1. Highlights of the week

Chief Core Perspectives (March 18 – March 24, 2024)

Luo Zhiheng (Chief Economist of Guangdong Kai Securities): The highlights and concerns of the "good start" of economic data

Since the beginning of this year, the mainland's economy has continued to rebound and improve, and the economic data on consumption, investment, exports, and production from January to February have performed brilliantly, generally higher than market expectations. There is a high probability of a "good start" in the first quarter, and GDP is expected to be 5.5~6% year-on-year. This is in line with the pace of economic operation in recent years, thanks to the local government's "first meeting of the new year" to actively implement the deployment of the Central Economic Work Conference, the policy to move forward, the financial sector to increase support for the real economy, and the use of last year's additional treasury bonds in the first quarter of this year. From the perspective of economic momentum, the main reasons are the continued recovery of the service industry, the development of infrastructure investment, the continuous upgrading of high-end manufacturing and the export exceeding expectations.

While the economy has performed well at the beginning of the year, there are also hidden worries, which are reflected in the fact that the real estate, financial and price data are still low, behind which is the lack of macro aggregate demand and the lack of confidence of micro subjects.

At present, the foundation for economic recovery is still not solid, and due to the complex and severe external situation, internal risks and challenges, etc., the rhythm may show the characteristics of "wave-like development and zigzag progress". It is necessary to prevent a policy shift due to the "good start" of economic data in the first quarter, maintain the stability and continuity of policies, continuously consolidate and enhance the positive trend of economic recovery, and continue to promote the economy to achieve qualitative and effective improvement and reasonable quantitative growth.

Looking ahead, the policy of stabilizing growth should continue to exert efforts to fully tap the potential of demand. The first is to speed up the issuance and use of government bonds, form a physical workload as soon as possible, and at the same time make timely adjustments on whether to add to the budget according to changes in the situation and use them in the current year, so as to boost confidence and expectations. The second is to promote a new round of large-scale equipment renewal and consumer goods trade-in, boost manufacturing investment and household consumption, adhere to the "market-oriented, government-guided", and avoid one-size-fits-all behavior. Third, the monetary policy strengthens the dual adjustment of aggregate volume and structure, takes into account the exchange rate and the risks of small and medium-sized commercial banks, cuts the reserve requirement ratio in a timely manner and initiates a symmetrical interest rate cut for deposits and loans, so as to better support the development of the real economy. Fourth, on the basis of building a new development model, the real estate policy will continue to optimize the policy to ensure supply, promote demand and stabilize housing prices.

Guo Lei (Chief Economist of GF Securities): How to look at the economic performance from January to February

Economic data for January-February 2024 will be released. On the whole, the six major caliber data are in the process of improvement. (1) The cumulative industrial added value was 7.0% year-on-year, with a two-year compound growth rate of 4.7% after deducting the impact of the low base, higher than the two-year compound growth rate of 4.4% and 4.0% from November to December last year;(2) The total retail sales of consumer goods were 5.5% year-on-year, with a two-year compound growth rate of 4.5%, higher than the compound growth rate of 1.8-4.0% from September to December last year; (3) The service industry production index was 5.8% year-on-year, with a two-year compound growth rate of 5.7% (4) The cumulative investment in fixed assets was 4.2% year-on-year, with a two-year compound growth rate of 4.85%, higher than the two-year compound growth rate from April to December last year, and slightly higher than the 4.75% in December;(5) The cumulative export growth rate was 7.1% year-on-year, and the two-year compound growth rate was -0.95%, higher than that from August to December last year; (6) The cumulative area of real estate sales was -20.5% year-on-year, which was still weak; but including the impact of the base, the sales base continued to rise in the first four months of last year. From January to February, the two-year compound growth rate of real estate sales narrowed.

From the perspective of industry, the growth rate of the mining industry is lower than that at the end of last year, and the growth rate of the manufacturing industry has accelerated significantly. Among them, the consumer goods manufacturing industry is the main driving force, 4.4 percentage points faster than in December last year. We understand that the expansion of residents' living radius and the increase in service consumption during the Spring Festival have driven the production and supply expectations of the consumer goods industry. The output of major industrial products is differentiated, the output of smart phones as consumer goods has grown rapidly, with a year-on-year increase of 31.3%, and the compound growth rate of two years is also faster than that of all months last year; the growth rate of automobile production is average, with a year-on-year growth rate of 4.4% under a low base, and the output of new energy vehicles still maintains a year-on-year growth of more than 25%; cement output continues to be in a state of negative growth, reflecting that the construction industry chain is still weak.

From the perspective of consumption, the apparent growth rate from January to February was significantly faster than that of the whole, including communication equipment, catering, sports and entertainment goods, food, and automobiles, with a year-on-year growth rate ranging from 8.7% to 16.2%. Some of these products contain the influence of base factors, and the apparent growth rate and the two-year compound growth rate are mainly catering, food, and sports and entertainment products. To put it simply, if consumer goods are divided into four parts: eating, wearing, living and playing, the growth rate at the beginning of the year is mainly the "eating" part and the "playing" part, which is related to the expansion of residents' living radius and service consumption during the Spring Festival.

From the perspective of investment, real estate investment is still the main drag, while infrastructure investment and manufacturing investment have a high growth rate, 9.0% and 9.4% respectively, forming support. Real estate investment -9.0% is actually not negative information (WIND caliber expected average -12.2%), in 2024 facing the base of the high and low, if the starting data of January and February is -9.0%, then in the context of follow-up sales stabilization, base decline, and the impact of the "three major projects", the probability of real estate investment gradually narrowing to low single-digit negative growth is larger, and it is expected to meet the implied requirements of the 5% GDP target.

Judging from real estate-related data, the year-on-year growth rate of sales, new starts, construction, and completions is relatively low. The area of real estate sales was -20.5% year-on-year, down from -12.7% in December. It is a reality that the data is weak, but it should be pointed out that the year-on-year comparison in December last year was based on December 2022, and the year-on-year growth in January-February this year was based on the beginning of 2023 after the transition, and the change in the base is also one of the backgrounds. One reference is that the sales area in January and February this year is equivalent to 9.7% of last year's annual sales area, which is lower than the 11.1% in the same period last year (the release of supply and demand after the epidemic transition), but not lower than the seasonality of normal years (8.5% in the past 10 years). To put it simply, the current real estate weakness has not changed substantially, but it has not further intensified month-on-month.

The January-February economic data is a positive sign for the macro picture. The data of the "six calibers" are all better than the previous value to varying degrees, indicating that the macro economy is in an upward trend. At the same time, the economy is not without blockages, real estate sales, investment lows have not changed significantly, there is a transmission to the upstream and downstream industrial sectors; unlike the impression formed by the Spring Festival data, the two-year compound growth rate of consumption is only a moderate rebound, and the support of durable consumer goods is insufficient; the high-frequency data in March also have certain differentiation characteristics (see "A Preliminary Look at the Economy in March"). This means that it is still necessary to promote the expansion of fiscal resources in a broad sense, the acceleration of the implementation of the "three major projects", and the trade-in of consumer goods.

2. Economic outlook

Luo Zhiheng (Chief Economist of Guangdong Kai Securities): The highlights and concerns of the "good start" of economic data

On the whole, the momentum of China's economic recovery will not change, but due to factors such as the complex and severe external situation and internal risks and challenges, the foundation for economic recovery is still not solid, and the rhythm may show the characteristics of "wave-like development and zigzag progress". It is necessary to prevent a policy shift due to the "good start" of economic data in the first quarter, maintain the stability and continuity of policies, continuously consolidate and enhance the positive trend of economic recovery, and continue to promote the economy to achieve qualitative and effective improvement and reasonable quantitative growth.

At present, the biggest uncertainty facing the economy is still concentrated in the real estate and export sectors, and at the same time, it is necessary to pay close attention to the real estate downturn and the subsequent impact of debt on local government behavior and finance.

First, real estate sales and investment have not yet bottomed out and stabilized, and the transition and adjustment period is facing pains, affecting investment, consumption and local finance. At present, there is a differentiation between the new housing and second-hand housing markets, and the second-hand housing is exchanged for volume, and the performance of the first-tier cities is the most obvious, while the new housing is facing the high cost of land acquisition by real estate enterprises in the early stage, and the price reduction sales are easy to cause dissatisfaction among the people who have already purchased the house. From January to February, the transaction area of commercial housing in 30 large and medium-sized cities decreased by 38.6% year-on-year, and from March 1 to 17, it decreased by 58.8% year-on-year. The downturn in the real estate market has affected the sales collection of real estate enterprises, and the high debt risk of some real estate enterprises has led to banks being reluctant to lend cautiously, while real estate companies are facing the pressure of debt maturity and expenditure on guaranteed delivery, and the liquidity gap persists. Once the liquidity risk of real estate enterprises deepens and spreads, it will have an impact on financial stability, real estate sales and investment, and residents' employment and consumption.

Second, exports may be affected by factors such as the slowdown in global economic growth and geopolitical conflicts. The market generally expects the slowdown in U.S. economic growth this year and the Fed's monetary policy pivot, which will constrain the growth of global trade. This year is a global election year, especially the U.S. election has entered the white heat, the United States two parties play the "China card" to compete for votes, the recent U.S. restrictive policies on China's biomedicine, automobiles, artificial intelligence, Internet and other fields and companies have increased significantly, which will have an adverse impact on China's exports, industrial and supply chain security, capital markets, etc. Other geopolitical conflicts, such as tensions over the Red Sea, can also disrupt the normal exports of mainland companies. In March, exports fell year-on-year or due to the impact of a high base.

Wang Tao (Chief Economist of UBS Asia): Economic growth in January and February exceeded expectations, but downward pressure remains

After the Spring Festival holiday, the momentum of economic growth slowed down. Although the growth of industrial production, fixed asset investment and exports in January and February was stronger than market expectations, downward pressure on economic growth remained. Previously pent-up demand was released strongly during the Spring Festival holiday, but high-frequency data showed that economic growth momentum has slowed since the holiday and March, with real estate sales, Spring Festival passenger traffic, vehicle cargo flow index and construction project resumption rate all weakening (on a comparable basis for the Spring Festival). Real estate sales still fell sharply by 45% year-on-year 21 days after the Spring Festival, and there are no signs of stabilization. On the other hand, port cargo throughput and container throughput growth remained solid, echoing improved global trade activity and stronger-than-expected export growth in January-February.

The policy maintained a moderate and supportive tone. The two sessions set an economic growth target of around 5% in 2024, which is relatively aggressive, but the policy tone of the report and the policy support measures so far remain relatively modest, including a modest expansion of the fiscal deficit rate to 1% of GDP, and no large-scale monetary and credit easing. The government requires the city to further optimize the regulation and control of real estate, meet the reasonable financing needs of private developers without discrimination, increase support for affordable housing and urban village transformation, and reiterate that it will "unwaveringly" support the development of private enterprises and introduce more structural policies to promote economic transformation. After the two sessions, the government unveiled an action plan to promote equipment renewal and consumer goods trade-in, with plans to achieve an average annualized growth of 5.7% in equipment renewal investment in 2023-27, while supporting the sales of automobiles, household products and home appliances. However, the action plan does not mention any additional fiscal stimulus, which means that the relevant fiscal support may have been included in the government budget package approved by the two associations, and the overall scale should be relatively limited. Of course, the plan also encourages "conditional" local governments to provide subsidies for the trade-in of consumer goods and equipment upgrades, and encourages relevant production and sales enterprises to carry out promotional activities.

Further policy support is necessary, but it may take time. Our baseline forecast is that the central bank may increase PSL by another 300-500 billion yuan in 2024 to increase support for the construction of affordable housing and the transformation of urban villages, mainly to boost real estate investment and construction, while real estate policies will be further moderately relaxed. We expect the government to further push to mitigate local debt risks, while the financing of local financing vehicles may continue to be constrained, especially with strict control of new construction projects in 12 high-risk provinces. The latter could be a drag on infrastructure investment growth, despite the central government's increased financial support. Given that economic growth still faces downside risks, we believe that further policy support is necessary to stabilize economic growth, including increasing support for developer financing, expanding the coverage of the "white list" scheme for qualified real estate projects, increasing financial support for "guaranteed delivery", supporting local governments to directly purchase more housing in the market, and increasing fiscal support for consumption. However, these policies may only be introduced after weaker economic data, a further downturn in the housing market and more risk events are exposed.

