A Comprehensive Reflection On Economic Work Next Year

Last Thursday, the central economic work conference closed in Beijing, and the stock market rarely responded to the rise. At the end of the year and at a relatively high level, many stocks stubbornly broke through the important resistance area, which deserves attention.

I published an article at the first time: pointing out that the characteristics of the bull market in the stock market are obvious, indicating that global investors have confidence in the future of China's economy.

Why is China's stock market still stubbornly rising in December? It is not a bubble accumulation, but a great hope for China's future reform.

Of course, the resistance to reform, especially the major reform, is still great.

However, President Xi emphasized that we should seize the important period of strategic opportunities and ensure the continuous introduction of major reform measures with the strong economic growth. At the same time, we must deepen the reform to find new economic growth points and achieve strong growth for more than five years.

I have always stressed that the new normal is not the pronoun of low growth. This economic work conference has interpreted the new normal in 9 major ways. It is actually a response to the idea of advocating low growth and low growth.

The conference carried out multi-dimensional and repeated arguments against the "new normal" theory: Based on the potential analysis of GDP, the factor decomposition analysis based on Solow's new growth model, and the analysis of the counter cyclical risk management based on the macro regulatory framework, more importantly, based on the analysis of the macro economic environment changes based on major reforms.

It can be seen that Xi Jinping's new normal theory is ultimately directed towards two aspects:

First, we should substantially push forward the "supply reform" and generate new impetus through improving people's lives and stimulating the desire for wealth. The two is the substantive pformation of the strategy of opening to the outside world, accelerating the process of RMB internationalization and integrating into the trend of globalization in the financial market.

We must see that these two major reforms can only be done and can not be said.

Why? The extreme leftists always stare at the formation of property society will lead to private ownership; at the same time, the so-called hawks integrate stubbornly to fight against the United States. Therefore, the reform in 2015 is still a great sensation, like catching Zhou Yongkang, starting from the periphery.

On the surface, reform is a priority, but in fact, it is slowly reaching the core through marginal supply reform.

The so-called marginal reform focuses on five aspects:

A, administrative restructuring, comprehensive support and deregulation of the third industry, B and investment system reform, comprehensively promoting PPP (public-private partnership), C and technological system reform, promoting R & D conversion rate; D, factor price marketization reform, continuing to clear excess capacity; E, planning system and local interest mechanism reform; this point should be emphasized, relying on Beijing Tianjin Hebei and Yangtze River economic belt construction, not only directed at revitalizing the regional economy, but also more importantly, may explore inter regional mechanism of mutual benefit and mutual benefit, so as to reduce intra regional paction costs and improve resource allocation efficiency.

It can be deduced that the new theory comes from the new decision-making mechanism, including the new executive team and the think tank team.

In the case of the general control of the army's anti-corruption efforts, the personnel of some key departments in the future may continue to adjust, and substantive changes will take place in some areas.

At present, the market is most concerned about: state ownership, ownership reform, land reform, fiscal and taxation reform and so on can not be pushed forward all of a sudden, but there must be actions. First, we need to lay more groundwork in the ideological field. Two, we must make full preparations for the law.

Therefore, it is presumed that the momentum of growth will depend on deepening reform next year, with little potential and three carriages.

The core formulation of this conference is to promote "three carriages" to promote growth more evenly.

Obviously, President Xi is not satisfied with the economic work in 2014, especially the investment and export are too weak. In 2015, we need to increase support for these two departments and achieve steady growth driven by the traditional three carriages.

President Xi is not satisfied with several important economic decisions and executive departments, including the central bank and the NDRC.

The NDRC is not serious, and its ability to communicate with major power departments has been significantly degraded. There are projects and no matching situations.

Empty calls to increase investment, but saw a serious decline in investment rate; the central bank also shouted reform every day, shouting interest rate marketization, in fact, no action, several so-called fine-tuning, point irrigation, the market high interest rates still touched little! This meeting communiqu is clearly dissatisfied with the core financial and economic departments, and did not rule out the private sector leaders have made severe criticism, no change.

It is estimated that next year's economic work will continue to focus on expanding investment. We should start from the integration of the whole region, the integration of Beijing, Tianjin and Hebei, and the linkage of the Yangtze River economic belt. We must actively cooperate with the monetary environment.

