Based on objective facts, the macro economy in 2024 is judged

The grand narrative background of an era often depends on some real and objective trends of the era.

Taking the experience of the past 40 years as an example, when the domestic economy was developing rapidly, the vigorous Shanghai financial and securities market in the 90s in the TV series "Flowers", Mr. Bao and Xiao Ningbo, these self-employed individuals with distinctive and personal characteristics, were deeply marked by the times.

They are diligent, brave, daring, and dare to fight, as well as the rise of a large number of independent women's consciousness with Miss Wang and Reiko as examples, to a certain extent, the dreams of these individuals must rely on such an era of infinite possibilities.

The times have created a group of people to chase wealth, and it has also changed a group of people's optimistic views on the future.

As Xiang Biao, a professor of anthropology at the University of Oxford, said, "In the past, the whole life of young people was shaped by the idea of the times: as long as you study hard, then after working hard, there will be a job and a decent life with a high salary waiting for you." Now they find that the ideas of the times no longer work. ”

The narrative of the times changes the concept of a generation, and the change of concept further affects the decision-making and even behavior of individuals, and the change of individual decision-making further leads to changes in macroeconomic trends, and these changes are reflected in the data, that is, growth or decline, and the concepts and behaviors of these individuals ultimately confirm the trend of the future macroeconomy.

Looking back at 2023, this year is the first year of the lifting of lockdowns, and it is also the year that many economists and even business executives believe that there will be an economic recovery and even revenge consumption, but looking back at the economic data of the past year, we find that the ideal revenge consumption and full economic recovery have not arrived.

Instead, the economic recovery is weak and slow, and the recovery of consumption is also up and down.

In my opinion, the most frequently mentioned words in the past year are structural issues and systemic risk, which go some way to explaining the essential reasons for the macroeconomic weakness in 2023.

Structural and systemic risks, in a market economy full of uncertainties, we will still face many challenges in 2024.

01

Employment and income

In August 2023, the mainland's youth unemployment rate hit a record high of more than 20%, and since then, no youth unemployment rate has been released, but the suspension does not mean that the problem is not serious.

The real situation may be quite the opposite.

Employment determines a person's current income, as well as optimistic expectations for the future, which also determines people's consumption, and a person controls his consumption and entertainment expenses according to his income and job stability.

Theoretically, the better the income data, the more optimistic people are about the future, and the better they will spend.

However, in the past year, we have seen that all major consumer goods markets are fighting price wars, from milk tea, coffee, new energy vehicles to clothing, etc., the price war has burned almost the entire industry, and the direct reason behind this is actually the price reduction and inventory behavior caused by the downturn in consumption.

If the company reduces the price and destocks, the corresponding profit margin decreases, so the employee's salary will either be reduced or face the situation of being optimized, and there is no third way.

The choices of young people also bear this out.

In November last year, more than 3 million people took the examination, which broke the record, and the examination means stability and security, but at the cost of losing the possibility, and now more and more people choose to take the examination, which shows that the main body of young people's expectations for the macroeconomy has changed significantly.

Changes in employment and incomes are bound to dash young people's dreams of working hard for wealth, which can not only bring disappointment, but may even breed a sense of disillusionment.

Bloomberg compiled data from Zhaopin.com and calculated that over the past year, the wages of workers in mainland cities have fallen by a record, and the company has offered new hires 1.3 percent less than a year ago.

The 1.3% wage drop may not seem like much, but in terms of the data, it's a record decline, and it may be just the beginning, not the end.

In addition, considering the quantitative easing of money in the past year, the 1.3% wage decline, if combined with the monetary release, then the actual wage decline will only be higher.

That's the worst thing.

For 20 consecutive months, M2 has been issued at a rate of more than double digits, far exceeding the nominal growth rate of GDP, ostensibly to stimulate the market, but in fact it has not played a role in stimulating the market, and most of the excess money has been converted into household and corporate savings.

The high savings rate has become illiquid capital in the bank, which has failed to stimulate the macroeconomy, and the traditional monetary theory has failed to stimulate it, which shows that the confidence of the entire market has reached a very critical juncture.

The price war that lasted for the past year has brought consumers not only the benefits of low prices, but also the decline in commodity prices for employees, which must come from the further compression of various costs by enterprises, including labor costs.

02

Assets and liabilities

In the past, appropriate leverage can boost efficiency, and leverage is to borrow future money to develop today's economy, but there is also a cost to leverage, including interest costs, so leverage also needs to have a reasonable rate of return.

Today, as the dividends of the market are further released, at this time, whether it is local debt or household, enterprise and real estate debt, more and more leverage is also testing future profitability.