Economic growth momentum is still facing downward pressure in the first half of the year, and may gradually recover in the second half of the year. We expect real GDP growth to remain weak in Q1 and could slow to 4.1% y-o-y in Q1 from 5.2% in Q4 due to a high base due to the reopening of the economy last year. Looking ahead, we expect property sales and new construction starts to bottom out in Q2, helping to prevent a further decline in household confidence. Coupled with further improvements in household income and the labor market, consumption is expected to continue to recover modestly. Although the central government's fiscal support has become more visible and increased, the growth of infrastructure investment is likely not to accelerate due to the continued constraints on financing by local financing vehicles. The global technology upcycle and stronger U.S. economic growth are expected to drive modest improvements in exports this year. Overall, given the relatively modest policy support but the persistent negative impact of the property downturn, we believe the "around 5%" growth target is aggressive and maintain our baseline forecast of 4.6% real GDP growth in 2024. At the same time, we expect CPI in 2024 to be at the lower end of the forecast range of 0.5-0.8%, given the weak year-to-date CPI performance (0% YoY in January-February), the still weak recovery in consumption, and the existence of overcapacity in some sectors.

Zhang Ming (Deputy Director, Institute of Finance, Chinese Academy of Social Sciences): The resilience of the U.S. economy may decline in 2024

The author believes that unless a major technological revolution has occurred in the United States and the technological revolution has begun to really affect economic growth, the probability that the U.S. economic growth will exceed market expectations in the same direction for two consecutive years is very small.

First, the author agrees with the judgment that the U.S. labor market will remain strong in the short term, which also means that the growth rate of core CPI in the U.S. is still sticky in the short term, and the Fed's first interest rate cut may not wait until the second half of 2024.

Second, considering that the expansionary fiscal policy in the United States has contracted significantly after the pandemic, the one-time income increase that American households received during the pandemic has been largely depleted, which means that the consumption growth driven by fiscal expansion is coming to an end. Third, if the Fed postpones interest rate cuts until the second half of 2024, the volatility of U.S. stocks may increase in the coming period, which will weaken the role of the wealth effect of the stock market on consumption.

In fact, in 2023, the growth rate of US fixed asset investment will be weak under the influence of successive interest rate hikes, and US export growth will be adversely affected by the strong dollar. If there is a correction in consumption growth in the coming period, then the US GDP growth rate may decline significantly.

The author's current judgment is that the growth rate of the US economy may slow significantly in the second quarter of 2024. Affected by the sticky core CPI, the Fed may cut interest rates for the first time in the third quarter of 2024, while the Fed may still cut interest rates by about 75 basis points in 2024, although the Fed cut interest rates for the first time late.

Under this judgment, it is expected that the US 10-year Treasury bond interest rate and the US dollar index will be mainly volatile in the first half of 2024, and may decline significantly in the second half of the year. In the second half of 2024, the US 10-year Treasury rate could fall below 4.0%, and the dollar index could fall below 100. At the same time, short-term capital outflows and local currency depreciation pressures in emerging market countries will ease significantly in the second half of 2024.

Lian Ping (Chairman of the China Chief Economist Forum): The timing of the Fed's interest rate cut depends on inflation

On March 21, the Federal Reserve issued the decision of its March interest rate meeting: to maintain the target range of the federal funds rate at 5.25%-5.50%, which is the fifth consecutive time that the Fed has kept this interest rate range unchanged. Despite the signals from the dot plot and Fed Chair Powell's more cautious rhetoric, the Fed has generally not significantly changed its outlook for rate cuts in 2024. Judging from the reaction to the rise in U.S. stocks and gold prices and the decline in the U.S. dollar index after the meeting, the market still has positive expectations that the Fed may implement about three interest rate cuts this year.

Theoretically, there are two main factors that constrain the Fed's rate cut process: the level of inflation and the employment situation. Judging from Powell's speech, the decisive role is undoubtedly played by the level of inflation.

Looking at the actual data, the indicators that measure the level of inflation in the United States are mainly the consumer price index (CPI) and personal consumption expenditures (PCE). The former is published by the U.S. Department of Labor, and the latter is compiled and published by the U.S. Bureau of Economic Analysis. According to the released CPI year-on-year data, it was 3.2% in February, which was not only significantly higher than the 2% target, but also rebounded from 3.1% in January, while the month-on-month CPI data in January and February also increased by 0.5% and 0.6% respectively. From the perspective of PCE, the February data has not yet been released, and the year-on-year growth rates of PCE and core PCE in January were 2.4% and 2.8% respectively, which is relatively close to the 2% target, but the month-on-month data also showed signs of a slight increase.

Given that PCE, especially core PCE, is the Fed's preferred inflation gauge, we believe that the cumulative effect of consecutive interest rate hikes over the past two years has led to a clear downward trend in US inflation. If the PCE year-on-year data released in the following months of the first half of the year remains below 3% and does not continue to expand month-on-month, the Fed is more likely to start the first rate cut in June, and if the PCE data fluctuates or rebounds significantly, the first rate cut may be postponed to July.

Zhao Wei (Chief Economist of Guojin Securities): What are the "new opportunities" for county-level consumption upgrading?

With the acceleration of the establishment of a unified national market, county-level consumption has become an important focus for expanding domestic demand.

-- The performance of county-level consumption has become more "dynamic" in recent years, showing a trend of diversification, service-oriented and brand upgrading

The county-level population accounts for more than half of the country's population, and the county-level community accounts for 46.3%, which is the cornerstone market of national consumption. With the continuous migration of rural population to county seats, the construction of a county-level consumption pattern of "county-centered, urban-led, rural-oriented" has been accelerated. In recent years, county-level consumption has become more "dynamic", with rural residents' consumption expenditure and consumption tendency performing better than those in urban areas, and the significance of county-level consumption to the local economy has also been strengthened, with the tertiary industry accounting for 44.8% of GDP.

County consumption is no longer confined to daily necessities, and the demand for categories is more diversified. From 2019 to 2021, new small household appliances such as clothes sterilizers, baking sets, air fryers, and leisure and entertainment products such as painting and photography, toys and musical instruments were rapidly popularized in the county, with an average annual growth rate of 100-324%. The diversified consumption characteristics of young and middle-aged people in the county are more prominent, and the proportion of monthly expenditure on social interaction and self-improvement is as high as 40%.

The consumer demand for life services in the county has increased significantly, and the trend of personalized and self-pleasing consumption is obvious. In the first three quarters of 2019-2023, the proportion of county-level residents' consumption orders for daily life services increased by 6.8 percentage points to 30.6% of the country, among which service orders such as beauty industry and local tickets grew faster, with an average annual growth rate of more than 40%. In recent years, the number of catering stores of brands such as Chabaidao and Haidilao has grown rapidly in fifth-tier cities and below.

-- The upgrading of county-level consumption is due to the sinking of e-commerce and other channels to break the supply constraints, and the industrial development to drive population agglomeration

Major e-commerce platforms have accelerated the continuous improvement of county markets and logistics distribution centers, and county and township residents have been able to break through the time and space constraints of original consumption. With the sinking of Internet infrastructure, the proportion of county-level online retail sales in 2021 rose to 33.5% of the country, and the consumption target accelerated to extend to service categories. The quantity and quality of commercial supply such as county-level homestays are also continuing to improve, with the number of rural homestays increasing to 330,000 in 2023, and the proportion of three-star and above restaurants rising to 8.9%, significantly enhancing the tourism reception capacity.

With the policy support and the recovery of the work situation, the income of rural residents has grown steadily, providing a solid foundation for county-level consumption. The county seat is the intersection of the upward leap and downward return of rural residents, and under the trend of population aging, the radius of migrant workers going out to work is shortened and the gathering of migrant workers to the county seat is accelerated. From 2011 to 2022, the average age of migrant workers increased by 6.3 years, and the proportion of migrant workers dropped by 4.6 percentage points to 58.1%.

The county seat is also the carrier of the sinking of emerging industries such as the digital economy, and the industrial development has led to an increase in the income of entrepreneurs returning to their hometowns, and the consumption potential of young people has been stimulated. Encouraged by policies such as industry and employment, the number of entrepreneurs returning to their hometowns nationwide has increased year by year, reaching 12.2 million in 2022. The average age of this group of people is 34 years old, younger than local entrepreneurs, the income level is relatively higher, and the consumption habits are closer to those of young people in first- and second-tier cities, and they are an important "emerging force" of county-level consumption

-- Consumption habits at the county level may accelerate the evolution to "quality" services, "branding" of goods, and expansion of catering

Driven by high-energy cities and high-quality industries, the economic growth prospects of counties in the eastern part of the mainland are more certain. From 2013 to 2020, the total GDP growth rate was 6.32%, and the total permanent population growth rate of the six and seven general populations was 7.7%, which was significantly higher than that of other counties. In terms of provinces, Zhejiang and Jiangsu have 25 and 23 advanced manufacturing base counties respectively, far ahead of other provinces.

In some of the Yangtze River Delta regions, the level of economic development and consumption has been basically the same as that of the cities where they are located, but there is still a lot of room for development in the tertiary industry. For example, the per capita GDP and consumption expenditure ratios of Cixi City are 1.06 and 1 respectively compared with Ningbo City, but the proportion of the tertiary industry is 11.4 percentage points lower than that of Ningbo City. The per capita income level of eastern counties is higher, and the growth potential of service consumption such as beauty industry, sports and fitness, and high-upgrade willingness categories such as home appliances and automobiles will be greater in the future.

The accelerated economic development and population agglomeration of some central provinces will help drive the expansion and upgrading of local county consumption. From 2018 to 2022, the average annual growth rate of manufacturing investment in Hunan, Anhui and Henan exceeded 10%, significantly higher than the national growth rate of 6.5%. Under the migration of population, there is more room for the expansion of catering consumption in the county, and livelihood commodities such as rice, flour, grain and oil show a trend of "branding".

3. Investment Strategy

Yang Delong (Chief Economist of Qianhai Open Source Fund): The mainland's economy has rebounded steadily, and the capital market has gradually recovered

With the continuous introduction of favorable policies and the gradual recovery of the economy, investor confidence has rebounded to a certain extent, and the money-making effect of the market will gradually be boosted, so the probability of the capital market getting out of the structural bull market is still very high.

From the perspective of the main line of investment, the most important main line of investment this year is the valuation of high-quality leading stocks, because in the past three years, the stock prices of many high-quality leading stocks have fallen sharply, and the price of high-quality leading stocks has been greatly discounted compared to the highs.

I think the bull market brought about by this round of capital market reform is a structural bull market, and only the valuations of these good companies will rise in a repairing way, and some bad companies will have no chance. Therefore, it is recommended that you stick to the concept of value investment, avoid chasing up and down, and trading frequently, so as to seize market opportunities in the medium and long term and fight a beautiful turnaround. The Year of the Dragon is a year when opportunities outweigh risks, we must seize the opportunity to start the bull market, this round of the market may not go too fast, but it will go longer, which is conducive to everyone to do value investment, and slowly screen some good companies or good funds that have been killed by mistake.

Yang Delong (Chief Economist of Qianhai Open Source Fund): What is the impact of the Bank of Japan's interest rate hike on the global capital market to bid farewell to the era of negative interest rates?

The Bank of Japan's monetary policy decision, which has attracted much attention in the market, has finally landed, with the Bank of Japan raising interest rates for the first time in 17 years, and announcing the withdrawal of negative interest rates and the cancellation of the YCC policy. On 19 March, the Bank of Japan voted 7:2 to end negative interest rates, raise its benchmark interest rate from -0.1% to 0-0.1%, and remove yield curve control, known as the YCC policy.

