According to China News Service, the chief economists who attended the “2021 Tsinghua PBCSF Chief Economist Forum” held on April 10 believed that as macro policies are more focused on long-term development, economic growth will be further fueled in China. They observed that China’s economy continued to recover steadily in the first two months of this year as the only major economy in the world that achieved growth last year. It is expected that the year-on-year growth rate of China’s GDP in the first quarter of this year to reach double digits.
Wang Tao, head of China Economic Research at UBS, predicted that China’s economy is expected to achieve a growth of 9% this year driven by domestic consumption and exports, and manufacturing investment will also rebound significantly fueled by the substantial increase in corporate income and orders. However, with the gradual implementation of monetary and fiscal policies, it is necessary to pay attention to credit market fluctuations in the process. The inflation pressure is expected to be controllable, with stable exchange rate and decline of leverage ratio.
Wu Ge, chief economist of Changjiang Securities, believed that China’s process of making up the global supply and demand gap has not yet ended, which means that external demand for products from China will remain high in the future. At the same time, the gap in China’s domestic consumption and service industry has not yet been fully bridged, and the rebalance of consumption has not yet ended. He believed that due to the weakening of the base effect in the next few months, China’s economic data may decline, but this does not mean that economic momentum has waned. “Excluding the base effect, the foundation of China’s economic development in the first half of the year is relatively solid in terms of domestic or external demand.”
Cui Li, chief economist of CCB International, mentioned that the pandemic has accelerated China’s economic transformation in the long run, and the future economic growth will be driven by consumption, high-tech and manufacturing upgrades. The acceleration of upgrading drives the improvement of economic efficiency. In the context of enhanced internal economic growth, the expansion of the financial cycle will no longer be the main driving force of corporate profit. Due to changes in its own driving force, the economic upward cycle will be more sustainable, benefiting not only emerging companies but also traditional ones.
From a policy perspective, China is also formulating plans for future. In the “14th Five-Year Plan” outlined by the government, a series of measures such as responses to aging society, climate change, and accelerating digital development are all aimed at building a higher-quality and more sustainable track of development.
“Our current policy is steered towards the right direction. Don’t pay too much attention to how much money is distributed this month and what is the GDP figure next month.” Zhang Zhiwei, chief economist of PinPOINT, remarked that the China’s policy does not aim at high GDP figure each year, but to pursue medium- and long-term sustainability. In contrast, the United States is increasingly focusing on short-term economic growth. From the perspective of global investors, they are more willing to invest their money in the more sustainable markets with medium and long-term fiscal and financial stability.
A more long-term and autonomous policy has also strengthened the resilience of China’s economy and finance system against external shocks. The yield on the 10-year U.S. Treasury has soared recently, renewing concerns about the “taper tantrum” in emerging markets. The most typical example is the “triple kills” in equity, debt and foreign exchange after Turkey raised its interest rate.
Guan Tao, global chief economist at Bank of China Securities, believed that the “taper tantrum” in emerging markets may become an important tail risk in the international financial market in the post-pandemic era, but China is in a relatively favorable position.
(Source: CCPIT)
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