On February 24, 2022, with the Russian President Putin announcing a special military operation in the Donbas region in eastern Ukraine, the conflict situation in Russia and Ukraine, which began to be brewed in the second half of 2021, finally turned into a formal modern war. The smoke of gunpowder ignited, breaking the global peace since World War II and completely setting off a new round of war storm of great powers.
Modern warfare is very efficient. War is the continuation of politics and the ultimate means. With the continuation of the Russian-Ukrainian war, the game of interests of all parties behind the war has become increasingly clear.
Many people do not realize that under the background of such an era, under the extreme war environment with direct impact and influence on the global finance, assets, and wealth fields, it is a very valuable examination of asset value and clearly see the security of assets, including once-in-a-lifetime investment opportunities and space.
War is a game of burning money. It is not just that it is natural burning. It is the kind of high-efficiency burning that splashes gasoline and turns on the blower next to it. In the current era of economic globalization, people always need to pay for the consumption of war. After all, debt will never disappear, it will only be transferred.
Modern war has brought impacts to the global financial, asset and wealth fields. Global capital flows, seeking profits and avoiding harm, and chasing profits. In this case, it is also an extreme test of the value of various assets. This is equivalent to the times providing an excellent stage for asset value verification. The price bubbles blown out in the peaceful and stable stage burst rapidly, and the underlying assets that truly have hedging attributes will surge and distort again.
So, in such a rare stage of asset value verification, from the perspective of China's economic environment and value context, what assets in China will usher in opportunities and proof of value in the times?
1
Under the impact of modern war, RMB assets unexpectedly became the darling of safe-haven capital
Capital aversion to risks, capital is always seeking profit. When facing the extreme threat of war, capital will inevitably vote with its feet, escape the world, and seek risk aversion.
Since the Russian-Ukrainian conflict in 2022, due to capital hedging, different assets around the world have completely different value trends under the vote of real capital.
What kind of gold, oil, and bulk raw materials have skyrocketed all the way, it is no secret, but after all, there is a distance from individuals in the Chinese economic environment. If you can see and touch the opportunity, it is not an opportunity. However, in this round of test of asset value, the performance of RMB assets in global asset categories is very worthy of attention.
Geo-war conflicts, global capital flows intensify. In 2022, China's RMB has become a safe-haven currency, and the assets anchored by the RMB have become a safe-haven asset.
Of course, this is inseparable from the fact that China has maintained strong economic growth and achieved its rise after it has survived several rounds of siege and blocked from trade, technology and finance in the United States. Wuchang 's status, resolute fight against the epidemic, and increasingly strong military construction are all invisible cores of RMB and RMB assets.
This momentum has been very obvious since 2021. The RMB has been strengthening in the international currency exchange rate market. Since 2021, especially after January 27, 2022 (that is the time point of the very obvious market stick in the figure below, which is the annual foreign exchange settlement calculation and the day of correction of data) The RMB's exchange rate has been out of the way. It can be said that it has been firm and strengthened, and it has risen crazy.
onshore RMB exchange rate trend (Picture source: Internet)
offshore RMB exchange rate trend (Picture source: Internet)
Of course, it is very necessary to use the global hard-to-wire US dollar to make a comparison. In 2021, on the basis of the US dollar rising by 6%, the RMB against the US dollar (hereinafter referred to as RMB exchange rate ) rose by 2.21%!
022 starts since the beginning of the year: US dollar index continues to rise 1.23% (as of February 28)
RMB rose 0.8% against the US dollar, and the RMB is still stronger than the US dollar, the king of foreign currencies!
strong currency, so the corresponding RMB assets will inevitably be strong at the same time. Because China has strict foreign exchange control rules, it mainly depends on the market. The liquidity and market performance is the situation of China's national bonds issuance to the world:
was driven by multiple positive factors such as China's economy's first recovery and the continuous appreciation of the RMB, but China's treasury bonds have attracted "rush to buy" from overseas institutions. Statistics recently released by China Bond Login show that as of the end of January 2021, the scale of bonds it custodial for overseas institutions has reached 3056.775 billion yuan, a year-on-year increase of 62.09%, up 5.96% compared with the end of last year.
On February 21, 2022, People's Bank of China successfully issued two RMB central bank notes in Hong Kong, including 10 billion yuan in 3-month central bank notes and 15 billion yuan in 1 year central bank notes, with winning rates of 2.50% and 2.70% respectively. The issuance is widely welcomed by overseas investors. Institutional investors such as banks, central banks, funds, insurance companies and other countries and regions, as well as international financial organizations, actively participated in the subscription. The total bidding volume was close to 60 billion yuan, about 2.4 times the issuance volume, indicating that RMB assets are highly attractive to overseas investors and also reflect the confidence of global investors in the Chinese economy.
Even the negative interest rate treasury bonds issued by China in 2020 were snatched by the European market:
treasury bonds for the euro zone were sold out once they were issued, and the supply was in short supply. The actual order transaction volume actually reached 18 billion euros, 4.5 times the planned issuance volume. From this, it is enough to see how eager European people are to a safe and stable investment environment.