At the same time, the Bank of Japan also announced that it will cancel the purchase of ETFs and REITS, but will continue to buy Japanese government bonds, which is basically the same as before, and in terms of inflation, the Bank of Japan expects inflation to exceed 2% in fiscal 2024. After the decision was announced, the dollar continued to rise against the yen to approach the 150 mark, and the yield on 10-year Japanese bonds rose slightly. In the past, Japan's "spring fight" brought about a wage rise, and "spring fight" is a national labor negotiation held in Japan every spring, which has a guiding role in Japan's annual wage increase. The outcome of the 2024 "spring fight" will affect the sustainability of Japan's reflation, as well as the central bank's monetary policy.

On March 15, Japan's largest trade union federation announced preliminary results of the "Spring Fight" campaign, with the average wage of union members rising by 5.3 percent, the largest increase since 1991 and up from 3.8 percent last year. A large increase in wages in the "spring fight" could push inflation even higher, which has accelerated the pace of the Bank of Japan's exit from the era of negative interest rates.

The Bank of Japan's announcement of interest rate hikes has also had a certain impact on the global capital market, and the recent high retreat in the Japanese stock market is related to the market's expectation that the Bank of Japan will raise interest rates, and Japan's interest rate hike may also delay the pace of the Fed's interest rate cuts, so that the date of the Fed's monetary policy pivot will be delayed. The yen has continued to appreciate recently, and if the Bank of Japan raises interest rates in the future, it will further boost the trend of the yen, which will inevitably weaken the competitiveness of Japanese exports. The U.S. dollar index may fluctuate to some extent and will not have much impact on the A-share market.

Monetary and economic policy

Liao Qun (Chief Economist, Sino Group): Housing standards should also be upgraded to activate the demand for housing replacement as soon as possible

On March 12, the executive meeting of the State Council discussed and approved the "Work Plan for Promoting High-quality Economic Development with Standard Upgrading", followed by the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in" on the 13th. The two pieces of information are closely related, and both aim to promote the upgrading of industrial standards in the mainland economy, and the former can be considered as principles and plans, while the latter is implementation and action.

The mainland has entered a stage of high-quality development, but it seems that there is no clarity or consensus on what the connotation of high-quality development is. In a certain sense, high-quality development is to establish a modern industrial system through scientific and technological innovation. When it comes to the modern industrial system, people naturally think of emerging industries, especially the rise of the eight strategic emerging industries. Of course, this is true, without the rise of emerging industries with modern standards, there will be no modern industrial system. It should be said that it is not enough, and there should also be a standard upgrade of traditional industries or existing industries in the direction of modernization. The real estate industry, especially residential housing, should also be upgraded to standards.

From the perspective of promoting the modernization of the living standards of the people on the mainland, it is natural for housing standards to be upgraded, and it is of great significance to activate the demand of urban residents for housing replacement as soon as possible. We should not watch the mainland's economy enter the ranks of developed economies in about 10 years, and all aspects of industry, consumption, and people's livelihood will meet or approach the standards of modernization, and only the 400 million urban residents, who account for more than 40 percent, will still live in housing whose quality is far from the standard of modernization?

The renovation of "urban villages" is a typical upgrade of housing standards, but the scale involved is not large enough on a national scale. It is not only those who live in "urban villages" that should be activated, but also the demand for housing replacement for the 400 million urban residents who still live in non-commercial housing. It should be synchronized with the upgrading of standards in other industries to form a nationwide upsurge of urban residents changing houses and upgrading housing standards.

From the perspective of promoting economic development and modernization, it is also of great significance to activate the demand of urban residents for housing exchange, whether it is for short-term stable growth or medium- and long-term development momentum. Market research shows that if both upstream and downstream industries are taken into account, coupled with the "wealth effect" on residents' consumption, the impact of the mainland's real estate industry on GDP is more than 30%.

Last year, the mainland's economy grew by 5.2 percent, but the average growth rate of 4.1 percent last year and this year was 4.1 percent, which is lower than the current potential growth rate of the mainland economy, and one of the main reasons is that real estate development investment and the sales area of newly built commercial housing fell by 9.6 percent and 8.5 percent respectively. It will be more difficult to achieve the 5% economic growth target from last year's normal base this year than last year, and it will largely depend on whether the real estate market can stabilize. Obviously, activating the demand for housing replacement from 400 million urban residents as soon as possible will promote the real estate market to stabilize as soon as possible. When the real estate market stabilizes, more than 30 percent of economic activity will recover, and economic growth will accelerate; otherwise, this part of economic activity will continue to be sluggish or even further downward, which will greatly drag down the realization of this year's economic growth target.

In the medium and long term, the mainland's economy needs to develop with high quality and medium-high speed, and as mentioned above, it depends on the rise of emerging industries as well as the upgrading of traditional industries. For a large country like the mainland, which has a population of 1.41 billion and is still in the developing stage, the proportion of emerging industries in the entire economy is not large enough, and the eight strategic emerging industries account for about 15% of GDP. Real estate can be said to be the traditional industry with the greatest impact on the economy, and the activation of the demand for housing replacement by 400 million urban residents will undoubtedly continue for many years, and the real estate market will gain strong and lasting development momentum, which is of great significance for the medium- and long-term high-quality development and medium-to-high-speed growth of the mainland economy.

Zhong Zhengsheng (Chief Economist of Ping An Securities): Say goodbye to negative interest rates, where to go?

On March 19, 2024, the Bank of Japan announced its latest interest rate decision, announcing the official withdrawal of negative interest rates and yield curve control (YCC) policies. On the same day, the market trading was "loose", the dollar rose above the 150 mark against the yen, the 10-year Japanese bond interest rate fell, and the Nikkei 225 index closed up 0.66%, back to the 40,000 mark.

Where will the Bank of Japan go further? The Bank of Japan may not be in a hurry to withdraw from the "zero interest rate." On the one hand, exiting negative interest rates is a key step in the normalization of Japan's monetary policy, but raising interest rates on the basis of zero interest rates is a routine policy and relatively less urgent. On the other hand, due to base reasons, Japan's CPI is likely to remain above 2% year-on-year in the first quarter, creating a good window for the BOJ to pivot. However, the recent economic data is not solid, and it remains to be seen whether inflation in Japan can really stabilize around 2%.

The BOJ is cautious about continuing to raise interest rates, which may weaken market volatility.

Japanese bonds: Prior to the abolition of the YCC, the pricing power of Japanese bonds had largely returned to the market, mainly due to the overseas liquidity environment and BOJ's bond purchases. A single interest rate hike may not be enough to trigger a large return of funds to Japan and severely impact the global bond market such as the United States.

JPY: On the one hand, the exit from negative interest rates will not affect the yen's status as a financing currency for the time being. On the other hand, if the BOJ turns more cautious, the yen exchange rate may depend more on the direction of US interest rates. In addition, the yen is not appreciating quickly, which may also be what the BOJ wants to see.

Japanese stocks: First, if the yen does not appreciate significantly, the impact on Japanese stocks will be limited. Second, in the face of higher equity returns, the limited upside in Japanese deposit rates and bond rates may not be enough to discourage investors from abandoning Japanese stocks. Finally, the fundamental drivers of Japanese stocks come from fundamentals and valuation policies, which have not changed as a result of the BOJ's pivot.

News hotspots of the week 20240318-0323

Real estate news at a glance

National Bureau of Statistics: Real estate development investment fell 9% year-on-year from January to February According to the National Bureau of Statistics, from January to February, the national real estate development investment was 1,184.2 billion yuan, down 9.0% year-on-year, of which residential investment was 882.3 billion yuan, down 9.7%. From January to February, the sales area of newly built commercial buildings was 113.69 million square meters, a year-on-year decrease of 20.5%, of which the sales area of residential buildings decreased by 24.8%. The sales of newly built commercial buildings were 1,056.6 billion yuan, down by 29.3 percent, of which residential sales fell by 32.7 percent. From January to February, the funds in place for real estate development enterprises were 1,619.3 billion yuan, a year-on-year decrease of 24.1%. Among them, domestic loans were 314.4 billion yuan, down by 10.3 percent, foreign capital was 500 million yuan, up by 7.4 percent, self-raised funds were 537.4 billion yuan, down by 15.2 percent, deposits and advance receipts were 463 billion yuan, down by 34.8 percent, and personal mortgage loans were 221.4 billion yuan, down by 36.6 percent.

Ministry of Finance: Real estate tax from January to February was 67.8 billion yuan, a year-on-year increase of 21.5% According to the data released on the website of the Ministry of Finance on March 21, the Ministry of Finance released the fiscal revenue and expenditure from January to February 2024, among the land and real estate-related taxes, the deed tax was 93.3 billion yuan, a year-on-year increase of 6.6%, the real estate tax was 67.8 billion yuan, a year-on-year increase of 21.5%, the urban land use tax was 32.9 billion yuan, a year-on-year increase of 10.9%, and the land value-added tax was 112.6 billion yuan, a year-on-year increase of 7.2%; The cultivated land occupation tax was 22.7 billion yuan, a year-on-year increase of 33.2 percent.

Hainan: Non-provincial household registration and talent commercial loans to buy houses implement local policies According to Hainan Daily client news, on March 18, the self-discipline mechanism of market interest rate pricing in Hainan Province issued an announcement to adjust the differentiated housing credit policy. public

According to the report, combined with the situation of the real estate market in Hainan and after research, the self-discipline mechanism of market interest rate pricing in Hainan Province has determined: from March 19, residents who meet the conditions of the local housing purchase policy (including household registration in this province, non-household registration in this province and talents) will take out loans to purchase commercial housing, and the minimum down payment ratio of housing commercial personal housing loans and the lower limit of housing loan interest rates shall be implemented in accordance with the local personal housing credit policy standards.

Yantai: The maximum amount of personal housing loans for housing provident fund was raised to 800,000 yuan On March 20, Yantai Housing Provident Fund Management Center issued the "Notice on Optimizing and Adjusting Relevant Policies of Housing Provident Fund". The "Notice" proposes to adjust the maximum amount of personal housing loans from the housing provident fund from the original 600,000 yuan to 800,000 yuan. At the same time, for two-child and three-child families that meet the national birth policy, the maximum amount of personal housing loans from the housing provident fund will be adjusted to 1 million yuan. In addition, the new policy also adjusts the loan policy for flexible employees. The original requirement to pay the housing provident fund for more than 24 months (inclusive) is now adjusted to only 6 months (inclusive).

Guangzhou's property market is loosened again, and Guangzhou plans to optimize the pre-sale approval of commercial housing According to China Real Estate News, in just two days, Guangzhou has issued two documents to continue to loosen the real estate market. On March 20, the "Several Measures of Guangzhou Huangpu District and Guangzhou Development District on Further Optimizing and Improving the Approval and Implementation Mechanism of Urban Village Reconstruction Projects" (hereinafter referred to as the "Measures") was released, adjusting the regulations on project approval, capital supervision, and enterprise introduction, such as reducing the campaign deposit from no less than 100 million yuan to no less than 50 million yuan. The day before, the Office of the Leading Group for the Pilot Reform of the Examination and Approval System for Engineering Construction Projects in Guangzhou revealed that part of the content of the "Implementation Plan for the Optimization of the Approval of Commodity Housing Overview and Pre-sale Permits in Guangzhou (Trial)" has been revised, including the deletion of the statement that "the minimum declaration scale of the pre-sale application for commercial housing should be an independent building, and the pre-sale permit shall not be handled in layers and units".