Therefore, we can see clearly that the monetary environment will be further relaxed next year, and the so-called "tightness and moderation" is synonymous with pine.

At the same time, the term of interest rate marketization should be desalinated, and the market interest rate should be reduced substantially through money delivery.

At present, economists are debated about what is meant by "moderate elasticity".

The so-called water can not be released, and must be released water, grasp what yardstick.

I have always believed that the continued reduction of the deposit rate, including the great room for reducing interest rates, is not as accurate as lowering interest rates, because this is the particularity of China's decision to improve the environment and increase the flow of money.

However, interest rates are reduced by 3 times.

It is also necessary to rely on administrative means, that is, to strengthen the penetration of money into the real economy through the use of unconventional regulation. In other words, it is necessary to assess the financial institutions' support for the real economy.

More consideration should be given to the reality of global monetary easing, showing stronger and more flexible exchange rate control capabilities.

The RMB exchange rate must be moderately devalued, and there can be no collapse like ruble.

How to do it? Moderately reduce the RMB exchange rate to increase exports, and use more foreign exchange to purchase advanced technology and equipment and increase imports.

We can not simply increase foreign exchange reserves, but the total reserves will increase.

The RMB comprehensive exchange rate will not depreciate greatly, but the "loyalty" to the US dollar will decline, that is to say, we must moderately depreciate against the US dollar.

RMB internationalization reform will speed up. This is a grand strategy.

On the one hand, China's capital needs to go out and the whole region is planned to be implemented. The RMB can not be freely convertible and dragged behind. At the same time, China wants to establish the image of global economic leaders, capital accounts are not open for a long time, and basically refuse to open up, damaging the image.

I expect that capital account should be found free convertibility next year. In addition to the current increase in dealer mode, there are more measures to be introduced. In the following year, the renminbi will be basically realized free convertibility.

The monetary environment should take into account the changes in the national balance sheet. Although land reform should take place slowly, the pace of land private-making will be implemented in 2015. It will not necessarily bring about great changes like storm and storm, but it will certainly touch the ideological field and people's psychology.

To be a productive person, this will become the aspiration and aspiration of the whole people, and the monetary environment must be correspondingly.

At present, the best place to manifest wealth dreams is the stock market, followed by the global financial market as the main body of the foreign exchange market. We should also see that the wage raising task must be implemented next year, and the deficit must be increased.

The deficit is expected to increase to more than 2.5%, and the investment rate will be 5 percentage points higher than in 2014.

How much money do we need to put in? M2 will target around 14%! The total amount of loans will be around 12 trillion.

Remember a few points: stick to peaceful development.

Make full use of Obama, cleverly use Putin to suppress Andouble.

We must have a deep understanding of the beginning of the communiqu of the central economic work conference, which is actually the core of Xi Jinping's thought: "there is no change in the judgment of our country in a promising period of strategic opportunities, but the connotation and conditions have changed."

Since it is a period of strategic opportunities, the monetary environment can not be tight enough to stimulate inflation rather than fear inflation.

The drop in oil prices is a natural blessing, increasing monetary easing.

The sense of real easing is possible; the total amount of investment is lower than that of 2009, but it is far higher than that of 2014; the real estate industry is mainly market-oriented, even if the short term falls, it will not save the market. It is believed that the improvement of the environment, the increase of residents' income, the increase of property income, and the cold of the housing market will not be long. Relative to the housing market, the stock market should be more prosperous, and we should make use of the stock market to make a mixed economic reform. Therefore, we can not use policies to restrain bubbles under 4000 points. Of course, supervision is always necessary, especially during the bull market.

Yes

When we hit the 3000 point, the market diverge greatly.

The enthusiasm of foreign investment is far higher than domestic capital.

I analyzed the share of capital flowing into the stock market in November and found a phenomenon: larger funds are waiting to enter.

In November, 314 billion 200 million of bank card pfer, 236 billion 800 million of margin trading and 62 billion 700 million of Shanghai and Hong Kong.

The total amount of the above three pens is 613 billion 700 million, less than one day's turnover. It shows that foreign capital is very active.

Public offering funds are not as good as private equity funds, and insurance funds still have no large-scale entry.

To put it plainly, the capital of the capital is far higher than the funds that have already been put in. Therefore, some people are anxious to be short and there may be some small measures to suppress the policy. But every stock market pullback is buying opportunity.