles in Shanghai gradually exceeds that of Hong Kong, and the price of a simple meal in New York in US dollars is similar to that in Shanghai. The three mountains ridiculed by middle-aged Shanghai people at the dinner table are: children go to international schools, pay tens of millions of mortgages, and have full-time wives. Although middle-aged men have assets to earn high salaries and personal consumption is lower than pets, as long as there are problems with work, cash flow is immediately stretched.

Outside Shanghai, if income and expenses are converted proportionally, the middle class in a second-tier city with an income of 10,000 yuan must maintain a mortgage of 1 million yuan and an expenditure of 5,000 yuan, and the middle class in a county town with an income of 3,000 yuan is worried about a mortgage of 200,000 yuan and a monthly expenditure of 2,000 yuan for children going to college.

A Jun may represent the widespread concern of the nation's middle and middle class.

If aging and getting old before getting rich is a big social problem, the problem of the elderly and the problem of making money have to be borne by middle-aged people. People between the ages of 35 and 55 account for about one-quarter of the country's population, and the "main middle-aged people" between the ages of 35 and 45 are about 150 million. When this group of middle-aged people were young, they used marriage, buying houses, chicken babies, and leverage to promote China's economic development. Now young people in their twenties and thirties, do not buy houses, do not get married, do not have children, how to fill this consumption gap?

Worried about future expectations, middle-aged people put income stability at the highest priority. A society does not lose its vitality when it enters an aging society. The middle-aged man is old, powerful, skilled and experienced, and it is the sun at noon. Middle-aged people dare not start a business, dare not innovate, do not want to do more business, the willingness to invest declines, and the economic vitality of society will disappear.

From the perspective of developing the economy and undertakings, middle-aged people who have lost their fighting spirit cannot bring young people full of fighting spirit. If the sun at 12 o'clock at noon and the sun at eight or nine o'clock lie flat together, you will enter the zombie-like national elderly society in advance.

So, the mantra on my table is: chicken babies are not as good as chickens themselves, and middle-aged should be self-reliant!

Second, there is widespread concern about falling house prices. The real estate chill is being transmitted from developers to the general public.

A certain Jun B, in a provincial capital city, bought a house of 3 million yuan at the peak price point, or a school district house, but now no one buys it for 2 million;

A certain Jun C said that his hometown relative had just sold a house, down 30% from a high level, fortunately it was sold early, otherwise it would not be able to sell it at a lower price;

In the most stable Shanghai property market, the number of selling listings is large, and the rent of housing is also falling, and the decline is not small (see the article "Shanghai Renting Notes");

A certain Jun D said that the president of a bank told him that the proportion of mortgage loans that could not be paid was rising recently.

It should be emphasized that these cases are not widespread and only exist in a few regions.

The decline in residents' balance sheets is a hot topic of discussion among economists recently, emphasizing the debt ratio of residents. Some argue that China has already seen a similar scene to the Japanese '90s, and that falling house prices could trigger a series of chain reactions.

The signs of falling house prices have indeed appeared in individual cases. Panic is contagious, and the more it falls, the more no one buys. Once there is a trend decline, people's expectations will be worse, and the economic outlook will be difficult to predict. Economic policy should place the stability of housing prices in an extremely important position.

Speaking of this, the view of E Jun, who usually drinks two sips of wine and becomes angry, is: You people are rich people with houses and cars, you represent the interests of the rich, and your starting point is to consider from the perspective of the rich and the middle class. Isn't it great that house prices have fallen, rents have fallen, and everyone can afford to buy a house? The state will not bail out the property market.

In fact, I recently wanted to go back to my university economics teacher and ask him two questions:

1. Under the conditions of market economy, are the rich, middle class or ordinary people with the greatest flexibility in consumption?

2. Are the rich, the middle class or ordinary people who drive the most from the source of new consumption and investment?

I recently went to the Philippines in Southeast Asia and I found that the Philippines has a big problem developing its economy. The Philippines has a population of 100 million, equal to the population of Jiangsu and Shanghai, they have a large gap between the rich and the poor, there is no large middle class, and the demand for consumption upgrading is very weak. We must not be polarized, and common prosperity requires the consolidation and expansion of the middle class.

Third, confusion about future development opportunities. This confusion arises at all levels.

As mentioned earlier, wage earners are worried about job safety, and the economic situation of each small family is closely related to our country's economy and industry prosperity. If your industry is thriving, you will not be confused and will work fast.

Small and medium-sized business owners with relatively stable operations also want to keep up with the new economy and new situation, and want to achieve hundreds of millions of revenue from tens of millions of revenues, from hundreds of millions to billions. But interlacing is like a mountain, how difficult it is to shift from old kinetic energy to new kinetic energy. The transformation of new and old kinetic energy is not the transformation of old industries into new industries, but new people making new industries.

A business owner's knowledge, cognition, learning ability and willingness to learn are limited, it is impossible to keep up with the new situation step by step, and it is impossible for everyone to embrace the AI era. Someone must be brutally eliminated.

To be an emerging industry, young people are the future. They should have dared to do it. But according to my observations, there are not many young people who dare to do things. The deep-seated reasons for this problem need to be found in social orientation and youth education. Most of the families of urban young people have a decent economic condition, and they call them "going ashore" for postgraduate and public examinations.

Can graduate school and public examinations really "go ashore"?