Fund News at a Glance

According to the AMAC website, as of the end of February 2024, there were 146 fund management companies in mainland China, including 49 foreign-invested fund management companies (including Sino-foreign joint ventures and wholly foreign-owned funds), 97 domestic fund management companies, 12 securities companies or asset management subsidiaries of securities companies and 1 insurance asset management company that have obtained public fund management qualifications. The total net asset value of the public funds managed by the above institutions is 29.30 trillion yuan

The scale of new fund issuance exceeded 100 billion yuan in March According to the Shanghai Securities News, on March 20, 18 funds issued an announcement on the effective date of fund contracts, and the total scale of the above new funds raised exceeded 15 billion yuan. This also made the total scale of new fund issuance in March exceed 100 billion yuan. This is also the first time this year that the monthly fund issuance scale has exceeded 100 billion yuan. Specifically, according to Choice statistics, as of March 20, the issuance scale of new funds in March was 105.515 billion yuan, of which the issuance scale of bond funds was 77.121 billion yuan, and the issuance scale of many bond funds exceeded 6 billion yuan. In addition, the issuance of partial stock funds has also picked up, with an issuance scale of 26.1 billion yuan, a new monthly high since the beginning of this year.

Bank wealth management and public funds "fly like wings" The scale of the monthly increase was 0.69 trillion yuan and 1.94 trillion yuan respectively According to the Securities Times, recently, the asset management market, including bank wealth management and public funds, has rebounded significantly. According to the data summary obtained by the reporter from relevant channels recently, 11 wealth management companies, including the six major state-owned bank wealth management companies and CMB Wealth Management, IB Wealth Management, CNCBI Wealth Management, Everbright Wealth Management and SPDB Wealth Management, increased their management scale by about 690 billion yuan in February, an increase of more than 490 billion yuan from the beginning of the year. The size of mutual funds is also growing substantially. According to data disclosed by the Asset Management Association of China on March 18, the net asset value of public funds managed by 146 fund companies increased by nearly 2 trillion yuan in a single month at the end of February.

The leading effect of 10 CSI A50 ETFs continues to strengthen According to China Securities News, on March 18, after JPMorgan CSI A50 ETF and Ping An CSI A50 ETF, the remaining 8 of the first batch of 10 CSI A50 ETFs were collectively listed. So far, the first batch of CSI A50 ETFs has been "assembled" and staged a "competition on the same stage" in the secondary market. Wind data shows that as of the close of trading on March 18, the cumulative turnover of the eight CSI A50 ETFs listed on that day exceeded 6 billion yuan. Since February, the CSI A50 index has risen considerably, and as of March 18, the index has risen by more than 11%. Relevant public offering institutions said that the low interest rate environment may be an important factor in the rise of core assets, the market has entered a potential upward channel, and industry leaders with profit advantages are expected to take the lead in opening valuation repair and stabilizing rebound in the upward stage of the economy.

21 public funds have a yield of more than 10% in the month Securities Daily news, data shows that as of March 21, there are 21 public funds with a yield of more than 10% this month, from the perspective of the theme, including gold, non-ferrous metals and communication equipment. In the view of many institutions, the macro and supply sides are the main reasons for the higher prices of related assets, taking gold assets as an example, there are still good investment opportunities in the short and medium term. Specifically, among the above 21 public funds, the highest yield is 14.26%. Among the top 10 products in terms of yield, 4 gold-themed funds ranked high in terms of yield, 3 communication equipment themed products ranked second, and 3 non-ferrous metal-themed products followed.

Economic news at a glance

Xi Jinping presided over a symposium on promoting the rise of the central region in the new era, emphasizing that Xi Jinping, general secretary of the CPC Central Committee, president of the state and chairman of the Central Military Commission, presided over a symposium on promoting the rise of the central region in the new era in Changsha City, Hunan Province on the afternoon of the 20th and delivered an important speech. Xi Jinping pointed out that it is necessary to strengthen the connection with other major development strategies to better integrate into and support the new development pattern. Strengthen the in-depth connection with the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area, and strengthen the integration and linkage with the development of the Yangtze River Economic Belt, the ecological protection and high-quality development of the Yellow River Basin. Undertake the gradient transfer of industries in an orderly manner and optimize the industrial layout. Strengthen the construction of a modern transportation infrastructure system and strengthen the pattern of large corridors in the central region. Establish and improve the inter-provincial cooperation mechanism within the region to enhance the level of regional coordinated development. Vigorously promote the development of urban agglomerations in the middle reaches of the Yangtze River and the Central Plains, strengthen the coordination and linkage between metropolitan areas, and better radiate and drive the development of surrounding areas. Xi Jinping stressed that it is necessary to coordinate the promotion of in-depth reform and high-level opening-up, and continue to build a more competitive inland open highland. Deepen the market-oriented reform of factors, improve the basic system of the market economy, comprehensively clean up and correct local protection behaviors, promote the rational flow and optimal allocation of various factors of productive forces across regions, and better participate in the construction of a unified national market. We will steadily expand institutional opening-up, deeply integrate into the Belt and Road Initiative, actively connect with the New Eurasian Land Bridge and the New Western Land-Sea Corridor, build high-standard pilot free trade zones, and create more high-level platforms for opening up and cooperation, so as to play a greater role in connecting domestic and international dual circulation. Strengthen the construction of a market-oriented, law-based, and international business environment, and enhance the attractiveness of domestic and foreign factor resources. Adhere to the "two unswerving", support state-owned enterprises to become stronger, better and bigger, and further optimize the development environment of private enterprises.

National Development and Reform Commission: Take pragmatic measures to attract foreign investment The Information Office of the State Council held a regular briefing on the policy of the State Council on the 20th, and Wu Hao, Secretary-General of the National Development and Reform Commission, introduced the "Action Plan for Solidly Promoting High-level Opening Up and Attracting and Utilizing Foreign Investment". Wu Hao, secretary-general of the National Development and Reform Commission, said that the "Action Plan" will take pragmatic measures to attract foreign investment from the aspects of expanding market access, smoothing the flow of innovative elements, and docking with international high-standard economic and trade rules. First, we need to further broaden the space for foreign investment. The Action Plan proposes to expand market access and raise the level of foreign investment liberalization. A new version of the negative list for foreign investment access has been introduced, restrictions on foreign investment access will continue to be reduced, and pilot projects will be carried out in areas such as medical care and value-added telecommunications, which are of great concern to foreign-funded enterprises. At the same time, more qualified foreign-funded institutions will be supported to carry out business in the fields of banking and insurance, bond funds and other fields. Second, we need to further optimize the business environment. The Action Plan proposes to optimize the level playing field and provide services to foreign-invested enterprises. Promote the implementation and effectiveness of relevant policies, issue rules for fair competition review in the field of bidding and bidding, and strive to eliminate problems such as local protection and ownership discrimination; At the same time, the "Action Plan" also proposes to improve the scientific level of administrative law enforcement and promptly correct non-standard administrative law enforcement behaviors. Third, we need to further improve the facilitation of cross-border flow of factors. The Action Plan proposes to smooth the flow of innovation elements and promote innovation cooperation between domestic and foreign enterprises. In terms of business personnel exchanges, the Action Plan clearly states that for the management and technical personnel of foreign-funded enterprises, as well as their accompanying spouses and minor children, the validity period of visas will be relaxed to 2 years, and will facilitate the work, residence and permanent residence of foreign talents in China. In terms of data flow, the Action Plan will promote the safe and orderly cross-border transmission of data on R&D, production and sales by foreign-funded enterprises, and will formulate data transfer standards in the Guangdong-Hong Kong-Macao Greater Bay Area to achieve convenient data flow within the Greater Bay Area.

Ministry of Finance: The national general public budget revenue in the first two months was 4,458.5 billion yuan According to the Economic Daily, on March 21, the Ministry of Finance released statistics showing that from January to February, the national general public budget revenue was 4,458.5 billion yuan, a year-on-year decrease of 2.3%. From January to February, the revenue of the central general public budget was 2,070.1 billion yuan, down 4.8 percent year-on-year, and the revenue of the local general public budget at the same level was 2,388.4 billion yuan, the same as that of the same period last year. In terms of expenditure, from January to February, the national general public budget expenditure was 4,362.4 billion yuan, a year-on-year increase of 6.7 percent. In terms of central and local expenditures, the central general public budget expenditure at the same level was 482.8 billion yuan, up 14 percent year-on-year, and the local general public budget expenditure was 3,879.6 billion yuan, up 5.8 percent year-on-year.

People's Bank of China Deputy Governor Xuan Changneng: Monetary Policy Has Sufficient Policy Space and Statutory Reserve Ratio Still Has Room to Decline On March 21, People's Bank of China Deputy Governor Xuan Changneng said at a press conference held by the Information Office of the State Council that the mainland's monetary policy has sufficient policy space and rich tool reserves, and the statutory reserve ratio still has room to fall. The decline in the cost of deposits and the shift in monetary policy of major economies are conducive to broadening the autonomy of interest rate policy operation, and the establishment of scientific and technological innovation and technological transformation refinancing will help accelerate the development of high-end manufacturing and digital economy. Xuan Changneng said that in the next stage, the prudent monetary policy will continue to be flexible, moderate, accurate and effective, reasonably grasp the relationship between the two largest financing markets of bonds and credit, maintain reasonable and abundant liquidity, promote the steady decline of corporate financing and household credit costs, continue to do a good job in the "five major articles", increase efforts to revitalize the stock of financial resources, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, and balance the relationship between short-term and long-term, steady growth and risk prevention, internal equilibrium and external equilibrium.

Liao Min, Vice Minister of Finance: Guide government financing guarantee institutions to increase the inclination of labor-intensive enterprises this year On March 21, the Information Office of the State Council held a press conference, at which Vice Minister of Finance Liao Min said that the Ministry of Finance will give loan interest discounts to eligible key groups and small and micro enterprises that absorb their employment this year. To guide government financing guarantee institutions to increase the inclination of labor-intensive enterprises this year, we estimate that in 2024, through the arrangement of financial government financing guarantees, about 1.3 trillion yuan of new loans can be leveraged, more than 12 million jobs will be stabilized, and more than 600,000 new jobs will be created.

In order to further optimize and improve the management and supervision of syndicated loan business and promote the standardized and healthy development of syndicated loan business, the State Administration of Financial Supervision and Administration has revised the Guidelines for Syndicated Loan Business (hereinafter referred to as the "Guidelines") and formed the Administrative Measures for Syndicated Loan Business (Draft for Comments) (hereinafter referred to as the "Measures"), which are now officially open to the public for comments. Since the issuance of the Guidelines by the former China Banking Regulatory Commission (CBRC) in 2011, the syndicated loan business has developed steadily and has become an important way to provide financial services to the real economy, support large customers and project financing. However, with the changes in the market environment, the Guidelines can no longer fully meet the needs of the current development of syndicated loan business, and the State Administration of Financial Supervision and Administration has made targeted revisions to the Guidelines on the basis of considering the actual domestic situation and learning from mature international experience. The Measures continue the overall structure of the Guidelines, which are divided into eight chapters and 62 articles, including general provisions, syndicate members, initiation and organization of syndicated loans, syndicated loan contracts, syndicated loan management, syndicated loan transfer transactions, supervision and management, and supplementary provisions. Compared with the current Guidelines, the Measures further clarify the regulatory orientation, enrich the syndicate formation model, optimize the distribution ratio and secondary market transfer rules, standardize the fees for syndicated loans, and put forward more systematic requirements for the management of syndicated loans. The revision of the Guidelines is an important measure to improve the management of commercial banks' loan business, which embodies the principles of problem-oriented, integrity and innovation, and overall consideration, and can effectively promote commercial banks to strengthen interbank cooperation and effectively prevent and resolve credit risks while providing high-quality financial supply for economic and social development. In the next step, the State Administration of Financial Supervision and Administration will further revise and improve the Measures based on feedback from all sectors of society, and release and implement them in due course.

National Development and Reform Commission: Appropriately expand the scope of investment areas and capital of local government special bonds According to the surging news, on March 21, the State Council Information Office held a press conference, Liu Sushe, deputy director of the National Development and Reform Commission, said that improving the efficiency of government investment and giving full play to the leading role of government investment is the key to this year's investment work.

