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Monetary policy adjustment will not be implemented until December 5, but it does not prevent it from triggering a wave of public opinion and sentiment in various fields of China's economy in advance, especially in the stock market and real estate fields. Various interpretations and analysis, including some views that seem to be "money has arrived" for granted.
There is no doubt that the central bank’s reserve requirement cut is a major event, and the popularity and attention are reasonable. Of course, it is also a bit impetuous, so I won’t talk about the effect. Anyway, there are some restless market public opinion reactions. In addition to the popularity of the news of the reduction of reserve requirement ratio, in China's economic environment, there is another incident that is not very popular and not paying enough attention, but also has very important attention:
The scene that all Chinese people are least willing to see still happened. On the one hand, the city people eat more than ten yuan per kilogram of high-priced vegetables every day, and on the other hand, farmers who have been busy for a year have had to destroy the vegetables they have worked hard to grow with their own hands.
Just recently, the incident of farmers in Cao County, Shandong Province destroying nearly 100,000 kilograms of vegetables has caused heartache across the Internet. You should know what the concept of 100,000 kilograms of vegetables is. Not to mention that if you only sell one dollar per kilogram in terms of economy, you have to have a 100,000 yuan. Just looking at the value of these dishes itself is very uncomfortable.
Farmers' Daily published an article entitled "Why do farmers destroy vegetables? Don't let 'increase' hurt farmers."
In fact, you can probably know what the article is talking about:
A farmer in Cao County, Shandong Province encountered "difficulty in selling celery" caused controversy on the Internet. The farmer looked down at the plowed land and calculated that nearly 100,000 kilograms of vegetables were destroyed like this, and the scene was heartbreaking.
Image source: Internet
Two economic trends of one hot and one cold actually reveal many substantive issues and keys to China's current real economic environment. The article
will review and review these two important trends based on a well-founded basis, explore the essence, and conduct an attitude, in-depth and professional in-depth discussion and analysis on some core issues and contradictions that the Chinese economy is facing at present.
Pay attention to trends, grasp the essence, see the main line clearly, analyze trends, and guide actions.
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1
From the perspective that few people can see, analyze the second central bank cut in 2022: What are the hidden meanings?
After the central bank's second reserve requirement cut this year was implemented, the real estate and financial media were in jubilation, and I felt that everyone was impatient for the next real estate market and A shares on Monday.
does not mean to pour cold water or sing a counter-tune, but I wonder if you have noticed the wording of the central bank in the subsequent answers to reporters' questions - not to flood the market.
You should know that comprehensive reserve requirement ratio cuts are a typical demand-side total control tool - once the reserve ratio drops, all market entities will be affected, and they have nothing to do with structure and precise regulation.
So, why do the central bank make a conflict and make a statement?
Reservoir reduction is a release of money on the market. The reserve ratio has been reduced, and banks and financial institutions can call more positions. Not to mention heavy losses, it should be adding water, right?
There is also. In the past (except this year) the reserve requirement ratio cut was mostly 0.5%, or even 1%, but this time it was only 0.25%. Why is this?
Is the economic situation tense? If you are nervous, why should you reduce the reserve requirement ratio? If you are not nervous, why should you reduce the reserve requirement ratio? If you are not nervous, why should you reduce it so quickly?
So, in addition to the news of the central bank's reserve requirement ratio cut, there are many things worth pondering. It is crucial to understand the "impermeability" of the central bank's landing trend of the reserve requirement ratio cut this time.
First of all, this reserve requirement ratio cut has an important background that has been ignored by the market and all parties. Of course, such neglect may also be deliberate. That is, since November 2022, China's bond market has undergone a significant adjustment, directly breaking out of the smell of a financial crisis, which has directly touched the bottom line of the regulatory authorities.
The new asset management regulations will be officially implemented in January this year. According to regulations, it is normal for bank net value products to fluctuate.
But after this sharp drop, regulators and various official media did not regard it as a good case of breaking the rigid guarantee, but instead came out for psychological massage.
Bank low-risk financial management and various types of bond funds with bond as the main investment targets have a sharp drop in the impact on the stability of the economic environment, which is not a joke:
On the one hand, large funds abide by laws and regulations in China's economic environment, and cannot find any safe and stable targets. This impact is very bad and will directly increase the momentum of China's domestic capital to escape;
On the other hand, the expectation of a downward trend in the bond market has been formed, and even the trend of stampedement and cash out in the short term has been formed. If it is not curbed, once a scale effect is formed, it will cause uncontrollable risks to the stable environment of China's economy and currency.
Therefore, the purpose of the central bank's reserve requirement ratio cut this time may be to stabilize the bond market and adjust the bond market expectations.
is not a real estate market or a financial market, but a bond market.
Secondly, the name of a comprehensive reduction in reserve requirement ratio is greater than the reality.
mentioned above that there is a conflict between "not flooding" and the comprehensive reduction of reserve requirement ratio. So why does the central bank still "will do it alone"?
