With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming!
Lao Yang chatted about the room
2024-05-15 20:58Posted in Jiangxi Yiju Real Estate Research Institute, vice president of the real estate field creator
The Sino-US trade war, which has been silent for four years, has reignited the flames of war. The Biden administration brazenly imposed tariffs on some Chinese goods.
Mainly for our internationally competitive new energy vehicles, lithium batteries, photovoltaic cells, etc. For example, for China's most competitive new energy vehicles, the tariff has skyrocketed from the previous 25% to 100%!
$18 billion in commodities involved. It doesn't seem to be very large, but in fact, it has a far-reaching impact, and it is likely to be the beginning of a new round of competition.
First, a little recap of the course of the US-China trade war.
In January 2017, Trump was inaugurated as President of the United States. He has made it his political demand to protect U.S. interests in an all-round way.
A year later, in March 2018, the United States unilaterally announced for the first time that it would impose 25% tariffs on $60 billion worth of Chinese goods, marking the beginning of the trade war. This was followed by a trade war in July 2018. From 2018 to 2019, the United States and China imposed tariffs on each other, but the United States was significantly stronger than China.
The relaxation of things happened in January 2020.
The signing ceremony of the first phase of the China-US economic and trade agreement was held in the United States. Since then, the trade war has eased. Both sides have their own tax cuts, and the Chinese side has made more tax cuts.
In January 2021, Biden entered the White House. In contrast to Trump's maverick and extreme protection of U.S. interests, Biden has adopted a relatively neutral attitude towards trade with China; Therefore, in the past three years or so, Sino-US trade has remained basically stable.
Until now, there is another demon moth.
The reason is that 2024 is the US election year, and Biden will play against Trump again. At the same time, the U.S. economy has been weakening since last year. There is a louder call to protect U.S. manufacturing.
Objectively speaking, the trade sanctions involved 18 billion US dollars, which is still quite different from the scale of hundreds of billions of US dollars in the past.
Moreover, in recent years, the proportion of China's exports to the United States has gradually declined, and the proportion of Belt and Road countries has increased significantly.
But there is still a hidden risk of being further expanded by sanctions!
A recent report by a financial magazine. U.S. PV manufacturers have filed a new tariff petition to restrict the import of PV products from Vietnam, Malaysia, Thailand, Cambodia, involving the Southeast Asian PV supply chain established by Chinese companies.
Trump recently said publicly: I will impose a 200 percent tax on every car that comes from these factories (Chinese cars made in Mexico).
If you think about it, if the goods exported to the United States by some production bases of Chinese companies in Southeast Asia and Mexico are also taxed, the impact will be great.
Therefore, we should pay close attention to the impact of this event on China's economy, housing market, stock market, and future trends.
For example, in the stock market, I checked it, and since the beginning of this century, the Shanghai Composite Index has seen the largest annual decline in 08, plummeting by 65%! Mainly affected by the international financial crisis; The second year of decline, 2018, fell by 24%, mainly due to the trade war provoked by the United States.
This year, our stock market would have been stable and upward; But being tossed by the United States has added a lot of pressure.
From the perspective of economic development, it is divided into domestic demand and external demand; External demand is external circulation, mainly exported; Domestic demand is internal circulation, mainly consumption and investment.
Let's take a look at China's economic data in the first quarter of this year.
industrial added value increased by 6.1% year-on-year;
retail sales of consumer goods increased by 4.7% year-on-year;
the growth rate of fixed asset investment increased by 4.5% year-on-year;
Exports increased by 4.9% year-on-year.
The weakest is investment, which is divided into three parts:
infrastructure investment increased by 6.5% year-on-year;
manufacturing increased by 9.9% year-on-year;
Real estate development investment fell by 9.5% year-on-year!
The weakest investment in real estate is dragging down the economy!
Exports grew at 4.9 percent, which can be said to be neutral and slightly higher than the nominal economic growth rate in the first quarter.
