Liu Shan: How to choose the future housing policy is a focal issue

Liu Shan, President of Phoenix Finance and Economics Research Institute:

The theme of this year's "China Housing Development Report 2020-2021" is to usher in the dawn and start again, I think since it is a new departure, then the basis and conditions for departure have undergone new changes. The biggest event of the year is the COVID-19 pandemic, which has affected our lives and changed the world.

From our own perspective, this contactless way of service and work is even more ingrained. According to our observation, from international to domestic, many companies carry out some decentralized office, which may have an impact on the future way of living, which is worth studying, and then there is the new crown epidemic that has changed the global economy and international politics. It is in this context that China has established a new development pattern in which the internal cycle is the main body and the internal cycle and the external cycle promote each other, and at the same time establishes a new strategy for demand-side reform.

My own understanding is that the driving force of China's economic growth in the medium and long term may depend more on consumption, and the short and medium term may also take into account investment. From a consumption perspective, consumption decisions may rely not only on immediate income, but also on income expectations throughout the life cycle. Therefore, whether it is housing consumption or non-housing consumption, housing price stability is needed. Because there is no stability in housing prices, it may inhibit the consumer demand of residents; if from an investment point of view, future investment may be more concentrated in the field of science and technology, solving our card neck project. From China's point of view, I have always believed that the environment for theoretical innovation in China is worse, but our institutional advantages in overcoming difficulties and the vast space in the market are conducive to our innovation in the industry. The risk of science and technology investment is relatively high, so the financing of the technology industry in the future depends more on direct financing. On the one hand, direct financing can support the real economy and the development of the technology industry; on the other hand, wealth benefits may also stimulate consumption. Therefore, from the perspective of decision-making and consumer choice, asset allocation may be more inclined to the equity market, which will also have an impact on the housing market and the financial attributes of housing.

On the other hand, we will also see that in the context of global monetary easing, some cities in our country with growth and net population inflow will have a strong demand for real estate and an exciting scene of investment demand. Therefore, the future housing policy and how investors choose their asset allocation are all a focus issue.