Because the central bank is just using the reserve requirement ratio cut to mobilize expectations, he did not think that it would use it to solve the problem.
You can see that this time the central bank's comprehensive reserve requirement ratio cut only 0.25%, lower than the commonly used 0.5% and 1% in history.
This means that reducing the reserve requirement ratio cannot solve the problems of the real economy and small and medium-sized enterprises. The central bank is only providing a relaxed environment for various work measures. The main work also depends on the following supply-side departments.
must be for the sake of expectations, but also not flooding the market. The flooding is the best demand-side option that the central bank can do.
The current situation is, to some extent, the central bank is a slowdown strategy.
credit port is not loose, which is a typical drug that is not correct. In industries that really need financial support, small and medium-sized enterprises, and individual business units, the problem faced is that they cannot get loans? Is the interest rate too high?
is afraid that the door cannot be opened. But can all kinds of economic and commercial activities be carried out when opening the door and doing business? Can financial departments like the central bank decide?
In fact, is the real problem of China's current economy a problem of insufficient money?
is not, it is a liquidity issue, but from the perspective of the central bank, it can only do what it can within its power.
See the essence clearly: The loose monetary policy is not a good medicine for the right symptom, it is just analgesics, which can only delay and conceal the problem.
people are in the desert, rich, lacking water and food, and more money. Is it just the stimulation and expected effects? How many financial media and real estate media are there to put it on the table?
Image source: Toutiao Gallery
2
Farmers are helpless in destroying grain: a key and dangerous economic signal?
Farmers in Cao County, Shandong Province destroyed more than 100,000 kilograms of vegetables in the field and then plowed the land.
The reason is the "logistics intestinal obstruction" that has been added layer by layer. Any trucks coming from other places to pick up vegetables must be reported three days in advance, while trucks from Zhengzhou and the five northwest provinces cannot pass even if they report in advance;
Local trucks have to pick up vegetables and go out, and even if they do not pass through the risk area, they must be quarantined at home for seven days after returning home.
So, in winter, it is the time when vegetables are in short supply. On the one hand, it is difficult to find the county town to find vegetables that you want to sell than climbing the sky, but the season does not wait for people. The vegetables are rotten in the ground, and the ground needs to be rotated, so they can only be destroyed;
On the other hand, consumers are under high prices and six wallets are hollowed out.
This time, various official media have spoken out, condemning this phenomenon of "logistics intestinal obstruction" that has been increased at all levels, and have brought out 20 of these weapons, questioning whether the local government has violated 20 items? Is it "increasing the investment in harming farmers"?
Image source: Internet
Image source: Internet
The Ministry of Transport once clarified the requirement of "take and chase" for trucks.
Simply put, when the truck comes to transport vegetables, the driver only needs to collect nucleic acid samples and continue moving forward, without even waiting for nucleic acid results. Not to mention that just because it is a "outsider car", we must treat it differently and approve it at all levels.
However, various places have distorted and increased their investments in the implementation, causing truck drivers to die. What is the reason?
Because at this time the Ministry of Transport said nothing, everything must make way for prevention and control.
has been added, and at most it is to criticize me. The harm to myself is the least. The vegetables are rotten in the field, and the losses are from others and not mine. Once I don’t increase the price, I can’t afford to take care of it if I have any problems. What should I do, anyone can settle the account. Local officials are also activists, and they must seek benefits and avoid harm, and pursue stability and maximization of their own interests. The way they go is destined. The hardship is the farmers, and they lost all their money in the production season.
Anyone with a normal view should understand what it means to farmers to destroy vegetables and flat ground.
mass destruction of materials means at any time, it means that supply is reduced, wealth is destroyed, and people become poor, which is an extremely ominous sign for the economy.
In the eyes of some stupid economists and historians, it is "overcapacity", so "black-hearted capitalists" would rather "pour milk" than let the hungry people fill their stomachs.
This time, the phenomenon of destroying vegetables and flat ground in China is essentially completely different from pouring milk during the Western economic crisis, and it is not the same thing. If someone dares to link these two things together, one counts the other and reports it directly, it will be simply ulterior motives and obvious malicious intentions.
From the basic logic of economic operation, this time, the incident of Caoxian farmers destroying 100,000 kilograms of vegetables is essentially an economic production activity, which has been destroyed by external forces.
production was destroyed, except for natural disaster , which is always the result of interventionism, without exception.
If anyone says that the so-called overproduction and the economic crisis of are inherent flaws of capitalism , it can only mean that he is talking nonsense and talking nonsense with his eyes open.
China is not a capitalist country. The economic crisis of capitalist countries is blatant. The purpose of the milk pouring campaign is to pursue the marketing activities of capitalists, and to convey the expectation of sparse milk to the market, so that prices can be increased. Otherwise, secretly falling silently will not become a classic case of economic crisis, right?
Farmers are helpless in destroying vegetables and flattening the ground. In China's economic environment, it is a very critical and dangerous economic signal.
Just imagine, if the problem is not a vegetable planting industry, but many industries, what is the result?
