These days, some netizens are chasing and asking a question, what is this round of economic stimulus for? Is this the beginning of a new economic cycle for China, or is it a reactive response strategy? Or to put it simply, will the stock market start to grow? If yes, why cows?
The answer is actually very clear, this time the scale is unprecedented, far exceeding the 4 trillion that year. Why aren't we afraid of the negative effects of 4 trillion anymore? Yesterday's press conference of the Ministry of Finance has already told you the answer.
First of all, to reiterate the most important principle, the world is complex and volatile, as the second largest economy, we are enough to influence the main line of world development, so the most important thing is to see the general trend clearly, not the technical analysis at the micro level.
This round of China's asset surge began with the stock market and property market.
The stock market began to start the financial policy on September 24, and the Shanghai Composite Index soared to more than 3,300 points before the long holiday, and opened the market with a limit of more than 3,600 points on October 8 after the long holiday, although there have been several adjustments, it is still above 3,200 points.
The property market is also based on the new deal on September 24 as a starting point, the four major first-tier cities quickly adjusted their policies before the long holiday, especially Guangzhou completely canceled the purchase restrictions, and the number of visits and transactions in the property market in Guangzhou and Shenzhen began to soar during the festival, and Beijing and Shanghai also rose to varying degrees.
As we said two days ago, China has rapidly raised the prices of core assets with just a few policies, and few countries in the world have been able to do so, which fully demonstrates the strength of our family foundation and the strength of our economy.
Even if we only look at this, even if we have encountered challenges in the past few years, we should not be presumptuous.
In recent years, many experts have said that many of our markets have various restrictive policies, and if they were completely liberalized like the United States and the West, they would not be what they are now, let alone at the current price.
There are too many Chinese, the problems are complex, and we want to have a healthy, balanced economy and a good life for most people.
So, at the moment the whole of China is seriously undervalued, this is a drastic reset of the value of China's assets and labor, and soon the whole of China will become very valuable.
This value is relative to the whole world, not simply saying that things have become expensive.
For example, someone said that in the next few decades, Beijing will become the center of the world, so you should not be surprised how expensive a house in Beijing will be.
As another example, there are now several places that have imposed tariffs on our electric vehicles, essentially thinking that our cars should be worth more money.
In this context, in just half a month, there have been major changes that can affect the whole world.
So why are there still so many people who are not confident and do not believe? There are two important issues here.
First, why now? Or simply ask why China is doing now, but the 4 trillion yuan of the year has brought a lot of negative effects?
Second, is this time for real, or is it a false boom? Is it a carnival or a trap?
The answer is clear, the time has come, and there is nothing false. Since 2008, China has undergone tremendous changes.
The 4 trillion in 2008 does not seem to be much now, but the GDP at that time was only 32 trillion, 4 trillion is equivalent to 12.5% of GDP, and if calculated in the same proportion as the 126 trillion GDP in 2023, it is close to 16 trillion.
Also, what year is 2008? With the outbreak of the international financial crisis, China's economic growth rate has fallen, exports have shown negative growth, and a large number of migrant workers have returned to their hometowns, and the economy is facing the risk of a hard landing.
There is a very important background behind this, we were still in the last round of overcapacity cycle, and we were piling up a large number of backward production capacity in low-end industries, and the efficiency of the whole society was not high.
The supply-side reform and manufacturing transformation and upgrading that began in 2015 has completely changed this situation, and the current exports, high-end manufacturing accounts for more than 80%, and the overcapacity is no longer the lack of competitiveness of low-end manufacturing, but the advantages of high-end products.
At the same time, the consumption level of the domestic market in 2008 was not high and the scale was not large. In 2008, the total amount of social zero was only 11 trillion yuan, and the economy at that time was heavily dependent on exports, according to Mr. Huang Qifan, imports and exports accounted for more than 65% of GDP, which was dominated by external circulation.
In 2023, the proportion of China's imports and exports in GDP will drop to 33%, and the domestic market is already large, and it is already the second largest domestic demand market in the world.
So, in 2024, the fundamentals of China's economy have changed and become very competitive. At this time, no matter how the economy is stimulated, it will not only be escorted by the large domestic market, but also able to occupy more markets around the world soon.
Made in China is too strong, and the Chinese market is also very large, which is the fundamental reason why the United States and the West are very afraid.
That's where the confidence of this massive stimulus lies. As long as China's goods sell well all over the world, we are not afraid of how the dollar will be tossed.
Therefore, from the financial sector on September 24, to the high-level meeting on September 26, to the press conference of the National Development and Reform Commission on October 8 and the Ministry of Finance on October 12, everything has been clear.
Everything in the world is cruel, who the times knock out, will not say goodbye, and the same is true of the powerful United States.
Yesterday I said to a netizen, we believe, you can not believe it. Over the past 40 years of reform and opening up, those who have chosen to believe in it have become rich every time; Those who don't believe it, many of them are still the same.
The era of China has really come.