confidence: interpreting key data from the week on china’s economy
2024-10-02
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september 30th witnessed a historical record for the chinese economy. at the close of trading on september 30, 2024, a-share transactions exceeded 2.6 trillion yuan throughout the day, a record high.
in fact, this fiery situation has lasted for nearly a week. in the past week, changes in china's economy, especially those in the capital market, have attracted widespread attention.
master tan conducted a big data analysis on the "chinese economy"-related discussions on social media platforms in the past week and got such a picture.
as can be seen from this graph, the public opinion field's discussion of "china's economy" has experienced two peaks in the past week. among them, the frequency of the word "confidence" has experienced two jumps.
behind the rising confidence in public opinion, what changes are taking place in china's economy?
through thematic analysis of text content, we can see that the focus of discussions on social media platforms in the past week roughly includes the following contents:
among them, the group of words that co-occur most often with the word "confidence" is"politicalpolicy, currency, investors, markets, fiscal policy”。
these co-occurring relationships show a clear path of increased public opinion confidence in the past week:
the policy effectiveness is transmitted to the market, stimulating the activity of market entities and stimulating investment and consumption.
“exceeded expectations”, has become a high-frequency word in many market research reports.
however, some foreign media also raised questions in their reports: china suddenly "amplified its moves" and the transmission speed was so fast. how sustainable is it?
to understand this problem, we can first look at one word from the political bureau meeting of the central committee of the communist party of china on september 26 - face up to difficulties.
in fact, the word "difficulty" did not appear just this time. "difficulty" was already mentioned at the central economic work conference at the end of 2023.
our research on difficulties is long-term and continuous, and our ideas for solving difficulties are also long-term and systematic. we never just focus on the immediate future.
dong yu from the china development planning institute of tsinghua university told mr. tan: our analysis and planning of the economic situation are always in progress.
the communiqué of the third plenary session of the 20th central committee of the communist party of china, in its analysis of the current situation, clearly mentioned the need to implement macro policies in accordance with the party central committee’s decisions and arrangements on economic work.
the political bureau meeting held on july 30 made more specific arrangements:macroeconomic policies must continue to be vigorous and more powerful.after this, it is specifically mentioned thatreserve early and launch a batch of incremental policy measures in a timely manner。
from the beginning of the year to july, the national consumer price (cpi), an important reference indicator for macroeconomic policies, gradually returned to the positive trend from the negative growth range. after two declines in february-march and may-june, it began to show a continuous upward trend. trend.
the stabilization and recovery of the economy is hard-won. how to grasp this key node and turn the signs of upward trend into the momentum of upward breakthrough?
the answer was given at the politburo meeting in september. the meeting proposed the direction of more vigorous macroeconomic policies. it is precisely because the existing policies have created a positive momentum in fundamentals that the market has the basis for rapid feedback on a new round of policies in september.
the more we look at economic issues from a long-term perspective and systematically, the more accurate and effective the timing of our actions will be.
after understanding china's long-term and systematic thinking in dealing with difficulties and challenges, it will be even clearer to answer the question of whether this policy is sustainable.
this kind of systematic thinking is also very clear in the recent policy "combination boxing" process.
the reason why the "combination boxing" first launched its efforts in the financial field was analyzed by dong yu and tan zhu, who have participated in policy formulation and research for many years:
the political bureau meeting of the central committee on september 26 mentioned eight words, "grasp the key points and take the initiative." the most important thing in economic work is to grasp the main contradiction, and the main contradiction now is insufficient demand. to resolve this contradiction, we must realize that "the economy is a chain" and is the result of the interaction of multiple fields. similarly, to solve the problems, we must launch a policy "combination punch". this time, the unexpected moves in the financial sector are an important punch.
compared with other fields, the financial field has a relatively strong transmission mechanism, so it can first use this field and feedback from the capital market to leverage the expected effective recovery in various fields.
monetary policy is the prelude, but what really made market confidence jump again and continue was the meeting of the political bureau of the central committee on september 26 that clearly laid out the next series of arrangements.
dong yu told master tan:
the meeting of the political bureau of the cpc central committee gave the most critical signal for market confidence and clearly conveyed our firm determination to stimulate economic recovery.
this determination is evident from the press release of the political bureau meeting on september 26. from increasing the counter-cyclical adjustment of fiscal and monetary policies to helping enterprises tide over difficulties, to safeguarding the bottom line of people's livelihood, adequate arrangements have been made in all dimensions. the signal is clear and the measures are very practical and specific.
in dong yu's view, the timing, intensity, and results of this macroeconomic policy are all outstanding and iconic in macroeconomic control in the past. moreover, the revelation it brings cannot be ignored. in the future, how to achieve better expected guidance in the macroeconomy and what measures can be taken to solve problems to bring about better results are all things that need to be further explored in macroeconomic regulation.
some people say that in the past week we have increased our confidence in the chinese economy. but what master tan wants to say is that we have always had confidence in the chinese economy.
as stated at the meeting of the political bureau of the cpc central committee,we must look at the current economic situation comprehensively, objectively and calmly, face up to difficulties and strengthen our confidence.