Factory collapses, industry depression, supply shortage, wages decline, prices rise, workers unemployed... Unfortunately, this is exactly what we are facing now. The reason why it can last for a long time is that the huge capital accumulated by reform and opening up in 40 years can withstand such consumption, but if this continues, the landlords will have no surplus food.
believes that this matter will surely arouse vigilance and attention from the national and top-level designs, and it is worth waiting and seeing.
If the trend of production damage spreads and continues, it is unimaginable.
If the production activities and market circulation of the farmers with the foundation of China's economy cannot be guaranteed, then such treatment is above all economic activities and is an inevitable trend.
This time, I speak out for the Chinese farmers.
Image source: Toutiao Library
3
Trend analysis: China's economic system, unprecedented expectations for the solution of core problems
first look at the actual situation and conduct a systematic review and review:
November the epidemic in various places again. As of November 25, there are 2,784 confirmed cases in Beijing, 2,542 confirmed cases in Henan, 10,735 confirmed cases in Guangdong, 7,605 new asymptomatic cases, 2,460 confirmed cases in Chongqing, and 6,242 new asymptomatic cases. The repeated epidemic situation has led to a certain impact on the supply chain after the relaxation of regulations, and residents' income and consumption have also been affected.
Since October, the downward pressure on the economy has increased significantly. October PMI data fell into the contraction range, financial data fell sharply beyond expectations, export data turned negative for the first time in the past two years, fixed asset investment cumulative year-on-year growth rate declined, real estate investment is still the main drag, and consumption recovery has not been seen, so there is a need for support for loose currency.
Recently, there has been a wave of redemption of bonds and financial products, and the bond market has ushered in a sharp drop. As of November 17, of the 40,562 bank wealth management products, 1,995 bank wealth management products broke their net value, with a net rate of 4.92%. Such problems are related to the rapid development of bank wealth management subsidiaries in recent years and the net value transformation of wealth management product valuation methods. However, there are also related to the recent rise in economic recovery expectations and the marginal tightening of liquidity. Net value callback to triggers redemption, and redemption mostly triggers asset sell-offs, further aggravated the decline in net value, and increased the redemption volume, forming a negative feedback . The central bank's reserve requirement cut this time can deal with liquidity issues in the bond market.
Overseas interest rate hikes slight weakening of the constraining effect of my country's monetary policy. Fed has raised interest rates recently, and although the terminal interest rate target has been raised, the US CPI in October was only 7.7% year-on-year, coupled with the rising expectations of US recession, 50BP rate hike in December is a high probability event.
Currently, the market mainly focuses on two major influencing factors, one is the adjustment of public health policies; the other is whether real estate capacity is restored.
The former can release economic vitality and liberate demand, while the latter can stabilize the fundamentals of economic and financial , which is indispensable.
The economy is twisted and the frequent occurrence of various magical times. The epidemic is a key factor. After all, the epidemic has affected everyone's confidence.
has now undergone subtle changes.
There seems to be differences between the country and the local government. Now I am waiting for this difference to be eliminated. The rice is eaten one bite at a time, so I can’t hurry up.What to do next for
? The title has given the answer: China's economic system, unprecedented expectations for the solution of core problems.
Carefully optimistic and wait for the flowers to bloom. This level of game and dredging tests the country's management wisdom.
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at the end:
Based on reality, from the perspective of economic relations and business logic, share a few personal views
0 Reducing the reserve requirement ratio is definitely a good thing, but you cannot turn a blind eye to the twisted and blocked reality in the economic environment.
The analysis article that should be done is already well said. To be honest, writing such content is a very stressful and challenging thing.
At the end of the article, I share a few personal opinions, which may not be correct. Just use it as a throw-in and attracting jade for readers and friends to discuss and refer to:
1. The reduction of the reserve requirement ratio must be a good thing for the current economic environment of China, and there is no controversy.
When the water level in the pool increases, the pressure will increase. The water pressure is large enough to break through the obstacles.
Even if it cannot be rinsed, once the central bank cleanses the outlet hole, isn’t it just flooding?
and before the outlet hole is cleaned, the central bank may continue to release water into the pool.
This may also be an emergency idea for national economic management, so you must understand and understand the country's original intentions accurately.
2, epidemic control is a key consideration variable for all current economic activities and capital allocation.
The topic of epidemic control will not be discussed. In fact, the deep-seated issues of game and interests, human nature, management, etc. cannot cause qualitative changes in the short term.
Therefore, for individuals and economic individuals, it is very necessary to maintain rationality and caution and live within their means.
can only talk about this, just be careful with the kindness between the lines.
or above is an in-depth analysis and interpretation of the two important trends in China's economic environment since November 2022, and exchange and share with all readers and friends.
Have good thoughts and make good relationships.
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According to the latest regulations of relevant national departments, the content and opinions of this article are for reference only and do not constitute any clear suggestions on property purchase, investment, etc., and the risks of entering the market are at their own risk. )
or above text, from @Panda Beibei Little Cute
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