Ministry of Finance: 1-2 months of stamp duty on securities transactions of 15 billion yuan, down 46.8% year-on-year On March 21, the Ministry of Finance released data showing that from January to February, the national general public budget revenue was 4,458.5 billion yuan, down 2.3% year-on-year, deducting the impact of special factors such as the tax deferrals and warehousing of small, medium and micro enterprises in the same period last year, and the reduction of some tax reduction policies introduced in the middle of last year. From January to February, the national tax revenue was 3,782 billion yuan, down 4 percent year-on-year, and the non-tax revenue was 676.5 billion yuan, up 8.6 percent year-on-year. stamp duty was 72.6 billion yuan, down 7.1% year-on-year. Among them, the stamp duty on securities transactions was 15 billion yuan, a year-on-year decrease of 46.8%.

National Bureau of Statistics: The total retail sales of consumer goods increased by 5.5% year-on-year from January to February On March 18, at the press conference on the operation of the national economy from January to February 2024 held by the Information Office of the State Council, Liu Aihua, spokesperson, chief economist and director of the Department of Comprehensive Statistics of the National Economy, said that from January to February, the total retail sales of consumer goods were 8,130.7 billion yuan, a year-on-year increase of 5.5%, and from a month-on-month perspective, the total retail sales of consumer goods in February increased by 0.03% over the previous month.

National Bureau of Statistics: From January to February, the added value of industrial enterprises above designated size increased by 7.0% year-on-year On March 18, at the press conference on the operation of the national economy from January to February 2024 held by the Information Office of the State Council, Liu Aihua, spokesperson, chief economist and director of the Department of Comprehensive Statistics of the National Economy, said that from January to February, the added value of industrial enterprises above designated size increased by 7.0% year-on-year, 0.2 percentage points faster than that in December last year. On a month-on-month basis, in February, the added value of industrial enterprises above designated size increased by 0.56% over the previous month.

The total assets of financial institutions at the end of 2023 were 461.09 trillion yuan According to the People's Bank of China, preliminary statistics, at the end of 2023, the total assets of financial institutions in the mainland were 461.09 trillion yuan, a year-on-year increase of 9.9%, of which the total assets of banking institutions were 417.29 trillion yuan, a year-on-year increase of 10%; the total assets of securities institutions were 13.84 trillion yuan, a year-on-year increase of 5.6%; and the total assets of insurance institutions were 29.96 trillion yuan, a year-on-year increase of 10.4%. The liabilities of financial institutions were 420.78 trillion yuan, up 10.1 percent year-on-year, of which the liabilities of banking institutions were 383.12 trillion yuan, up 10.1 percent year-on-year, the liabilities of securities institutions were 10.43 trillion yuan, up 5.5 percent year-on-year, and the liabilities of insurance institutions were 27.22 trillion yuan, up 11.4 percent year-on-year.

The General Office of the State Council issued the Action Plan for Solidly Promoting High-level Opening-up and Greater Efforts to Attract and Utilize Foreign Investment The General Office of the State Council issued the Action Plan for Solidly Promoting High-level Opening-up and Greater Efforts to Attract and Utilize Foreign Investment, proposing 24 measures in five aspects. The first is to expand market access and raise the level of liberalization of foreign investment. Reasonably shorten the negative list for foreign investment access, carry out pilot projects to relax foreign investment access in the field of scientific and technological innovation, expand the access of foreign financial institutions in the banking and insurance fields, expand the business scope of foreign financial institutions to participate in the domestic bond market, and further implement the pilot project for domestic investment by qualified foreign limited partners. The second is to intensify policies to enhance the attractiveness of foreign investment. Expand the catalogue of industries encouraged for foreign investment and the list of foreign-funded projects, implement tax support policies, increase financial support, strengthen energy use guarantees, and support the central and western regions and northeast regions to undertake industrial transfer. The third is to optimize the fair competition environment and do a good job in providing services for foreign-invested enterprises. Fourth, smooth the flow of innovation elements and promote innovation cooperation between domestic and foreign-funded enterprises. Fifth, we need to improve domestic regulations and better align ourselves with international high-standard economic and trade rules.

The People's Bank of China authorized the National Interbank Lending Center to announce that the loan market quotation rate (LPR) on March 20, 2024 will be 3.45% for 1-year LPR and 3.95% for LPR over 5 years. The above LPR is valid until the next LPR is issued.

Recently, "Qiushi" magazine published an article signed by Lan Foan, Secretary of the Party Leadership Group and Minister of the Ministry of Finance, "Strengthen Confidence, Work Hard, and Implement a Positive Fiscal Policy", the article said that the financial sector should resolutely implement the spirit of the Central Economic Work Conference and the National People's Congress and the National People's Congress and the National People's Congress and the National People's Congress and the National People's Congress and the National In terms of "moderate strengthening", the main thing is to strengthen the overall planning of financial resources, and combine the use of policy tools such as deficits, special bonds, ultra-long-term special treasury bonds, preferential taxes and fees, and fiscal subsidies, so as to maintain an appropriate scale of expenditure. In terms of "improving quality and efficiency", the main thing is to promote the legalization, scientificization and standardization of financial management, spend the same money to achieve greater results, and amplify the effect of policy combination.

In 2023, 135,000 taxpayers suspected of violating the law will be investigated and punished in accordance with the law, and 181 billion yuan of tax losses will be recovered On March 18, the Supreme People's Court and the Supreme People's Procuratorate jointly issued the "Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Tax Collection and Management" The reporter learned from the press conference that the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, the State Administration of Taxation and other departments will focus on key areas, key industries, key personnel, and key regions, and severely crack down on tax-related violations in accordance with the law, especially precise crackdowns" "Fake Enterprise", "Fake Export", "Fake Declaration". In 2023, the tax department will investigate and punish a total of 135,000 taxpayers suspected of violating the law in accordance with the law, and recover 181 billion yuan in tax losses. In response to the crime of defrauding export tax rebates, which is the most egregious tax-related crime, in 2023, multiple departments will jointly deploy a special operation to inspect 2,599 export enterprises and recover 16.6 billion yuan of export tax rebate losses.

Beijing Municipal Development and Reform Commission: The next step will focus on supporting the development of green finance in Beijing's urban sub-center The surging news, on March 18, a special press conference on the construction of a national green development demonstration zone in Beijing's urban sub-center was held in Beijing. Zhou Hao, a member of the Party Leadership Group of the Beijing Municipal Development and Reform Commission and deputy director of the Beijing-Tianjin-Hebei Coordination Office, said that at present, a series of policies and measures are being studied and formulated to promote the development of Beijing's green economy and promote the high-quality development of the environmental social governance (ESG) system. In the next step, we will focus on supporting the development of green industries such as green finance and professional services in Beijing's urban sub-center. At the same time, it will also promote the Beijing sub-center to carry out ESG innovation and development pilots, and explore the establishment of an ESG investment and financing system. Continue to promote the integrated development of green industries in Tongzhou District and the three northern counties.

National Bureau of Statistics: The average surveyed unemployment rate in urban areas in January and February was 5.3% From January to February, the average surveyed unemployment rate in urban areas was 5.3%. In February, the surveyed urban unemployment rate was 5.3 percent, up 0.1 percentage points from the previous month and down 0.3 percentage points from the same month last year. The surveyed unemployment rate of the local registered labor force was 5.5 percent, and the surveyed unemployment rate of the non-resident labor force was 4.8 percent, of which the surveyed unemployment rate of the non-resident agricultural household registration labor force was 4.8 percent. The surveyed unemployment rate in 31 large cities and towns was 5.1 percent. The average weekly working hours of employees in enterprises nationwide are 48.0 hours.

In order to implement the decisions and arrangements of the CPC Central Committee and the State Council, the People's Bank of China recently held a forum in Shanghai on "Strengthening the Construction of the Kaki Market and Improving the Kaki Ecology". The meeting emphasized that all commercial banks and bank card organizations should unify their thinking and fully realize that strengthening the construction of the card base market is an important measure to implement the decisions and deployments of the Party Central Committee and the State Council, which is conducive to promoting the high-quality development of the bank card industry and building a diversified and multi-level payment service system. The meeting required that all parties in the bank card industry should take the initiative to take action, refine work measures, focus on key cities and key places, increase resource investment, and improve the bank card acceptance environment. Deepen the supply-side structural reform of card issuance, acquiring, transfer and clearing, strengthen the synergy of the bank card industry, integrate resources from all parties, and jointly build a sustainable business model. Coordinate risk prevention and control and service optimization, and promote the standardized development of the bank card market.

The State Administration of Financial Supervision issued the "Measures for the Supervision and Rating of Life Insurance Companies" The State Administration of Financial Supervision recently issued the "Measures for the Supervision and Rating of Life Insurance Companies". The "Rating Measures" mainly have the following contents: First, establish a comprehensive risk assessment system, and determine the company's comprehensive risk level from six dimensions: corporate governance, business operation, capital utilization, asset and liability management, solvency, and others. The second is to improve the ability of risk identification and early warning, based on quantitative analysis, combined with all kinds of information mastered by off-site supervision, to effectively identify and warn institutional risks, and realize the forward movement of risk gates. The third is to scientifically assess the risk level, quantify the risk level according to the degree of importance, and divide the comprehensive risk level into 1-5 levels, the higher the value, the higher the risk, and the company in the state of restructuring and takeover is directly listed as S level. At the same time, a dynamic adjustment mechanism is introduced to set the comprehensive risk level to be raised by one level and directly identified as level 5.

The State Administration of Financial Supervision and Administration revised and issued the Administrative Measures for Consumer Financial Companies The State Administration of Financial Supervision revised and issued the Administrative Measures for Consumer Financial Companies, which came into force on April 18. The Measures consist of 10 chapters and 79 articles. The main revisions are as follows: First, improve the access standards. Raise the standards of assets, operating income and other indicators of major investors, as well as the minimum shareholding ratio requirements, strengthen the shareholder responsibilities of major investors, increase the shareholding ratio of investors with experience in consumer finance business management and risk control, and promote them to better play their professional and risk control roles, and raise the minimum registered capital requirements of consumer finance companies to enhance their risk resistance. The second is to strengthen the supervision of business classification. Distinguish between basic business and special business scope, cancel non-main business and non-essential business, and strictly supervise business at different levels. Appropriately broaden financing channels and enhance shareholders' liquidity support capabilities. The third is to strengthen the supervision of corporate governance. Fully implement the regulatory regulations and institutional requirements on corporate governance, shareholder equity, related party transactions and information disclosure issued in recent years, and clarify the regulatory requirements for party building, "three committees and one layer", shareholder obligations, remuneration management, related party transactions and information disclosure in combination with the organizational form and equity structure of consumer finance companies. Fourth, strengthen risk management. Clarify regulatory requirements for consumer finance companies in areas such as credit risk, liquidity risk, operational risk, information technology risk, and reputational risk management, optimize and add some regulatory indicators, and improve market exit mechanisms. Fifth, strengthen the protection of consumer rights and interests. Adhere to the people-centered approach, consolidate the main responsibility of consumer finance companies for consumer protection, improve and improve various mechanisms for consumer protection work, strengthen the standardized management of cooperative institutions, and effectively protect the legitimate rights and interests of consumers.

Recently, the State Intellectual Property Office, the Ministry of Industry and Information Technology, the People's Bank of China, the State Administration of Financial Supervision and Administration, and the China Securities Regulatory Commission jointly issued a notice to decide to implement the plan for promoting the growth of small and medium-sized enterprises through patent industrialization, and issued the "Implementation Plan for the Plan for Promoting the Growth of Small and Medium-sized Enterprises through Patent Industrialization". By the end of 2025, the intellectual property awareness and patent transformation and application ability of small and medium-sized enterprises will be generally improved, and a number of model enterprises with patent industrialization as the growth path will be cultivated, from which a number of specialized, special and new "little giant" enterprises and single champion enterprises will be created, and new advantages in intellectual property competition in key industries will be accelerated, and a number of qualified enterprises will be successfully listed. Form a number of patent-intensive products with market competitiveness, and vigorously promote the rapid development of patent-intensive industries.