All signals point to the RMB and the liquid assets anchored by the RMB. Global capital votes with its feet, and real money purchases prove this important definition.
2
Understand the dividends of rules and seize the opportunities of the times. How far is the value explosion period of China's bulk real estate?
From a simple perspective, any investment has actually only two key actions: timing and selection of stocks.
has fully used data and facts to prove that the RMB and RMB assets are sought after by global capital, but there must be a sense of tear, that is, in the domestic investment field in China, there has been a reverse market performance:
Chinese stocks and real estate, which are both RMB assets, have not performed well in China's economic environment in 2021.
The stock market needs no further. More than 90% of investors are losing money. It is not easy to make money in the Chinese stock market. Real estate is even worse. In the atmosphere of policy cities with three-pronged approach to finance, regulation and supervision, even housing prices in first-tier cities were so thwarted that they were afraid to move in 2021, let alone generally falling. Local governments have to introduce a decline restriction order to support many cities in the market.
021 is a difficult year for core asset value styles to drift in China's economic environment. With the preservation and appreciation of a large number of private capital and investment groups, the need to obtain property income is not met, and the external capital is sought after by RMB assets, the feeling of separation and dislocation will naturally appear.
In fact, these are the two key issues about investment at the beginning of this paragraph, namely, selection of funds and timing.
China's domestic RMB assets are undergoing a critical stage of China's economic structure adjustment and economic growth changing anchor. The underlying logic is not complicated:
. The stock market that fully implements the registration system , the overall index is spread and diverted by the increasing number of listed companies. The stock market has become a capital market for the state to regulate economically, intermittently pump water, and concentrate on major issues. If the country's demand for domestic liquid capital has not disappeared before, then there is no need to talk about the money-making effect. The sector rotation, the index is stable, and the tangible hand occupies absolutely dominance. The capital that is forced to enter contributes the momentum and solidifies and stabilizes.
Smart money will not go to such places, because capital has high requirements for liquidity and is trapped when entering the market. Although the financial harvesting efficiency is very high, there is probably no luck in the face of state capital.
Even Soros was beaten and abandoned. I am afraid that funds with a little investment ability must also be considered.
. Real estate in China is a policy industry related to the national finances. This essence is no longer a secret today. It is completely a matter of policy, and it depends on the policy attitude, and the profits and growth according to the face of the policy. Simply put, once you lose favor and your attitude changes, you will lose expectations and confidence. This is the most core and critical issue of China's real estate at present.
Investment and capital selection, there is no need to say more about judging the situation and distinguishing attitude. The same RMB assets, one overseas and the other domestic, the treatment, expectations, emotions, and performance are completely different, and the feeling of tearing will come?
From the perspective of both selection and timing, the two traditional investment channels, which are controlled by domestic economic policies and have long encountered economic structural adjustment, are undergoing a painful reshuffle stage, reducing leverage , squeezing bubbles, and removing risks, coupled with China's strict foreign exchange control system environment, are obviously not a good choice.
However, it is under the current extreme environment of the test of global asset value that bulk assets in China's domestic asset field have ushered in an unprecedented window of opportunity and dividend period.
On the one hand, foreign exchange controls, overseas capital cannot enter China for asset purchases smoothly, and it also needs to be subject to many supervision. From the perspective of asset competition, this is normal. Even in Southeast Asian countries, any bulk assets have the rigid regulations that "the proportion of property rights held by foreigners shall not exceed a certain percentage", which makes this type of RMB assets a high-quality asset with the characteristics of "domestic capital first".
On the one hand, experiencing the epidemic, the game between big powers, and the multi-dimensional test of international conflict situations, China's bulk property assets, value security, asset liquidity , including income situation, has been fully verified.
On the one hand, the risk clearance of China's real estate industry is still continuing, and it will inevitably take even longer to repair it throughout 2022. The upstream and downstream related to real estate investment, especially construction projects and pre-existing housing investment, will be amplified. Don't forget that capital is averse to risks and a gentleman will not stand under a dangerous wall.
Last, when it comes to facts, buyers for investment purposes contributed a total of approximately 139.2 billion yuan in transaction volume in 2021, accounting for about 71% of the total transaction volume. The amount and proportion have increased to a considerable increase compared with 2020. Investment buyers are more active in participating and completing transactions; the transaction volume of self-use buyers recorded a total of 57.9 billion yuan, accounting for about 29% of the total transaction volume.
Security and asset liquidity need not be said. From the perspective of income and operation: Benefiting from China's excellent epidemic prevention and control and leading global economic recovery, the domestic office market showed a strong cyclical rebound in 2021. The annual net absorption of 18 major cities reached 7.43 million square meters, a record high.The net absorption of Beijing, Shanghai and Shenzhen has exceeded one million square meters for the first time in history. Hangzhou, Chengdu and Wuhan, which are active in the technology industry, have led the demand for second-tier cities.
In the environment where investment and sale intentions have increased, it is expected that the bulk transaction volume of commercial real estate in mainland China will increase by 10%-15% year-on-year, and is expected to exceed 300 billion yuan for the first time.
