Editor of Economic Daily-China Economic Net: In 2020, the second half of China’s economy has begun, and the next performance has attracted much attention. Can the employment target be achieved in the second half of this year? What will be the trend of the property market? Will retaliatory consumption appear? … … For these economic hot issues that the society cares about, the Financial Research Center of Bank of Communications released "Born Inward — — Macroeconomic and financial outlook for the second half of 2020 was analyzed and predicted.
Employment: The annual target of 9 million yuan can be achieved.
According to the report, with the obvious acceleration of the resumption of work and production and the targeted support of policies, it is still relatively certain to achieve the goal of 9 million new jobs set by the government throughout the year. First, focus on supporting the employment of key groups and ensuring new jobs. The second is to focus on supporting small and micro enterprises to reduce unemployment. The third is to develop emerging industries and promote flexible employment. Fourth, strengthen training, expand the number of recruits, ease employment pressure and improve the quality of the labor force.
GDP: The economy can achieve positive growth throughout the year.
As for the GDP growth rate, the report predicts that the economic growth rate in the second half of the year will be significantly faster than that in the first half of the year. The development of the global epidemic and the recovery of external demand will have an impact on China’s economic operation. Under the benchmark scenario, the economic growth in the third quarter recovered to about 6%, and the annual economic growth rate was about 2.5%. Under the pessimistic scenario, the global demand has been significantly weakened by the repeated epidemic, and the economic growth rate in the third and fourth quarters is still low, with the annual economic growth of about 1%; Under the optimistic scenario, the global epidemic quickly disappeared, the external demand resumed and the domestic active policies were effective, and the economic growth rate rebounded significantly in the third and fourth quarters, with an annual economic growth of about 3.5%.
Consumption: there will be no retaliatory consumption, and a moderate recovery can be expected.
Will retaliatory consumption appear in the second half of the year? The report doesn’t think it will appear. First, the epidemic has brought a serious impact on outdoor consumption, second, the epidemic has brought an impact on employment, and third, China’s rescue policy has little support for families and individual residents. As the epidemic subsides and production and life return to normal, the recovery of consumption in the second half of the year can be expected, and the consumption varieties may be divided: the consumption of anti-virus products such as medicine, disinfectant and toiletries increases rapidly; Necessary consumer goods, such as daily necessities and electronic products, which are less affected by the epidemic have recovered quickly; Consumption related to real estate and automobile industry chain has gradually improved; The recovery of service consumption may be slow.
Investment: Focus on "New Infrastructure"
The report predicts that the annual infrastructure investment will increase by 8%. Fiscal and monetary policies focus on targeted support, and infrastructure investment focuses on "new infrastructure". Traditional infrastructure investment will also accelerate, but the intensity may be limited. The downward trend of market interest rate and the decline of financing cost of housing enterprises may support the gradual acceleration of real estate development investment. As the lack of speculation in housing indicates that the real estate control policy will not be relaxed, it will restrict the growth rate of real estate development investment, which is expected to increase by 5% throughout the year. The investment in high-tech manufacturing and equipment manufacturing has a good growth momentum, but the weakening of external demand has a great impact on export-oriented manufacturing. The investment prospects of traditional manufacturing industries are not good, and the operating pressure of enterprises is increasing and profits are narrowing, which will seriously affect the investment expectations of manufacturing industries. The negative growth trend of manufacturing investment may remain for some time, and it is expected to increase by -4% for the whole year. It is estimated that the annual investment will increase by about 3.1%.
Bond market: short-term fluctuations do not affect the medium-term trend.
The report pointed out that the fluctuation of short-term bond market is mainly disturbed by factors such as the marginal slowdown of monetary policy easing. From the medium-term logic point of view: the current marginal slowdown of monetary policy operation is not a monetary policy shift, and the recovery of the real economy has just begun and the long-term growth pressure is still great. The withdrawal of policy strength from the emergency mode during the anti-epidemic period is a short-term disturbance. In the second half of the year, under the control of the central bank’s "moderate money+wide credit", the money market interest rate SHIBOR and other probabilities are still "fluctuating" at the bottom. Although the bond market yield is difficult to show a sharp trend, the overall sharp rebound in the second half of the year does not have the driving foundation of liquidity fundamentals.