Take a look at the graph of China's export growth (moving average).
From 2017 to the first half of 2018, the growth rate of investment was positive, with a growth rate of about 10%, which is still good.
After the outbreak of the trade war, especially in 2019, China's investment growth continued to decline, once close to zero.
Since the second quarter of 2020, the trade war between China and the United States has eased; At the same time, after the outbreak of the epidemic, China's industrial chain was significantly less affected than that of other countries, so the export growth rate was very fast.
In 2022 and 2023, export growth began to decline year-on-year in some months.
Since the fourth quarter of last year, the growth rate of exports has turned from negative to positive.
In the first quarter of this year, it grew by 4.9%, but looking at March alone, there was actually a negative year-on-year growth.
Therefore, it seems that this year's exports are a little better than last year, but there is a trend of weakening.
Now that the United States has provoked a trade war, the export situation this year is not optimistic.
Exports are external demand, and at the same time, they also drive the manufacturing industry in domestic demand; In the first quarter of this year, the growth rate of investment in the manufacturing industry was 9.9%, which was the highest; However, if external demand weakens, then the entire manufacturing investment and industrial added value will also weaken.
After such an analysis, you may be a little worried, after the United States provoked trouble, this year's economy will be a little more stressed.
Lao Yang feels that the issuance of 1,000 billion ultra-long-term special treasury bonds in the near future may have something to do with this matter. Because in the past few months, including the visit of US Treasury Secretary Janet Yellen some time ago, she has complained about overcapacity in some areas of China.
We should have anticipated the U.S. tariffs in advance. It is a good countermeasure to carry out long-term strategic layout and stabilize the economy in the short and medium term by issuing ultra-long-term treasury bonds.
Next, let's talk about trillions of special national bonds.
In addition to the above-mentioned response to the U.S. trade war, there are other contexts.
For example, the currency wants to release water, but it can't, because the water is hoarded in the banking system and the state-owned enterprise system.
The current economy is still sluggish, and real estate in particular continues to be a serious drag on the macro economy.
In this context, the national level has made a big move to issue 1,000 billion ultra-long-term special treasury bonds.
The main tenors of this offering are 20-year, 30-year and 50-year tenors. Among them, the 50-year bond is said to be issued for 100 billion, and such a long-term treasury bond should be issued for the first time.
Compared with ordinary government bonds, the so-called special treasury bonds have a special purpose and special function, and they are not included in the fiscal deficit.
Historically, we have issued special government bonds three times.
For the first time, in 98, 270 billion special treasury bonds were issued to the four major state-owned banks, mainly to supplement the capital of wholly state-owned commercial banks. At present, the domestic economy is affected by the East Asian financial crisis, and under the background of the reform of state-owned enterprises, enterprises have serious debts, and there are many bad debts and bad debts of banks.
The second time, in 07, special treasury bonds were issued, 1.55 trillion yuan, which was used to establish the capital of the national foreign exchange investment company. At this time, it was the best time for China's economy, the manufacturing industry was the most prosperous, China became the world's factory, exports grew sharply, the foreign trade surplus was very large, and the appreciation of the renminbi against the US dollar hit a record high.
Third, in 2020, special treasury bonds were issued to fight the epidemic, totaling 1 trillion; They are five, seven, and ten years.
The fourth time, that is, the purpose of this issuance of special treasury bonds, has been mentioned in the government work report in March this year: starting from this year, it is planned to issue ultra-long-term special treasury bonds for several consecutive years, which will be specially used for the implementation of major national strategies and security capacity building in key areas.
The director of the National Development and Reform Commission further explained that it will focus on supporting the construction of scientific and technological innovation, urban-rural integrated development, regional coordinated development, food and energy security, and population quality development.
The issuance of treasury bonds is a fiscal policy, so why doesn't monetary policy exert force?
Let's take a look at recent financial data.
At the end of April, the balance of broad money (M2) was 301 trillion yuan, a year-on-year increase of 7.2%, the lowest in nearly 20 years!
