After Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, threatened in early March that he was “very worried about the financial markets,” Zhu Min, former vice president of the International Monetary Fund (IMF), recently warned “don’t have expectations for the stock market,” saying that as Beijing returned to investment-led growth last year, structural reforms were needed. The need for structural reform. Goldman Sachs has also warned that the “V-shaped rebound” of the mainland economy is at an end and that anxiety about the future may dampen the recovery of household consumption.
Zhu Min, who is now the director of the National Institute of Finance at Tsinghua University in Beijing, attended the Boao Forum for Asia and explained that although the capital market looks good on the outside, it is based on a delicate balance, and once the supply and demand changes, the market fundamentals will also change greatly, so the stock market cannot be too positive.
Among them, China’s economy from the new pneumonia (CCP virus) epidemic strong recovery, he believes that is due to the promotion of investment and export growth, but this makes the mainland economy back to the past to investment-driven, different from the past 10 years the government has been advocating consumption-driven model, which is a huge structural problem, there must be structural reform policies to support. The brokerage firm Goldman Sachs also believes that following the first quarter of this year, the mainland’s per capita consumer spending grew by a remarkable 17.6% in nominal terms year-on-year, it will be difficult to bounce up again because the savings rate of residents are “stubbornly” high.
The bank also warned that China’s economy grew sharply year-on-year in the first quarter of this year, showing a “V-shaped recovery” after being hit by the epidemic last year, but has now reached a turning point. The mainland’s policy, for example, has shifted from helping the post-epidemic recovery to a long-term economic policy of maintaining stability. Underneath the strong growth lies the problem of uneven growth across sectors or industries, and the drivers of growth have shifted over time. Among them, exports and building sales in the last year, but the opposite of new housing construction and industrial production investment to run the loss.
For the global economic recovery, he pointed out that one of the important factors is whether the two major economic locomotives in China and the United States can maintain strong growth. He pointed out that although the U.S. economic growth is strong, but the Biden administration’s stimulus policies may make the economy “overheating” pushing up local inflation, so pay attention to the U.S. monetary policy, especially whether it will raise interest rates early on emerging markets caused by “spillover effects.
While the market is looking forward to an improvement in Sino-US relations, former US White House economic adviser Kudlow warned that the current US administration’s bailout package is a backfire, saying that the trillion dollar stimulus measures, even though to some extent consumer spending has surged, the soaring part “are creating massive growth and exports for China, and the US trade deficit with China is unprecedented The U.S. trade deficit with China is at an unprecedented level,” he said.
He pointed out that China’s gross domestic product (GDP) jumped 18 percent year-on-year in the first quarter, of which exports were able to jump 38 percent year-on-year, mainly due to exports to the United States, during which U.S. retail sales jumped 14 percent, criticizing the current U.S. government’s fiscal stimulus is simply a “Chinese stimulus plan,” which could be used by China to The U.S. government’s fiscal stimulus is basically a “Chinese stimulus plan,” and China may use the money to buy military equipment and launch cyber attacks on the U.S., asking, “Do we really want to help China like this?
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