Stock market: maintaining range volatility and grasping structural opportunities
The report believes that fundamental recovery, low valuation, sustained net inflow of foreign capital, possible acceleration of credit cycle expansion and a series of reform measures in the equity market are all positive factors in the current domestic equity market. However, considering more uncertainties overseas, the stock market will still maintain a range fluctuation pattern during the year, and the bottom point should not fall below again during the year. However, considering the adaptation to the basic situation, there are some difficulties in continuing to attack, and we should remain cautiously optimistic. From the perspective of investment opportunities, we can still focus on new infrastructure areas such as science and technology supported by policies, and leading enterprises in industries such as essential consumer goods related to domestic demand and medicines related to making up shortcomings. The registration system continues to advance, and it is expected that the market profit will be concentrated in the head enterprises in the future, and the trend of "the strong will be strong" will continue.
Exchange rate: Sino-US relations dominate the exchange rate trend, and two-way fluctuations may become the norm.
Since 2018, due to political factors such as trade friction, the RMB exchange rate has deviated from fundamental factors. The report predicts that the US dollar may weaken slightly in the second half of the year, while the spread between China and the United States will remain high. Under the background of loose global liquidity and ultra-low interest rates, RMB assets are expected to continue to attract foreign capital inflows, and the RMB exchange rate may rebound slightly to around 7. However, in the second half of the year, the global epidemic situation is still uncertain, the market sentiment is still fragile, and American politicians may still make an issue of China during the election, so the RMB exchange rate fluctuates greatly. It is expected that the RMB exchange rate may fluctuate in the range of [6.9,7.2].
Property market: There is great pressure on housing prices in these places.
For the property market in the second half of the year, the report predicts that the transaction trend may change in two stages: the first stage is the short-term repair and replenishment of sales volume, and the regulation policy of tightening outside and loosening inside and the liquidity dividend of rising water are two catalysts to promote the release of demand; The second stage is to return to the original downward cycle. If the policy orientation does not change, short-term gap repair will not be enough to constitute a cyclical upswing. The regional performance is even more different: the "resident demand" in first-and second-tier cities is easy to release, and the pressure of rising house prices in low-inventory areas such as Shenzhen and Hangzhou is high; It is difficult to maintain the "demand for migratory birds" in third-and fourth-tier cities, and the old reform effect cannot completely replace the shed reform. Thanks to the friendly monetary environment, the pressure on the capital cost of housing enterprises has obviously eased.
Crude oil: oversupply eased, and oil prices may fluctuate upward.
In terms of crude oil, the report believes that China leads the recovery of global crude oil demand, and the "OPEC+"production reduction agreement has begun to take effect, which has jointly eased the pressure of oversupply in the market. However, the upward pace of oil prices will slow down after experiencing a significant rebound. First, although the demand for crude oil is improving, it still faces uncertainty. Second, the production reduction action started at the end of 2016 also proves that under the background of the rising of non-OPEC+oil producers such as the United States, multi-party games run through the production reduction agreement, and the "OPEC+"production reduction action alone is not enough to fundamentally change the situation of oversupply. Third, the high inventory of crude oil still needs to be digested. In the second half of the year, the oil price will fluctuate upwards, and the Brent oil price center may be 40-55 USD/barrel.
Gold: the allocation value is prominent, and the upward momentum of gold price is sufficient.
Affected by the epidemic, the financial market has been in great turmoil this year, while the gold market has a unique scenery. Looking forward to the market outlook, based on the safe-haven function and value-preserving function of gold, the report predicts that the price of gold still has sufficient upward momentum, or mainly fluctuates higher. First of all, the fear of a new round of pneumonia has stimulated investors’ safe-haven demand for gold assets. Secondly, in the global monetary easing policy and low interest rate environment, the expectation of inflation and currency depreciation has increased, triggering the demand for gold preservation. Finally, in the coming period, uncertainties from the United States and the dollar will also support the rise of gold prices.
The report was completed by Cai Puhua, Zhou Kunping, Tang Jianwei, Liu Jian, Chen Ji, Liu Xuezhi, Hu Yanan, Xia Dan and Jian Wu from the Financial Research Center of Bank of Communications. (Economic Daily-China Economic Net reporter Ma Changyan)
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