The balance of narrow money (M1) was 66 trillion yuan, down 1.4% year-on-year, also the lowest in nearly 20 years, and the key was negative growth for the first time!
The negative growth of M1 mainly reflects the fact that enterprises and institutions have more fixed deposits, that is, they currently have money in their accounts, but they dare not invest.
In fact, the resident sector also has money, but they are desperately trying to save money and grab large certificates of deposit from banks, and they also dare not spend money or invest.
The current problem is that the central bank's monetary policy is a bit ineffective, printing a lot of money, but the money cannot be lent out in the bank pool, because the social demand for loans is relatively low; At the same time, the residential sector and the business sector have money, but they don't spend it.
For example, the issuance of 1,000 billion yuan of ultra-long-term special treasury bonds, which will be issued and sold, will be purchased by various groups, including enterprises and residents.
Then, the government will use the raised money to invest and spend it to promote major strategies, while also promoting economic development, stimulating investment, and indirectly stimulating consumption.
Many people may say, what does this have to do with the property market?
The stakes are high!
At present, the real estate is relatively sluggish, and it is far from coming out of the trough. Let's look at both ends of the supply and demand ends of real estate.
The supply side refers to selling land, building houses, and selling houses; In fact, the past three years have been contracting, and I said before that after the current property market downturn, the degree of contraction on the supply side is much greater than that on the demand side.
Now the real estate market is oversupplied, not because there is too much supply, but because the demand is too low!
So how do you stimulate demand?
As people's incomes increase, there are more job opportunities, and their confidence in the future increases, they dare to spend their savings, whether it is to buy a house or a car.
Therefore, stabilizing the economy and boosting confidence is the key to stimulating demand for home purchases.
This year's 1,000 billion national debt will be smashed, and there may be another trillion next year; The economy has stabilized and recovered, which will naturally have a positive impact on the demand for housing in the property market.
Let's take the example of the last issuance of special treasury bonds, the outbreak of the epidemic in 2020, the impact on economic employment income, the government relaxed monetary policy, and more importantly, smashed into 1,000 billion special anti-epidemic treasury bonds.
The results were immediate, with a strong economic rebound starting in the second quarter of 2020 and continuing into 2021. During this period, there was also a wave of market conditions in the property market.
In the face of this time the United States is doing things again, and the prospects are not optimistic, in this context, what should real estate do?
In fact, it is very simple, real estate must stabilize and recover as soon as possible, so as to stabilize the economic market.
Let me tell you a little historical story.
The trade war broke out for the first time in 2018, and the current Chinese property market is very hot, which has been hot for two years, and has been tightened since 9.30 in 2016. And the regulatory policies continue to escalate, and by 2018, the relevant departments are preparing major regulatory measures, including the introduction of property tax.
But at this time, the trade war broke out, and the pace of regulating the property market slowed down, especially the suspension of property taxes. You can check the historical data, from 2013 to 2017, the relevant departments repeatedly mentioned the promotion of real estate tax. But from 2018 to the fall of 2021, the relevant departments did not mention it.
In addition, when the last round of real estate moves was made, spicy measures such as the three red lines and the restriction on the proportion of real estate loans were introduced in the second half of 2020; It was just as the trade war was easing.
According to the above logic, Lao Yang believes that the next efforts to save the property market will be greatly strengthened! Including accelerating the implementation of the destocking proposed by the high-level meeting at the end of April!
This year, external demand should not be pinned on high hopes, then domestic demand will be topped. The biggest shortcoming in domestic demand is real estate.
The economy makes up for the shortcomings, and the real estate is destocked.
This will be one of the key points in the mainland's economic work for some time to come.
At the end of the year, let's review the inspection......
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With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming! -
With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming! -
With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming! -
With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming! -
With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming! -
With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming! -
With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming! -
With the escalation of the trade war and the borrowing of trillions of dollars, China's economy urgently needs to make up for this biggest shortcoming!