Li Qiang signed an order of the State Council to promulgate the "Regulations on the Implementation of the Law of the People's Republic of China on the Protection of Consumer Rights and Interests" Premier Li Qiang of the State Council recently signed an order of the State Council to promulgate the "Regulations on the Implementation of the Law of the People's Republic of China on the Protection of Consumer Rights and Interests" (hereinafter referred to as the "Regulations"), which will come into force on July 1, 2024. The "Regulations" have a total of 7 chapters and 53 articles, which mainly stipulate the following: First, refine and supplement the relevant provisions on the obligations of operators. The Consumer Rights and Interests Protection Law stipulates that the obligations of protecting the personal and property safety of consumers, handling defective products, prohibiting false advertising, clearly marking prices, using standard terms, fulfilling quality guarantee responsibilities, and protecting consumers' personal information are provided in detail. The provisions on the obligations of business operators on the protection of the rights and interests of consumers of the elderly and minors have been supplemented. The second is to improve the relevant regulations on online consumption. It stipulates that business operators must not use technical means to compel or covertly compel consumers to purchase goods or receive services. Business operators must not, without the knowledge of consumers, set different prices or charging standards for the same goods or services under the same transaction conditions. Where proprietors employ methods such as automatic extension or automatic renewal to provide services, they shall draw consumers' attention in a conspicuous manner. Livestream marketing platform operators shall establish and complete systems for the protection of consumer rights and interests. The third is to strengthen the obligations of prepaid consumer operators. It stipulates that business operators shall provide goods or services in accordance with the agreement with consumers, and must not reduce the quality of goods or services, and must not arbitrarily increase prices. Where goods or services are not provided in accordance with the agreement, the agreement shall be performed or the advance payment shall be refunded in accordance with the consumer's requirements. Where business operators decide to suspend business or relocate service venues, they shall inform consumers in advance that they will continue to perform their obligations or refund the balance of the advance payment that has not been consumed. Fourth, standardize consumer claims. It stipulates that complaints and reports shall comply with laws, regulations, and relevant provisions, and must not be used to seek improper benefits, infringe upon the lawful rights and interests of business operators, or disrupt the order of the market economy. Where there are defects in the labels, instructions, promotional materials, and so forth of goods or services that do not affect the quality of the goods or services and do not mislead consumers, the provisions on punitive damages do not apply. Those who fraudulently obtain compensation or extort business operators through methods such as entrainment, package dropping, counterfeiting, tampering with the date of production of goods, or fabricating facts, are to be dealt with in accordance with law. Fifth, clarify the responsibilities of the government for the protection of consumer rights and interests.

On March 18, the Party Committee of the General Administration of Customs held the first study meeting of the Party Committee Theoretical Study Center Group in 2024, focusing on the spirit of General Secretary Xi Jinping's important speech at the National People's Congress and the National People's Congress, important expositions on promoting high-quality development, and the recent internal party regulations issued by the Central Committee. The meeting demanded that we vigorously implement the construction of smart customs and the action of "strengthening the country with smart customs", hold the 6th Global AEO Conference of the World Customs Organization, strengthen international exchanges and cooperation in customs, promote Chinese-style modernization with customs modernization, and contribute Chinese wisdom and Chinese solutions to the modernization of world customs. From the service of the people, the implementation of the "four grassroots" system, adhere to the "customs director to send the policy to the door" mechanism, do everything possible to solve practical problems for enterprises, and constantly enhance the people's sense of gain, happiness and security.

In the first two months, the mainland's foreign non-financial direct investment increased by 10% year-on-year On March 21, He Yadong, spokesman of the Ministry of Commerce, introduced the mainland's foreign investment cooperation from January to February this year at a regular press conference. From January to February 2024, the mainland's foreign non-financial direct investment was 149.64 billion yuan, a year-on-year increase of 10%. Among them, the non-financial direct investment of mainland enterprises in the "Belt and Road" countries was 33.18 billion yuan, a year-on-year increase of 0.6%.

The first meeting of the EU-China Financial Working Group was held in Beijing On March 18-19, 2024, the first meeting of the China-EU Financial Working Group was held in Beijing. The EU-China Financial Working Group is a cooperation mechanism established in accordance with the consensus of the leaders of the 10th China-EU High-level Economic and Trade Dialogue, with the aim of deepening China-EU exchanges in the financial sector and strengthening China-EU financial cooperation. The financial authorities of the two sides introduced the macroeconomic and financial stability situation and the financial regulatory framework between China and the EU, and discussed the business development and regulatory requirements of financial institutions, market access for banks, insurance and financial leasing institutions, anti-money laundering cooperation and other financial regulatory cooperation topics. The two sides also exchanged views on topics such as capital market construction, sustainable finance, cross-border data transmission and cross-border payment, and central counterparty equivalence certification.

China Association of Automobile Manufacturers: Commercial vehicle sales in the first two months were 575,000 units, a year-on-year increase of 14.1% According to data from the China Association of Automobile Manufacturers, commercial vehicle production and sales in February were 233,000 units and 251,000 units, down 28.9% and 22.6% month-on-month, respectively, and down 26.6% and 22.5% year-on-year, respectively. From January to February this year, commercial vehicle production and sales totaled 560,000 units and 575,000 units, up 9% and 14.1% y/y, respectively.

Shanghai's 100 billion funds to support the construction of new infrastructure The Shanghai Municipal Development and Reform Commission and other six departments issued the "Guiding Opinions on the Management of Interest Discounts for New Infrastructure Construction Projects in Shanghai (2024 Edition)", which will encourage cooperative banks to establish preferential interest rate credit funds for new infrastructure construction, with a total scale of more than 100 billion yuan, focusing on supporting network infrastructure (new network), computing infrastructure (new computing power), data infrastructure (new data), innovative infrastructure (new facilities), terminal infrastructure (new terminals) and other five areas. Compared with the 2020 version of the policy, the new policy has a lower loan interest rate, a larger interest discount, better declaration conditions, and more cooperative banks. Loans for new infrastructure projects are mainly medium and long-term loans of more than 5 years, and the effective interest rate after interest discount is 1.75%-2.25%, which can further reduce financing costs for enterprises. The investment threshold for project declaration has also been adjusted from 100 million yuan to 50 million yuan, and more high-quality projects can enjoy the discount policy.

Ministry of Natural Resources: The mainland's gross marine product will increase by 6% in 2023 CCTV News reporters learned from the Ministry of Natural Resources that in 2023, the country's gross marine production value will be 9,909.7 billion yuan, an increase of 6.0% over the previous year, and the growth rate will be 0.8 percentage points higher than the gross domestic product. In 2023, the country's marine GDP accounted for 7.9% of GDP, an increase of 0.1 percentage points over the previous year. From the perspective of the three industries, the added value of the primary marine industry was 462.2 billion yuan, the added value of the secondary industry was 3,550.6 billion yuan, and the added value of the tertiary industry was 5,896.8 billion yuan, accounting for 4.7 percent, 35.8 percent and 59.5 percent of the total marine production value respectively. In 2023, the marine manufacturing industry will increase by 7.0% compared to the previous year. Among them, the marine shipbuilding industry increased by 17.6% over the previous year.

In 2023, the overall economic scale of the national performance market will hit a record high In 2023, according to the data monitoring of the ticketing information collection platform of the China Performance Industry Association, combined with the comprehensive calculation of industry research, the overall economic scale of the national performance market in 2023 will be 73.994 billion yuan, a year-on-year increase of 29.30% compared with 2019, reaching a record high. According to the data, in 2023, there will be 440,600 performances nationwide (excluding performances in rural areas and entertainment venues), a year-on-year increase of 123.55% over 2019, box office revenue of 50.232 billion yuan, a year-on-year increase of 150.65% over 2019, and 171.1364 million performances, a year-on-year increase of 83.01% over 2019.

In February, China's game market achieved a revenue of 24.875 billion yuan, a year-on-year increase According to the Game Working Committee of the China Audio and Digital Association, in February 2024, China's game market achieved a revenue of 24.875 billion yuan, an increase of 2.17% month-on-month and a year-on-year increase of 15.12%. According to reports, in the field of segmentation, China's mobile game market performed well, with actual sales revenue reaching 18.255 billion yuan, an increase of 3.21% month-on-month, and a year-on-year increase of 17.88%. China's client game market also achieved actual sales revenue of 5.642 billion yuan, an increase of 0.75% month-on-month and 5.94% year-on-year. The actual sales revenue of China's self-developed games in the domestic market was 20.312 billion yuan, an increase of 1.45% month-on-month and 12.87% year-on-year.

The Federal Reserve kept interest rates unchanged and still hinted at three interest rate cuts this year According to Xinhua Finance, in the early morning of Thursday (March 21), Beijing time, the Federal Reserve announced that it would continue to maintain the target range of the federal funds rate between 5.25% and 5.50%, which is the fifth consecutive time that interest rates have been kept unchanged since September last year. The dot plot shows that the median Fed funds rate expectation at the end of 2024 is 4.6%, and Fed officials still expect a 75 basis point rate cut by the end of 2024. The Fed's March meeting also released expectations for inflation, unemployment, and economic growth. The Fed raised its forecast for US economic growth this year to 2.1% (1.4% in December), 2.0% in 2025 (1.8% in December) and 2.0% in 2026 (1.9% in December) compared to December. The unemployment rate is forecast to be 4.0% this year (4.1% in December), PCE (personal consumption expenditures) inflation is forecast to fall back to 2.2% in 2025 at 2.4% this year (2.4% in December), and core PCE inflation is forecast to be revised upward to 2.6% this year (2.4% in December) and fall back to 2.2% in 2025.

Brazil's central bank lowered its benchmark interest rate to 10.75% According to Xinhua Finance, the Monetary Policy Committee of the Central Bank of Brazil announced on the 20th local time that it would cut the benchmark interest rate (Selic) by another 0.5 percentage points to 10.75%, which is the sixth consecutive cut in the benchmark interest rate by the Central Bank of Brazil. In the communiqué, the Central Bank of Brazil noted that the members of the meeting unanimously decided to cut interest rates "given that current inflation expectations remain largely unchanged". However, at the next meeting in May, it is possible that the adjusted benchmark rate will be maintained, thus ending the downward cycle of the Central Bank of Brazil adjusting interest rates. Brazil's central bank highlighted that imported inflation and overheated services sector will have an impact on inflation expectations, but slowing global growth and interest rate hikes in other countries could push Brazil's benchmark interest rate further lower.

Tencent's annual revenue totaled 609.015 billion yuan, and the adjusted net profit increased by 36% Beijing News, on March 20, after the close of Hong Kong stocks, Tencent Holdings released its unaudited financial report for the whole year and fourth quarter of 2023. According to the financial report, the annual revenue was 609.015 billion yuan, a year-on-year increase of 10%, and the net profit (Non-IFRS) was 157.688 billion yuan, a year-on-year increase of 36%. In addition, in 2023, Tencent Holdings' gross profit, operating profit (Non-IFRS) and net profit (Non-IFRS) achieved significant growth for four consecutive quarters, with growth rates of 25%, 35% and 44% respectively in the fourth quarter, far exceeding the growth rate of revenue. Benefiting from the significant improvement of advertising targeting capabilities by AI technology, Tencent's advertising revenue reached a quarterly high of RMB29.794 billion, while the digital economy grew steadily to RMB54.379 billion, making a steady contribution to revenue

Overseas games achieved revenue of 13.9 billion yuan in the quarter and 53.2 billion yuan in the whole year, accounting for 30% of the total game revenue.

Bank of America survey: fund manager optimism rises Zhitong Financial News, a fund manager survey released by Bank of America on Tuesday showed that optimistic investors poured into emerging market equities in March at the fastest pace since April 2017 and into eurozone equities at the fastest pace since June 2020. According to the survey, fund managers' expectations for global economic growth are at a two-year high, with "risk appetite" reaching its highest level since November 2021. Bank of America said there were outflows from the U.S. stock market in March, especially consumer discretionary stocks and technology stocks. However, the "Big Seven" – Google, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla – remain the most crowded deals.

