The Market Should Not Be Too Pessimistic About China's Economy This Year.

Premier Wen Jiabao (14) Real estate regulation The unspoken speech shocked the domestic stock market. On the morning of 14, the Chinese stock market was also in high spirits. In the afternoon, there was a diving, the Shanghai Composite Index fell more than 2%, and the 15 day continued to decline for 14 days.

The panic in the stock market reflects the current market mentality. Many market participants believe that the decisive determination of Premier Wen's speech means that this year's domestic macro-control will also be strengthened, and real estate regulation will also tighten. This year's slowdown in China's economic growth may be beyond imagination. For investors, this macro background undoubtedly means that investment opportunities are slim and prospects are pessimistic. As we have said in our 14 day financial analysis, the policy of tightening macro-control has hinted that the current slowdown in China's economy will not only frighten the Chinese stock market, but also lead to panic in foreign investment in the Chinese market, and even lead to massive outflow of capital.

Is it really so pessimistic about China's economic situation this year? In our view, although the Prime Minister of People's Republic of China has issued a strict command of real estate, the judgement of the economic situation and policy trend still needs to be analyzed calmly and objectively.

Based on a follow-up study of macro policy, ampong did not believe that China's macroeconomic policy will be fully tightened this year. Carefully scrutinize Premier Wen Jiabao's speech, in addition to the "price is far from returning to a reasonable price" this determination of the new position, there is no new and more stringent policy regulation and control information, in fact, the general idea is stressed that "regulation can not relax", rather than "all aspects of strengthening regulation and control." Looking back calmly, we can see that before the Ministry of housing, the Ministry of land and other ministries and senior officials have made a statement that does not relax the regulation of real estate, and is repeatedly stressed. That is to say, in the future, as long as we maintain the strength of the existing regulatory policies and do not relax the regulation of real estate, we will be in line with Premier Wen's spirit.

For this year's macro economy, Premier Wen also wants to give the market a reassurance. China's total economic volume has reached 47 trillion yuan. Even if the economy of such a scale is slowing down to 7.5%, it is also a very substantial increment. The Ampang research team roughly estimated that the increment of GDP in one year will reach more than 3.5 billion. Premier Wen also emphasized that this is to link up with the growth target set by the "12th Five-Year plan", and most importantly, this is the growth rate under China's active regulation. It should also be emphasized that real estate regulation is part of China's structural adjustment. This adjustment is part of the principle of "maintaining pressure" and should not be equated with the overall economic contraction.

In 2012, the balance between "inflation suppression" and "growth protection" pursued by China's macroeconomic policy is tilting towards "maintaining growth". This judgement is still true. Especially when the price increase slowed down (CPI was only 3.2% in February) and the external demand decreased, the foreign trade deficit increased sharply. The Chinese government would not allow the economic growth to stall.

The operation of the economy is unique in terms of electricity consumption. National Energy Board Electricity consumption figures were released 1-2 months ago. In February, the total electricity consumption of the whole society was 386 billion 300 million kwh, an increase of 22.9% over the same period last year. The total electricity consumption in the whole society increased by 6.5% in 1-2 months. Some analysts believe that electricity consumption data from 1 to February dropped by nearly 6 percentage points over the same period last year, reflecting the obvious slowdown in real economic growth. However, considering the seasonal factors, the change of electricity consumption is indeed worth noting. But the data in the first two months are still difficult to reflect the situation of the whole year. Therefore, it is necessary to observe whether the growth of electricity consumption is slowing down or even negative.

In addition to the Ampang research team, a few analysts also believe that China's economic growth is not a worry. Although China has lowered its annual economic growth target to 7.5% for the first time in many years, Deutsche Bank has raised its forecast of China's growth rate from 8.3% to 8.6% in 2012, which has raised the forecast of China's export growth from 8% to 13%. Ma Jun, chief economist of Deutsche Bank, said recently that the increase was mainly based on three factors: the expected growth rate of us and Japan growth rate this year, the rise of China's export orders index, the improvement of China's small business and the weaker impact of the real estate industry's cooling on China's economy.

2012 China's economy Growth is bound to slow down, but continuing to tighten regulation is not the whole of the current macroeconomic policy. We expect that the outlook for China's economy will still be impressive this year, with a growth rate of over 8.5%. The soul of the domestic stock market is shattered and needs to return to the rational state. The market should not be too pessimistic for China's economy in the 2012.