In 2023, the local government will issue 9,325.3 billion yuan of bonds, once again hitting a record high.

In addition, the increasing number of local debts has also forced local governments to embark on the road of borrowing new debts to repay old debts, which is also a rather thorny problem.

Of course, the local problem is not just debt, but also income.

In 2023, the income from land transfer will be 4.7 trillion yuan, down 15% year-on-year, of which 3 trillion yuan will be acquired by non-urban investment, an increase of 325.6 billion yuan over last year, and 1.7 trillion yuan will be from urban investment, a decrease of 1.17 trillion yuan from last year, a decline of 39%.

This shows that it has become more and more difficult for urban investment to support local land finance, so the next question is where to find local income in 2024.

How to fill the gap of more than 3 trillion is a relatively big problem.

In the past, one of the biggest sources of local income was land sales, and last year's real estate market was not good, which led to a sharp decline in local land sales income, and the high expenditure in the past further overdrafted the local cash flow.

Of course, the downturn in real estate not only affects local spending, but also determines the level of household consumption.

Although many people will not sell their houses because of the rise in house prices, the rise in asset prices can indeed bring people an expectation that their wealth will increase, which is a key factor that supported people's consumption in the past.

Today, the real estate sector is down, and asset prices are starting to fall, which has also shrunk the assets of many middle-class households, further weakening already sluggish consumption.

The problem of assets and liabilities can be large or small, at best, it is a systemic risk, and at worst, it also suppresses some consumer demand.

This year's focus is not only to guard against financial systemic risks, but more importantly, to fully release the vitality of the private economy and enhance the confidence and certainty of the entire macroeconomic consumption level.

03

Globalized trade

Globalization is also a topic that has never been avoided, and the trade and employment opportunities represented by globalization have always been one of the troikas driving the mainland's economic growth.

However, with the complexity of the international situation, globalization has changed from being market-oriented in the past to being risk-proof, and the US-led friendly shore outsourcing has made Mexico the largest trading partner of the United States, while we have fallen from the first to the top three.

In addition, more and more manufacturing supply chains are migrating, and global investment is also shifting from domestic to Southeast Asian countries, and these emerging markets are faintly replacing us as a new gathering place for global venture capital.

Among them, Vietnam and India have attracted a large number of international funds and investments, trying to replace our position in the world's factory.

Of course, this is not a good thing, and the biggest challenge facing the mainland's economy in recent years is actually that domestic consumption is not enough to support the employment of 1.4 billion people, and externally, it is the transfer of globalization and the decline in orders, which have further weakened the driving force of the mainland's future economic growth.

In fact, globalization is to open the door to the country and do business with the world, and for a long time in the past, our largest business partners are Europe and the United States, their consumption power is strong, our manufacturing advantages are also obvious, the two sides hit it off, it is a win-win situation.

But today is different, where geopolitical risks have replaced the markets of the past, and this will also be somewhat a drag on our economic growth and recovery.

The logic behind this is actually very simple, Europe and the United States are the world's largest consumer markets, and we can't find a second alternative to the European and American consumer markets, but Europe and the United States can find a lot of supply chain markets that replace us.

Globalization will not disappear, it will only shift.

The rise of Southeast Asia has been a good confirmation of this, and the loss of Europe and the United States, the largest consumer market in our generation, the decline of orders faced by our manufacturing industry, how to fill this huge gap, and the eventual impact on the job market, is also a major problem in 2024.

In the new year, many people are concerned about how the macroeconomic situation will change this year, whether employment will improve, whether consumption will improve, and whether it will be difficult to make money.

Judging from the economic performance of the past year, frankly speaking, there will still be many difficulties waiting for us in 2024, and I am afraid that more people will choose to take the public examination this year, the depreciation of academic qualifications will still occur, and the involution will also continue.

Eventually, these trends may continue to influence young people's expectations of society, and we don't know if this will lead to a low-desire society similar to Japan's.

But what is certain is that for young people, they may need to be prepared to adapt to a change in which the era of high growth and endless possibilities may be a thing of the past.

It existed in Shanghai in the 90s and in the mobile Internet wave in 2010, but for 2024, new opportunities will come and go as quickly as a passing cloud.

Just like in the past 2023, we may think of Zibo barbecue and the Harbin tourism boom at the beginning of the new year, but such effects and heat will eventually come and go as quickly as a passing cloud.

I think for both businesses and individuals, we all need to adapt in the end, to lower our expectations for the future, to adapt to the changes of this era, rather than waiting for the era to adapt to us.

end.

Author: Luo sir, the workplace reference of the new youth. Concerned about the logic behind the development of things, optimistic pessimists. Follow me and grind the knowledge to you.