022 CBRE Chinese investor intention survey showed that investment intention hit a new high, and 59% of respondents chose to "invest more actively" in 2022. The investment intentions of domestic and foreign investors have further increased. Shanghai and Beijing jointly entered the top five cross-border investment destinations in the Asia-Pacific region in this year's survey, especially Shanghai jumped to second place. What problems does the capital trends in the domestic asset field,
, illustrate?
is very realistic. In 2022, when multi-dimensional and complex, changing risks are intertwined, China's domestic bulk real estate has a momentum of value explosion and capital pursuit. The most important thing is to see the existence of rule dividends (restricting foreign investment and prioritizing domestic investment).
3
Looking ahead to the future China's economic environment, the value development trend and direction of various assets
There has been no major changes in a century. In fact, since 2022, it has entered a critical period of accelerated display. At this stage, protecting wealth and seeking security, while taking into account reasonable returns, has become the goal and direction that not only China's domestic capital and investor group, but also the world's capital.
Needless to say, macro-big words, complex analysis, RMB and RMB assets are destined to become the most imaginative capital pursuit object with the continuous rise and continuous development of China's country, including the inevitable trend standing in the changing global economic environment.
China is the second largest economy in the world, with a variety of asset categories. Of course, the corresponding future space and growth will definitely not be the same. Therefore, based on the environment of the times and the understanding of national economic strategies and development plans (this is very important. If you invest in China, you must have the awareness of policy awareness first), a few analysis and analysis will be conducted on the value development trends of various reachable asset types in China's domestic economic environment in 2022, including in the following years:
. Stock market:
1 It makes no sense to simply predict the stock market. From a general direction, looking at national capital demand in the short term, market sentiment expectations in the medium term, and returning to economic fundamentals in the long term. The national attitude and control run through the whole process. There are two dimensions of factors, one is the registration system and the other is the recovery cycle of the real economy. For 2022, the market in 2021 has actually given a good demonstration: sector rotation, total volume is stable, and the main line of stable growth is already very clear.
Unless it is in the information, capital strength, and the core competitiveness of the financial transaction field, in such a market, risks and opportunities coexist, and the gambling ability is too strong.
Of course, this situation will not continue. There is always a process from immature to maturity. However, how long is this process and when will the Chinese financial market connect with the global capital market? There may be too many uncertainties.
. Commercial housing and related investment:
China's real estate has long existed as a core economic asset, but this logic has actually begun to undergo some subtle changes since 2020.
On the one hand, it is the clearance of risks, which is related to real estate economy upstream and downstream investment. Before the risks were fully released, according to the current economic environment, it is probably not an ideal place;
On the other hand, it is a visible support for the change in positioning and the surge in housing prices. There is currently no market expectations and confidence have been hammered, and the economic fundamentals and population are insufficient for housing prices operating at high levels.
The last aspect is the asset shortage. It is undeniable that the asset attributes and financial value of good houses in core areas of first-tier cities are the ones. However, let’s understand this number of clear assets and competitive environment?
belongs to the era of brainless investment and easy-to-earn profit in China's real estate industry. It is not that real estate has no room for value imagination, but with the process of economic structure adjustment and reshuffle, real estate with prominent core values has long been famous, and the investment threshold and the competition for capital value that it has to face has been a mess. As for real estate in other cities, especially those that have entered a stage of obvious price decline, do you still need to consider it?
. Bulk real estate:
Bulk real estate, mainly commercial office, industrial property, logistics and warehousing, mainly determines the future value growth. One is the attention of domestic capital, and the other is the actual operation and management capabilities and the ability to select funds.
takes into account both security and liquidity (bulk real estate is the subject matter of high-quality mortgage assets for bank financial loans.), and the rest is the issue of chasing profits.
The war will always end, and the epidemic will disappear sooner or later. According to this window bonus period, it really responded to the laughter: Today, you don’t care about me, tomorrow, you can’t afford to climb!
4. Entity and manufacturing:
Investment in the real economy and manufacturing industry, this requires channels and vision. In fact, in the current situation where the current stock of China's economy is obviously inverted, it is really good companies do not need money, and industries and companies that need money are in trouble.
. Security is the first principle. When facing entities and manufacturing, you can’t get over it. If you are interested, you can talk to the bank credit group about this topic.
real estate investment, the worst market is not good, but the assets are still there, and security guarantees; but the real economy and manufacturing industry, a market fluctuation, or market loss, is the loss of real money and silver, and even potential debt risks. Of course, this corresponds to how many risks there are and how much imagination corresponds to, right?
But from a realistic perspective, in 2022, under the main line of China's economy, it is obviously not an environment and era suitable for leverage to gamble.
The biggest attraction of investment is the fleeting window period and opportunity stage.
In 2022, the largest Black Swan Russian-Ukrainian conflict broke out, experiencing a value test and return to all kinds of assets around the world. It can help many investors in this era have a deeper and more comprehensive understanding and understanding of the value of assets, and it is of great significance and value. The opportunity to return to the essence in this way is very rare. Since you encounter it, you must learn to seize it.
