2024-09-30
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my opinion on the market is just one word: buy!
recent policies have been launched with unprecedented intensity, the strongest in the past five years.
large-scale economic stimulus measures have been launched, the stock market has continued to surge, and the supreme people's congress has proposed for the first time to promote the stabilization of the housing market, and go all out to fight for the economy. the spring of china's economy has come.
on september 27, the shanghai stock exchange trading system went down for more than an hour due to excessive trading volume. on september 29, the shanghai stock exchange had to organize and conduct business tests related to platforms such as bidding and comprehensive industry. the bidding trading system received a total of 270 million orders, which was twice the historical peak.
on september 26, david tepper, a well-known american billionaire investor and hedge fund legend, said that after the federal reserve cut interest rates, his important decision was to buy chinese stocks, and now he wants to "buy all assets in china" "china's latest policy is beyond expectations." david tepper is the founder and president of appaloosa asset management and is considered one of the most successful hedge fund managers of all time. bottom opportunity.
goldman sachs' recent conference call was blown up. foreign capital is accelerating its entry into china, and its interest in chinese assets has increased significantly.
what kind of bull market will be in the future? i think it is a "confidence bull". because the policy has greatly exceeded expectations, it has brought about a sharp reversal in confidence in china's assets and economic prospects. it is a reward for those who are bullish on china and a blow to those who are bearish on china. things must be reversed if they are extreme, otherwise things will be peaceful.
this time, not only are the words in the document inspiring and the determination vivid on the paper, but many policies that are accessible to the people have been introduced and implemented.
1. on september 29, large-scale economic stimulus measures were implemented one after another. the standing committee of the state council deployed to accelerate the implementation of 102 major projects. the central bank lowered the existing mortgage interest rates. guangzhou fully relaxed purchase restrictions, and shanghai and shenzhen partially relaxed purchase restrictions.
the state council executive meeting on september 29 emphasized: study and deploy the implementation of a package of incremental policies; speed up the pace of introduction and implementation, and policies with relatively mature conditions should be launched immediately; all departments must not take refuge or shirk responsibility, and form a strong joint force for work; deploy relevant measures to accelerate the implementation of the 102 major projects in the "14th five-year plan"; we must focus on the overall situation and grasp the implementation of major projects, further consolidate the responsibilities of all parties, strengthen departmental coordination and central-local linkage, strengthen financial support and factor resource guarantees, and solve difficulties blocking points to ensure that the construction of major projects achieves the expected results.
the project is there and the finances can keep up. we expect that in the future, through raising the deficit ratio, increasing the issuance of special government bonds and special bonds, increasing fiscal support for new and old infrastructure, and helping localized debt, new fiscal funds may not be less than 3 trillion.
on september 29, the party group of the ministry of housing and urban-rural development held a party group meeting to convey and study the spirit of the political bureau meeting of the central committee on september 26, and to study and deploy the implementation work. the meeting emphasized: make every effort to promote the real estate market to stop falling and stabilize; support cities, especially first-tier cities, to make good use of their autonomy in regulating the real estate market and adjust housing purchase restriction policies according to city policies; strictly control the increase in commercial housing construction, optimize the stock, improve the quality, and give full play to the role of the urban real estate financing coordination mechanism is to increase the approval and approval of "white list" loans for projects to meet the reasonable financing needs of real estate projects; to accelerate the renovation of urban villages, urban dilapidated housing and old urban communities, and to strengthen the renewal and renovation of urban underground pipelines.
the relaxation of purchase restrictions in first-tier cities has begun, with guangzhou, shenzhen, shanghai and others issuing new policies. on september 29, guangzhou officials announced that new purchases would be fully liberalized. that is, households with registered residence in the city, non-registered residents, and singles purchasing housing within the city will no longer be subject to review of home purchase qualifications, and there will no longer be restrictions on the number of houses purchased. shenzhen officials announced that families and adult singles who are not registered residents of the city are limited to purchasing one house in core areas such as futian, luohu, and nanshan. they are required to provide proof of continuous payment of personal income tax or social insurance in the city one year before the date of purchase. other areas do not require it. provide personal income tax or social security certificate. shanghai official announcement: for families and single persons who are not registered residents of the city and purchase housing outside the outer ring road, the number of years required to pay social insurance or personal income tax for the purchase of a house will be adjusted to one year or more of continuous payment before the date of purchase; the interest rate of existing mortgage loans will be reduced ; reduce the down payment ratio for second homes to 15%; adjust the value-added tax exemption period for individual external sales of housing from 5 years to 2 years.