The post-60s and post-70s generation of their fathers and elder brothers, they went to sea, started businesses, and struggled, and few people dared to say that they had "landed". What young people on the Internet say about "going ashore" is actually getting a stable job. Yan Ning, a scientist, said that he recently interviewed more than 20 undergraduate students seeking doctoral degrees, asking them what scientific or technical problems they most wanted to explore, and most of them did not seriously think about it.

The post-80s generation was once called the "little emperor", compared to Japanese teenagers, and was feared to become a beat generation. The post-80s generation did not cross, and the Japanese economy fell into the quagmire for 30 years. If "stability" becomes the "landing" of the post-90s and post-00s, education becomes the goal, and conformity replaces thinking, then the next generation will really collapse.

In addition to the frightening online fraud discussed at the table, it is also complaining about which bank wants to lend you money to the most harassing phone calls you receive and which park's investment tax policy is very good.

This is really strange -

What went wrong with our bank and why did it become the workhorse of harassing calls?

Why do all kinds of arbitrage and policy loopholes burn wildfire?

Not to mention the social hot spot where the pontoon bridge was sentenced, when it was discussed, the people at the dinner table became indignant. This shows that there are still many areas that need to be reformed.

China's economy has bid farewell to barbaric growth, to the era of high competition, to the era of the need to fight for strength, no one can make money casually, and it is normal that the mentality of making money in the past golden age is easy to adjust at once. Coupled with the great changes in the world pattern, multiple social problems and multi-level factors, the confusion is understandable.

Readers will question, what you just said is the worry of the middle class, have you eaten with the people at the bottom? Do you understand their thinking?

I came to the big city from a small town as a problem solver, and the county seat and village town went back every year. They need more policy guarantees.

How to let the confused people's hearts shine, how to make the grassroots people not have to embark on the evil road of using facetime fraud, although these are not economic problems, but they are all related to the economy. With such a big country and such big regional economic differences, it is not easy to do a good job in the economy. So I often persuade my friends at the dinner table to complain about being too strong to prevent bowel breakage, and I still have to work hard after complaining.

I think I must knock on the blackboard to say that the recent signals indicate that more favorable conditions are accumulating.

From the perspective of the world situation, although the final outcome of the Russian-Ukrainian conflict is not clear, both sides should know better than before that the result of escalating confrontation is that both sides will lose and recover. Russia has been stuck in a stalemate after more than a year of fighting and has not achieved the desired results. The Wagner affair is a wake-up call for Russia's domestic politics.

In the confrontation of rational people's decision-making, when the opposing sides pay a heavy price but cannot crush the other side, the option of negotiating and moving towards peace may have greater weight in the minds of the decision-makers of both sides than at any time.

From the perspective of Sino-US relations, the successive visits of representatives and executives of large US enterprises to China are a sign that Sino-US relations are developing in a good direction.

At the end of June and the beginning of July, the name of the Chinese business entity of Goldman Sachs, the largest brokerage in the United States, was changed to Goldman Sachs China, and Goldman Sachs China became a wholly foreign-owned company; Modena, the largest mRNA vaccine company in the United States, has built a factory in Shanghai, with an investment of $1 billion. Wall Street and big American companies know exactly where to make money, which is both a signal of China's opening up and a signal that foreign capital is willing to continue investing in the long term.

China and the United States respect each other, divide each other's labor, and do not challenge each other, which may become the consensus of both sides. To engage in the economy, it is necessary to generate wealth with anger. It is a bit difficult for Europe and the United States to support countries that replace China's manufacturing industry in the short term. Europe and the United States are reluctant to pay for China's huge consumer power market.

If China wants to develop overseas, the largest market is still developed countries in Europe and the United States, and it is too difficult to make money in low-income countries. China's labor costs and price levels make it difficult for ASEAN, Africa, and even the Middle East to become a new continent for exporters.

From the perspective of domestic policies, the warm wind is hotter and releases more signals to support economic development. Senior leaders make intensive statements, on-site research, investment promotion, and hands-on. Representatives of private entrepreneurs such as Liu Qiangdong and Ma Yun returned to China one after another, and platform enterprises such as Ant Financial and Didi restarted a new journey. I believe that the decision-makers have seen the difficulties of the economy, and more policy benefits should be released in the second half of the year.

The ceiling of emerging industries such as biopharmaceuticals, information technology, high-end manufacturing, and new energy is far from reaching, and new technologies and markets have been emerging. One of the biggest surprises is artificial intelligence. Investors who used to lie flat, after using ChatGPT, instantly "scammed the corpse" and frantically grabbed AI. The situation of queuing up to buy computing power is emerging, and enthusiasm is being stimulated. This kind of pomp and circumstance may only be comparable to that of small traders lining up to wholesale clothes in the shortage economy of the 80s.

The transformation of new and old kinetic energy requires the transformation of entrepreneurs' cognition and ability, and requires patience. New opportunities are brewing. Natural selection, survival of the fittest, people who adapt to the environment are always on the move. Diligent people, do not say much at the dinner table, after eating, they have to catch up with the second and third sessions, and they have not stopped since the Spring Festival, doing research and development, running customers, and keeping an eye on changes in the situation at home and abroad, and their wisdom and diligence will bear fruit in the second half of the year.

Like a reversed basketball game, the turning point in morale is ignited by a spark. This Mars is a powerful dunk that makes the whole court flip or a precise three-pointer after a clever fit. Only amplification can turn the tide.

People are emotional animals and emotional animals, and people's confidence is often only one Mars away from ignition. Personally, I am optimistic about the opportunity of expected repair in the second half of the year, and I look forward to seeing the heavy ignition point in the policy in the accumulation of favorable factors in the fine water and long flow!