The final value of the harmonized CPI in the euro area rose 2.6% year-on-year in February The final value of the harmonized CPI in the euro area rose by 2.6% year-on-year, with an expected increase of 2.6%, a preliminary increase of 2.6%, and a final value of 2.8% in January, a month-on-month increase of 0.6%, an expected increase of 0.6%, a preliminary increase of 0.6%, and a final value decrease of 0.4% in January. The final value of the core harmonized CPI rose by 3.3% year-on-year, the expected increase was 3.3%, the preliminary value increased by 3.3%, and the final value rose by 3.6% in January, and the month-on-month increase was 0.6%, the preliminary value increased by 0.6%, and the final value in January decreased by 0.6%.

The Bank of Japan decided to lift the negative interest rate policy, raising interest rates for the first time in 17 years The Bank of Japan concluded a two-day monetary policy meeting on March 19 and decided to lift the negative interest rate policy, and the short-term interest rate will be raised from the original -0.1% to the range of 0%-0.1%. On the 19th, Bank of Japan Governor Kazuo Ueda put forward a proposal at the meeting on ending the negative interest rate policy and other changes to large-scale financial easing measures. The meeting decided to lift the negative interest rate policy, which will be the first time in 17 years that the Bank of Japan has raised interest rates since February 2007. In addition, the proposal includes an end to the "yield curve control" strategy that controls short-term and long-term interest rates, as well as a halt to the purchase of listed investment funds (ETFs).

Japan has a trade deficit of about 379.4 billion yen for two consecutive months According to the preliminary statistics released by the Ministry of Finance on the 21st, Japan's trade deficit in February was about 379.4 billion yen (1 US dollar is about 151 yen), a year-on-year decrease of 59.2%. This is the second consecutive month that Japan has recorded a trade deficit. According to the report, exports of automobiles and auto parts increased by 19.8% and 22.6% year-on-year, respectively, driving Japan's exports to about 8.25 trillion yen in February, up 7.8% year-on-year.

The Swiss National Bank cut interest rates by 25 basis points On the 21st, the Swiss National Bank unexpectedly announced a 25 basis point interest rate cut, lowering the benchmark interest rate from 1.75% to 1.5%, exceeding the consensus expectation of "keeping interest rates unchanged" and becoming the first developed economy in the G10 to cut interest rates after a long period of high inflation. After gradually raising interest rates to a ten-year high of 1.75% since March 2022, the SNB has left the rate unchanged for two consecutive times. The steady cooling of inflation and the continued strength of the Swiss franc supported the rate cut.

Japan's core CPI rose 2.8% year-on-year in February According to data released by the Ministry of Internal Affairs and Communications on the 22nd, in February this year, Japan's core consumer price index (CPI) after removing fresh food was 106.5, up 2.8% year-on-year. According to the data, the prices of food such as custard, cooked curry and fried chicken rose significantly, driving food prices up 4.8% year-on-year in February, and accommodation fees rose 33.3% year-on-year in the month as tourism gradually recovered. As the impact of government energy subsidy policies decreases, the decline in energy prices has slowed. Energy prices fell 1.7% year-on-year for the month, well below the 12.1% drop in the previous month, with electricity bills down 2.5% year-on-year and gas bills down 13.8% year-on-year. The Bank of Japan (BOJ) has been aiming for a stable and sustainable inflation rate of 2%. At present, Japan's core CPI has risen year-on-year for 30 consecutive months, and the increase has reached or exceeded 2% for 23 consecutive months.

List of stocks and bonds news

The State Administration of Foreign Exchange (SAFE) has improved the management of foreign exchange business of bank cards by issuing the Notice of the General Department of the State Administration of Foreign Exchange on Updating the Classification of Merchant Categories and Codes Used by Domestic Bank Cards Abroad (Hui Zong Fa [2024] No. 15, hereinafter referred to as the "Notice") to improve the management of foreign exchange business of bank cards. The main contents of the "Notice" include: First, to adapt to the changes in the merchant category codes of domestic and foreign bank card clearing institutions in recent years, and update the classification of merchant category codes used by bank cards abroad. The second is to optimize the classification and update mechanism of merchant category codes to achieve dynamic full coverage of the classification management of new merchant category codes. All along, the State Administration of Foreign Exchange (SAFE) has adhered to the principles of authenticity and compliance, implemented classified management of overseas bank card transactions through merchant category codes, and actively supported and facilitated the standardized use of bank cards abroad. In the next step, the State Administration of Foreign Exchange will continue to deepen the reform and opening up of the foreign exchange field, continuously improve the foreign exchange management of cross-border bank card transactions, facilitate and protect the consumption payment needs of individuals under the current account, and maintain the healthy order of the foreign exchange market. The Notice will come into force on May 1, 2024.

State Administration of Foreign Exchange: China's foreign exchange market has a cumulative turnover of 41.53 trillion yuan from January to February The State Administration of Foreign Exchange released the transaction overview data of China's foreign exchange market in February 2024. According to statistics from the State Administration of Foreign Exchange, in February 2024, China's foreign exchange market (excluding foreign currency pairs, the same below) totaled 16.86 trillion yuan (equivalent to 2.37 trillion US dollars). Among them, the bank-to-customer market turnover was 2.70 trillion yuan (equivalent to 0.38 trillion US dollars), the interbank market turnover was 14.16 trillion yuan (equivalent to 1.99 trillion US dollars), the spot market accumulated turnover of 5.21 trillion yuan (equivalent to 0.73 trillion US dollars), and the derivatives market accumulated 11.65 trillion yuan (equivalent to 1.64 trillion US dollars). From January to February 2024, China's foreign exchange market accumulated 41.53 trillion yuan (equivalent to 5.84 trillion US dollars).

China Securities Association: As of December 31, 2023, there are 4,800 corporate credit bond issuers On March 18, the Securities Association of China issued a notice on the business operation and compliance of credit rating agencies in the bond market in the fourth quarter of 2023. As of December 31, 2023, there were 4,800 outstanding issuers of corporate credit bonds. Among them, there were 2,864 issuers of debt financing instruments and 3,991 issuers of corporate bonds (including corporate bonds) for non-financial enterprises. From the perspective of the distribution of the main body, AA accounted for 30.10% and 43.72% respectively. 67.84% and 47.38% of issuers rated AA+ and above respectively, while 1.29% and 2.68% of issuers were rated non-entity.

China reduced its holdings of U.S. bonds by $18.6 billion On March 19, local time, data released by the U.S. Treasury Department showed that in January 2024, the holdings of the top three overseas creditors of U.S. bonds, Japan, China, and the United Kingdom were differentiated: China and the United Kingdom reduced their holdings, and Japan increased their holdings. According to the U.S. Treasury Department's January 2024 International Capital Flows Report (TIC), Japan increased its holdings of U.S. Treasury bonds by $14.9 billion in January, bringing its holdings to $1,153.1 billion, continuing to be the largest creditor in the United States. China reduced its holdings of U.S. Treasuries by $18.6 billion to $797.7 billion in January, the first reduction in positions after two consecutive months of increasing positions since November last year.

Bond Connect Northbound Trading Remains Buoyant Overseas Institutions Increase Their Holdings of Onshore RMB Bonds for the Sixth Consecutive Month According to a recent report released by BCCL, the trading volume of Bond Connect Northbound Trading was RMB677.5 billion in February this year, with a monthly average daily turnover of RMB37.6 billion. Among them, Treasury bonds were the most actively traded, accounting for 64% of the monthly trading volume. In addition, foreign institutions have increased their holdings of renminbi bonds for six consecutive months. According to the data, as of the end of February, foreign institutions held 3.95 trillion yuan of bonds in the interbank market, an increase of about 80 billion yuan from the previous month. This is the sixth consecutive month since September 2023 that foreign institutions have increased their holdings of onshore RMB bonds.

Beijing: Continue to support the Beijing Stock Exchange to become better and stronger At the press conference held by the State Council Information Office on the 19th, a number of Beijing officials said that Beijing will lead the construction of a modern industrial system with scientific and technological innovation, and consolidate and expand the leading advantages of artificial intelligence, high-level autonomous driving and other industries. In terms of strengthening the mission of doing a good job in financial work, we will continue to support the Beijing Stock Exchange to become better and stronger, and also explore and optimize the management of the negative list under the capital account. In addition, the real estate regulation and control policies will be optimized, the demand for rigid and improved housing will be supported, and more and better will meet the multi-level and diversified housing demand, so as to promote the healthy development of the real estate market in Beijing.

According to the China Securities Daily, according to the arrangement of the China Securities Regulatory Commission, on March 18, the market-based declaration of refinancing securities was adjusted from real-time availability to availability the next day, and the "T+1" of refinancing bonds as understood by the market was officially implemented. Previously, the suspension of the real-time usable business of refinancing borrowed securities has been carried out, and the brokerages participating in the test have said that they have successfully passed. According to industry insiders, the market-based declaration of refinancing securities has been adjusted from real-time availability to next-day availability, with the aim of protecting the rights and interests of small and medium-sized investors and creating a more fair and orderly market environment. With the continuous implementation of follow-up systems and norms, more reform measures will be introduced, which will further promote the dynamic balance and benign interaction of investment and financing, and boost investor confidence.

The dividend rate of a number of listed companies has reached a new high, and the normalized dividend mechanism of A-shares is being further improved According to the Shanghai Securities News, as of March 17, a total of 137 listed companies have launched cash dividend plans, with a total cash distribution of about 76 billion yuan in 2023. According to the data, among the above 137 companies, 17 companies are among the "billion-level dividend club", of which CATL, Ping An Bank, and Industrial Fortune Federation plan to distribute cash of more than 10 billion yuan, and 56 companies have a dividend rate of more than 50%, accounting for more than 40%. Some capital market researchers believe that at present, "investor-oriented" has become the consensus of all parties in the market, and under the guidance of policies, the willingness of listed companies to pay dividends will become stronger and stronger in the future, and the normalized dividend mechanism of A-shares is being further improved.

The regular adjustment of the FTSE Russell Na A Index sample is expected to bring more than 5 billion yuan of incremental funds According to the Shanghai Stock Exchange, on March 18, the regular adjustment of the FTSE Russell Global Equity Index Na A sample in the first quarter officially took effect. This time

A 76 samples were added to the regulation, including 40 in Shanghai and 36 in Shenzhen. After the adjustment came into effect, a total of 1,973 A-shares have been included in the FTSE Russell Global Equity Index, and the weighting of A-shares in the emerging market and global market indices has reached about 6.1% and 0.6% respectively. Market analysts said that this adjustment is expected to bring more than 5 billion yuan of incremental funds to A-shares, and will also enhance the enthusiasm and trading activity of foreign active funds for A-shares.

On March 19, Zhengshang announced that in order to further enhance the ability of the urea futures service industry, serve the construction of a unified national market, and help ensure the supply of agricultural materials, the Zhengzhou Commodity Exchange implemented the mechanism of "group delivery and nearby delivery" in urea varieties, and met the needs of industrial enterprises in different regions to participate in urea futures delivery by dynamically adjusting the premium of the delivery plant and warehouse and selecting the delivery point by the pick-up person in some non-benchmark delivery areas. The implementation method of urea "group delivery and nearby delivery" is as follows: the delivery factory warehouse will add a pick-up point in some non-benchmark delivery areas, and at the same time announce the existing pick-up points in the corresponding benchmark delivery area, and the premium of the pick-up point in the non-benchmark delivery area will be dynamically adjusted by the delivery plant warehouse according to the actual spot situation. According to the announced premium, the picker can choose to pick up the goods at the non-benchmark pick-up point, or choose the existing pick-up point corresponding to the benchmark delivery area of the factory warehouse to pick up the goods. When picking up the goods in the non-benchmark delivery area, the warehouse and the pick-up person shall settle the settlement according to the premium announced corresponding to the selected time. The mechanism will be implemented from the 16th trading day in June 2024.

According to Securities Daily, Wind Information data shows that in the past month (February 18 to March 18), public offerings, brokers, insurance and other institutions have investigated a total of 740 A-share listed companies, of which 559 public offering institutions have investigated listed companies, mainly in industrial machinery, electronic components, semiconductor products, electrical components and equipment and other industries. From the perspective of the companies surveyed, most of them have significant labels such as "technology" and "intelligence".