we judge that first-tier cities serve as vanes and will continue to increase new policies based on the situation until the property market "stops falling and stabilizes."
on september 29, the central bank of china, together with the state administration of financial supervision, issued four financial support real estate policies: 1. announcement of the people's bank of china on improving the interest rate pricing mechanism for commercial personal housing loans ("people's bank of china announcement [2024] no. 11" ) and answered reporters’ questions; 2. “notice of the people’s bank of china and the state administration of financial supervision on optimizing the minimum down payment ratio for personal housing loans”; 3. “notice of the general office of the people’s bank of china on optimizing relevant requirements for affordable housing refinancing” "; 4. "notice of the people's bank of china and the state administration of financial supervision on extending the period of some real estate financial policies." in addition, the market interest rate pricing self-discipline mechanism issued the "initiative on batch adjustment of existing mortgage interest rates" on the same day; major commercial banks such as industrial and agricultural china construction bank issued announcements to lower existing mortgage interest rates.
to put it simply, in addition to a one-time reduction in existing mortgage interest rates to bring them in line with new mortgage rates, a mechanism for dynamically adjusting existing mortgage interest rates will be established so that old mortgage interest rates can be dynamically lowered in a timely manner in the future. the current stock of mortgage loans is rmb 23 trillion. this reduction will save home buyers rmb 170 billion in interest payments. it can be described as good governance.
2. unprecedented intensity, the 926 politburo meeting delivered eight major signals
on september 26, a meeting of the political bureau of the central committee was held. large-scale economic stimulus policies are about to be launched, and their intensity is unprecedented in recent years. this highest-level meeting conveyed eight major signals: first, the overall tone was very positive, emphasizing increasing efforts; second, fiscal and monetary policies emphasized increasing efforts; third, real estate emphasized promoting the stop of decline and stabilization; fourth, vigorous promotion of revitalize the capital market; the fifth is to adjust the consumption structure and promote investment; the sixth is to launch supporting policies to promote childbirth and improve the elderly care industry; the seventh is to help private enterprises tide over difficulties; the eighth is to protect people's livelihood, give priority to employment, and ensure the employment of key groups such as college students.
the political bureau's economic situation analysis meeting is usually held in april, july, october and december, but this time it was held in september, which is unusual.
in terms of tone, the meeting emphasized that there are some new situations and problems in the current economic operation. it is necessary to view the current economic situation comprehensively, objectively and calmly, face difficulties squarely, strengthen confidence, and effectively enhance the sense of responsibility and urgency to do a good job in economic work. it is necessary to seize key points and take proactive actions to effectively implement existing policies, step up efforts to launch incremental policies, further improve the pertinence and effectiveness of policy measures, and strive to complete the annual economic and social development goals and tasks.
at the implementation level, the meeting proposed "three distinctions": to distinguish mistakes and mistakes made by cadres due to lack of experience and trialling beforehand in promoting reforms, from knowing and intentional violations of disciplines and laws; to distinguish exploratory activities that have no clear restrictions; errors and mistakes in experiments should be distinguished from disciplinary and illegal acts that continue to go on despite being expressly prohibited; unintentional mistakes to promote development should be distinguished from disciplinary and illegal acts that seek personal gain.
in terms of macro policies, the meeting requested: we must increase the counter-cyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures, and effectively do a good job in the "three guarantees" work at the grassroots level. it is necessary to issue and make good use of ultra-long-term special treasury bonds and local government special bonds to better play the driving role of government investment. it is necessary to lower the deposit reserve ratio and implement a strong interest rate cut.
the first priority of the real estate policy is to "stop the decline and return to stability": to promote the real estate market to stop the decline and return to stability, we must strictly control the increment, optimize the stock, improve the quality of commercial housing construction, increase the intensity of loans for "white list" projects, and support the revitalization of idle stock. land. it is necessary to respond to the concerns of the masses, adjust the housing purchase restriction policy, reduce the interest rate of existing mortgage loans, speed up the improvement of land, fiscal and taxation, banking and other policies, and promote the construction of a new model of real estate development.
the capital market requires vigorous stimulation: efforts should be made to stimulate the capital market, vigorously guide medium and long-term funds to enter the market, and open up the blocking points for social security, insurance, financial management and other funds to enter the market. it is necessary to support mergers, acquisitions and reorganizations of listed companies, steadily promote the reform of public funds, and study and introduce policies and measures to protect small and medium-sized investors.
private enterprises are required to promote vitality: to help enterprises tide over difficulties and further standardize enterprise-related law enforcement and regulatory behaviors. it is necessary to introduce a private economy promotion law to create a good environment for the development of the non-public economy.
finally, the meeting requested that "we should take the lead and unite as one"!