According to the Shanghai Securities Daily, since the beginning of this year, as the China Securities Regulatory Commission has emphasized strict access to issuance and listing, requiring the listing of "sick" enterprises from the source, there has been a wave of IPO "order cancellation" in the A-share market. According to the reporter's statistics, as of March 19, a total of 73 companies to be listed on the Shanghai and Shenzhen North Stock Exchanges have taken the initiative to "cancel orders" since the beginning of this year. In terms of sub-sectors, the GEM and the Beijing Stock Exchange were terminated

In addition, there are 8 orders on the Science and Technology Innovation Board, 13 on the Shanghai and Shenzhen Main Boards, and 8 on the main boards of Shanghai and Shenzhen. Judging from the IPO review and inquiry questions, the rationality of large dividends, R&D strength, and performance growth have become the "test points" of the Shanghai and Shenzhen stock exchanges.

Hong Kong stock companies have intensive repurchase actions, and the repurchase scale has exceeded 40 billion Hong Kong dollars during the year According to Securities Daily, the repurchase efforts of Hong Kong listed companies continue to increase. Wind data shows that as of March 21, 115 Hong Kong-listed companies have initiated repurchases during the year, with a cumulative number of 2.058 billion shares and a cumulative repurchase amount of HK$40.387 billion, compared with HK$13.1 billion in the same period last year, a year-on-year increase of 208%. Tencent Holdings' repurchase amount ranked first in the Hong Kong stock market during the year. As of March 21, Tencent Holdings repurchased about HK$9.8 billion.

The settlement cycle of U.S. stock trading will change from T plus 2 to T plus 1 Brokerage China news, local time on March 21, Reuters reported that in order to reduce the risk of unsettled transactions after the volatility period, from May 28, the settlement cycle of U.S. stock trading will change from T+2 to T+1. The halving of trade settlement times has been a headache for international fund managers as they face staffing issues, more cash and increased foreign exchange risk. At present, the U.S. stock market implements the T+0 trading system, but implements the T+2 settlement and delivery system. An investor buys a stock and can sell it that day, but the settlement of the transaction is not done immediately. For investors, selling stocks on Monday can only be withdrawn on Wednesday.

Category Market Views 20240318-0323

real estate

BOC Securities:

The National Bureau of Statistics released the national real estate development investment and sales from January to February 2024. From January to February, the sales area was 114 million square meters, a year-on-year growth rate of -20.5% (previous value: -12.7%), the development investment amount was 1.18 trillion yuan, a year-on-year growth rate of -9.0% (previous value: -12.5%), and the newly started area was 94.29 million square meters, a year-on-year growth rate of -29.7% (previous value: -10.3%).

Key takeaways

Commercial housing sales: The decline in sales has widened significantly to more than 20%, and house prices continue to face downward pressure. 1) The decline in commercial housing sales has expanded significantly. From January to February, the sales area was 114 million square meters, down 20.5% year-on-year, and the decline rate was 7.8 percentage points larger than that in December, and the sales amount was 1.06 trillion yuan, down 29.3% year-on-year, and the decline rate was 12.2 percentage points larger than that in December. 2) The average sales price has dropped significantly. From January to February, the average sales price of commercial housing was 9,294 yuan per square meter, down 7.7% from December and 11.1% year-on-year.

Real estate development investment, new construction starts, and completions: New construction starts fell by nearly 30%, and land investment and construction investment continued to be sluggish, dragging down real estate investment. From January to February, the amount of development investment was 1.18 trillion yuan, down 9.0% year-on-year, and the decline rate was 3.5 percentage points narrower than that in December. However, due to the impact of the adjustment of investment caliber, the year-on-year growth rate from January to February is not comparable with the year-on-year growth rate in December. Affected by many factors such as the continuous weakening of market volume and price, the continuous contraction of real estate enterprise financing, etc., the supply side of the industry has shrunk sharply, and real estate enterprises have continued to be under pressure to acquire land and start new construction, dragging down real estate development investment. From January to February, the newly started area was 94.29 million square meters, a year-on-year decrease of 29.7%, a decrease of 19.4 percentage points compared with December, and the year-on-year decline in the construction area was also as high as 11.0%. The area of completions turned negative year-on-year after 12 consecutive months of positive growth. From January to February, the completed area was 104 million square meters, a year-on-year decrease of 20.2%, and the growth rate decreased by 35.5 percentage points compared with December, which was the first negative growth since February 2023.

Developer's funds: The decline in the funds in place of real estate enterprises has expanded, and the weakening of sales collection is the main reason. From January to February, the funds in place for real estate enterprises were 1.62 trillion yuan, a year-on-year decrease of 24.1% (previous value: -15.8%). 1) Housing payment was 684.4 billion yuan, a year-on-year decrease of 35.4% (previous value: -21.2%), affected by the sluggish sales in the previous period. Deposits and advance receipts decreased by 34.8% year-on-year, an increase of 13.3 percentage points from December, and personal mortgage loans decreased by 36.6% year-on-year, a decrease of 16.0 percentage points from December. In February, the medium and long-term loans of the residential sector decreased by 103.8 billion yuan, a year-on-year decrease of 190.1 billion yuan, and a month-on-month decrease of 731 billion yuan. 2) Non-housing payments were 934.9 billion yuan, a year-on-year decrease of 13.0% (previous value: -9.7%). Among them, domestic loans were 314.4 billion yuan, down 10.3% year-on-year, and the decline was 0.6 percentage points narrower than that in December.

Investment advice

Due to the current residents' income and employment expectations are still weak, and some housing demand is overdrawn in the early stage, residents still have to bear the burden of new housing delivery

Affected by factors such as worries and the aggravation of the wait-and-see sentiment due to the decline in housing prices, the fundamentals of real estate are still weak. However, the recent central government's various statements have released positive signals, macro and industry supply and demand policies are also expected to continue to exert force, market expectations and confidence may be gradually restored, promote the real estate industry supply and demand to reach a new balance point, and then provide support for the smooth operation of the economy. This year, the core theme is still focused on the mitigation of liquidity risks. Under the pressure of a large funding gap in the industry, real estate companies that can safely survive the bottleneck period and benefit from policy support to get out of trouble have become the focus of attention this year.

From the perspective of the long-term main line, it is recommended to pay attention to the market opportunity of a bottom reversal. At this stage, it is recommended to pay attention to four main lines: 1) Central state-owned enterprises with no liquidity risk and good fundamentals of land acquisition and sales: Poly Development, China Merchants Shekou, China Resources Land, C&D International Group, Yuexiu Real Estate, Huafa Co., Ltd., and Greentown China. 2) Private enterprises with relatively high safety factor: Binjiang Group, Midea Real Estate. 3) Companies with greater elasticity and rebound at the bottom: Gemdale Group and Longfor Group. 4) There are opportunities for urban village renovation and affordable housing construction, or REITs-related themes: CCCC Real Estate, Urban Construction Development, and Nanshan Holdings.

债市

CSC Fixed Income Research:

The National Bureau of Statistics released economic data for January-February. Among them, the total retail sales of consumer goods were 8,130.7 billion yuan, up 5.5 percent year-on-year, the added value of industrial enterprises above designated size increased by 7.0 percent year-on-year, and the national investment in fixed assets (excluding rural households) was 5,084.7 billion yuan, up 4.2 percent year-on-year.

In terms of consumption, the potential continued to be unleashed, and the performance of catering was outstanding. During the Spring Festival, consumer demand was released intensively, which concentrated on driving the growth of the catering and service sector. The high demand for upgraded goods reflects the potential of mainland consumption.

In terms of investment, the overall performance is better, but there is still pressure on real estate, and investment in manufacturing and infrastructure is still strong. In the manufacturing sector, investment in high-tech industries performed well, and in infrastructure, the construction of major projects played a significant driving role.

In terms of production, production grew rapidly and continued to improve. The growth of industries and products has expanded, and the physical volume indicators have grown rapidly. If the intensity of subsequent consumption and investment is maintained, industrial production is expected to continue to operate smoothly.

In terms of bond market investment, economic fundamentals are an important determinant of the medium- and long-term point in the bond market. Judging from the economic data released in January-February, the overall economic situation is optimistic. The real growth rate of social zero was 6.2% year-on-year, reflecting a better consumption situation at the beginning of the year;

Assets increased by 4.2% year-on-year, and 8.9% after excluding real estate, reflecting that investment outside real estate still has a certain strength. With the continuous advancement of infrastructure projects, the economy has certain support.

The biggest uncertainty at the moment is the sustainability of the economic improvement. From January to February, the surveyed unemployment rate in urban areas was 5.3%, including 5.3% in February, up 0.1% month-on-month, showing a slight upward trend. The average weekly working hours of employees in enterprises nationwide continued to be at a high level of 49 hours in January and 48 hours in February. The combination of reduced employment and increased output is not easy to achieve sustainably, and the increase in the efficiency of the people on the job does not necessarily lead to effective demand, and the risk of insufficient demand remains. Further, the growth of consumption may also be involved in structural factors, and it should remain relatively cautious.

On the whole, the current point of bonds still has a certain degree of support, and the follow-up can pay attention to the continuity of economic data, and it is not appropriate to prematurely think that the market fundamental pattern has changed. As the time comes to mid-March, the warmer temperature promotes the investment project to enter the peak period of construction, and the follow-up can pay attention to the pace and development of various projects such as infrastructure, and then change the investment direction after the degree of restoration is confirmed.

stock market

Orient Wealth Securities:

The continuous recovery of A-shares is supported by three positive factors

Since February 2024, the strength of market valuation repair has far exceeded expectations, and in addition to the expectation of easing liquidity and stabilizing the economy, there are three positive factors supporting the continuous rebound of A-shares, and it is expected to continue to maintain the self-repair momentum of market stock funds at the beginning of the second quarter.

The adjustment of refinancing securities to "T+1" will further effectively control the stock funds of A-share shorting: On March 18, 2024, the market-based declaration of refinancing securities was adjusted from "real-time available" to "available the next day", and the "T+1" of refinancing securities was officially launched, and as of March 19, the balance of A-share securities lending was 42.411 billion yuan, a decrease of 17.208 billion yuan, or 28.86%, from 59.619 billion yuan on February 6. Previously, the China Securities Regulatory Commission (CSRC) had explicitly prohibited the refinancing and lending of restricted shares, which patched the loophole of short-selling A-shares at the institutional level.

The A-share IPO level continues to strengthen supervision, so that the supply imbalance has been fundamentally alleviated: the China Securities Regulatory Commission emphasized strict access to the issuance and listing, requiring the elimination of "sick" enterprises from the source of listing, the A-share market has seen a wave of IPO continuous order withdrawal, as of March 19, a total of 73 companies to be listed on the Shanghai and Shenzhen North Stock Exchange this year have taken the initiative to "cancel orders". In terms of sub-sectors, the ChiNext and Beijing Stock Exchange have the majority of termination cases, both reaching 22, in addition, the Science and Technology Innovation Board has 8 cases, and the Shanghai and Shenzhen main boards have 13 and 8 cases respectively.

Foreign purchases have recovered far more than expected, and the value of A-share investment is highlighted: According to the latest report from Bloomberg, global funds are actively buying Chinese stocks, and have been net buyers of Chinese stocks for the second consecutive month. Among them, two global funds, Norway's Skagen AS and Boston Partners of the United States, have increased their holdings of A-shares and Hong Kong stocks in recent months, citing low valuations, significantly reduced financial and regulatory risks, and improved corporate earnings. As of March 19, the net purchase amount of northbound funds for the year reached 66.43 billion yuan, which has exceeded the net purchase amount of 43.7 billion yuan for the whole of 2023. A number of foreign institutions believe that the current A-share market landscape is undergoing positive changes, coupled with market valuations at historical lows, and the investment opportunities in Chinese assets are highlighted.

Chief Core Perspectives (March 18 – March 24, 2024)

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