3. the "one bank, one bureau, one meeting" press conference on september 24 kicked off the large-scale economic stimulus plan.
on september 24, the state council information office held a press conference. "one bank, one bureau, one meeting" launched a package of aggregate, real estate and capital market policies. monetary policy focused on amplifying the measures, with a larger reduction in reserve requirements and interest rates, and strong support for the capital market. in response to the situation and public appeals, we will lower existing mortgage interest rates and go all out to strengthen the economy.
a substantial 50bp reduction in reserve requirements will release one trillion base currency liquidity. governor pan gongsheng emphasized that “based on the situation in the first three months of the end of the year, it is possible to further reduce it by 0.25-0.5 percentage points.” this rrr cut is expected to reduce the capital costs of financial institutions by rmb 109.2 billion per year, directly increase the available funds of banks, effectively alleviate the pressure on banks' liability side and net interest margin, and enhance banks' ability to support the real economy and mitigate risks.
interest rates were cut across the board, and omo, reverse repurchase, mlf, lpr and deposit rates fell simultaneously. release signals of stable growth, reduce financing costs, and boost confidence. because the stock market is so hot, some bank customers have recently given up their interest on large deposit certificates and withdrawn them for investment.
commercial personal housing loans at the national level no longer distinguish between first and second homes. the minimum down payment ratio is unified at 15%, and the down payment ratio has reached a record low. the reduction in the down payment ratio directly alleviates the pressure on the amount of down payment for home purchases.
optimizing the re-loan policy for affordable housing and increasing the proportion of financial support from the people's bank of china in the re-loan policy for affordable housing from 60% to 100% is another reinforcement of the 517 real estate new deal. on may 17, the central bank announced that it plans to set up a 300 billion yuan affordable housing re-loan to acquire completed and unsold commercial buildings and use them as affordable housing. the central bank will issue re-loans based on 60% of the loan principal. this increase to 100% will help strengthen market incentives for banks and acquisition entities and accelerate the destocking of commercial housing.
to boost confidence in the stock market, stabilization funds are about to be launched and two innovative monetary policy tools will be created. "funds can only be used to invest in the stock market." first, swap facilities for securities, funds, and insurance companies. in terms of method, institutions use their holdings of bonds, stock etfs, shanghai and shenzhen 300 constituent stocks and other assets as collateral to exchange high-liquid assets such as treasury bonds and central bank bills from the central bank. the funds obtained can only be used to invest in the stock market. in terms of intensity, the initial operation scale is 500 billion yuan, and the scale will be expanded to 1-1.5 trillion yuan depending on the situation. the second is stock buyback, increase in holdings and re-loans. in terms of form, commercial banks provide loans to listed companies and major shareholders for the purpose of repurchasing and increasing their holdings of shares of listed companies. in terms of intensity, the central bank will issue re-loans to commercial banks, with a financial support ratio of 100% and a re-loan interest rate of 1.75%. the interest rate on loans issued by commercial banks to customers is around 2.25%, which is a relatively low interest rate. the initial operation scale is 300 billion yuan, and the scale can be expanded to 0.6-0.9 trillion yuan depending on the situation. the new tool will further increase the popularity of a-share buybacks.
chairman wu qing of the china securities regulatory commission said: "the china securities regulatory commission will work with relevant parties to further support central huijin's arrangements to increase its holdings and expand its investment scope, and promote various medium and long-term funds, including central huijin's, to invest in the stock market." "stabilization funds are being studied."
four, three points of deployment, seven points of implementation, the most important thing is to "take the lead"!
in recent years, our country has made great progress in the fields of new infrastructure, new energy, and new productivity, occupying a leading position in the world. at the same time, it has achieved positive results in controlling housing prices, deleveraging, cleaning up local debt, etc., and has resolved real estate bubbles and financial risks, so as to great determination and courage have solved many long-term historical problems that have been difficult to solve, laying a solid foundation for sustainable and high-quality development.
but at the same time, major changes have not been seen in a century. in recent years, our great motherland has indeed faced complex and severe internal and external challenges: sino-us trade friction in 2018, the epidemic in 2020, real estate adjustment in 2021, and the economic downturn since 2023. the ongoing slowdown affects the lives of hundreds of millions of people.
the latest released data shows that domestic demand, which is mainly represented by exports, consumption and investment among the troika, has basically zero growth; ppi has been experiencing negative growth for more than 20 consecutive months, facing a deflation-debt cycle trap; companies are afraid to invest, and residents are saving as precautionary measures; land finance the collapse, local non-tax revenue soared, and large amounts of arrears for corporate project payments; the stock market and property market continued to plummet, and residents' assets shrank severely; the wave of layoffs and salary cuts caused the entire society to be full of anxiety.
the above-mentioned difficulties are caused by low confidence and insufficient domestic demand. the main reasons for the lack of domestic demand are the continued decline of the real estate market, the large amount of funds occupied by local government debt, and the fact that some austerity measures have not been withdrawn or even increased step by step.
as the real estate bubble has been significantly deflated, financial leverage has dropped significantly, and the federal reserve has begun an interest rate cut cycle, which has provided favorable conditions for adjustments to fiscal and monetary policies, it is now a critical time window to launch large-scale economic stimulus measures and measures to boost market confidence.
this time, not only are the words in the document inspiring and the determination vivid on the paper, but the key behind it is the introduction and implementation of policies that are accessible to the people.
whether specific policies can be implemented, whether they are sustainable, and whether they can be felt by businesses and the people, the focus is on subsequent implementation. this is my cold reflection on the situation, and it is also a concern that many entrepreneurs have shared with me. we have issued many documents in the past, but then nothing happened. we look forward to launching a large-scale stimulus measure worth rmb 10 trillion this time to boost confidence, so that we can truly achieve a bottom-line from policy, market and economy, and promote sustained economic recovery. if the follow-up policies are not implemented as expected, it will once again dampen market confidence and make it difficult for the economy to bottom out.
the scale of the package of measures to boost market confidence should be more than 10 trillion, including localized debt, new infrastructure projects, consumption subsidies, maternity subsidies, housing bank collection and storage, etc., and the use of special treasury bonds, ultra-long-term treasury bonds, central bank re-loans and other tools. the scale should be large, the capital cost should be low, and the people's sense of gain should be strong.
when the country is in trouble, we miss our good generals, and when times are tough, we miss our loyal ministers. as an ordinary economics researcher, he has a humble position and dares not to worry about the country. he has done economic situation analysis for more than 20 years. he has previously made suggestions for "new infrastructure", "liberalizing the three children", "new energy" and "protecting the vitality of the private economy". launch large-scale economic stimulus measures."
recently, i have deeply felt that the top priority is to go all out to fight for the economy, and development is the fundamental solution to all problems. good economic growth and employment are the foundation for coping with the us strategic containment, the guarantee for realizing a better life for the people, and the cornerstone for high-quality development.
i am an incorrigible long-term rational optimist because of the depth of our love for this land. no one can get rich by shorting his own country. the more critical the moment, the more important it is to stand with her. the top is based on reason and the bottom is based on faith.
as long as we put development as our top priority and priority, focus on economic construction, and go all out for the economy, china's economy is expected to lead the world again. as long as we respect economic laws and common sense, seek truth from facts, we firmly believe that the dawn is ahead. i believe that if we all work together, we will be able to overcome the difficulties together.
if we can respond to the voice of society, follow the good news, launch large-scale economic stimulus measures, and strengthen the protection of the private economy, we can expect a "rise in the east and a fall in the west". "a fall in the west" refers to the u.s. economy moving from overheating to recession, and the decline of u.s. dollar assets; "rise in the east" "it means that china's economy has restarted recovery and regained its glory, and chinese assets are once again sought after by the world.
there are still the last three months of 2024. although the road of life often encounters darkness, the yearning for light guides us to move forward bravely. dark clouds will not always cover the sun, darkness will always give way to dawn.
no one can extinguish the stars in the sky, but a single spark can start a prairie fire. although we face various difficulties and obstacles, we still choose to climb upward.
if we have upright faith and righteous thoughts and persist in doing the right things in the long term, god will take care of us.