Financial perspective

The three -year epidemic finally passed, but the most serious blow to the world's economy should be China.This is because China ’s closure and the implementation of the clearing zero policy for a long time have caused production to stop, and the rectifications began in 2021, which leads to the collapse of the stock market and property market.The situation has been waited until December 7 last year, and various epidemic prevention measures have been lifted. All kinds of epidemic prevention measures have been lifted. On January 8 this year, it is fully cleared and opens the border.Starting recovery, but it is still a certain distance from recovery normal.In other words, economic production still cannot catch up with the level before the epidemic.

Recently, Chinese President Xi Jinping also publicly said several times that the Chinese government will try their best to fight for the economy and promote consumption.

In the past three years, the world, including China's economy, has been affected by the US interest rate reduction and interest rate hikes.At the beginning of the epidemic in 2020, the United States cope with the economic pressure brought by the epidemic at a significant interest rate reduction.Federal funds have decreased again and again, and finally decreased to zero interest rates.Zero interest rates bring the stock market hype and the rise in the property market, and bring inflation.Inflation has appeared in 2021, but the Federal Reserve has not taken any actions, and there is no way to apply interest rate hikes to suppress inflation.Why?

One of the most likely reasons is that the President of the United States changed people and changed from Trump to Byeng.The term of office of the Federal Reserve President Powell was fully appointed in January 2022. Of course, Powell hopes to be re -elected. Before receiving Biden's re -appointment, he did not dare to raise interest rates. He was worried that it would lead to a record high.The property market will fall sharply, causing uneasiness, affecting Biden's impression of him, and losing the opportunity to re -election.

Therefore, in the first two months of 2021 and 2022, Powell saw that the inflation rate continued to rise and there was no action.After Biden decided to let him re -election last year, he started to raise interest rates in March. As a result, the inflation rate became higher and higher, setting a new high record in 40 years.He had to accelerate the rate of interest rate hikes, and suddenly suppressed the world's stock markets and property markets at once, causing panic to a certain extent.

Because of the replacement of presidents, Powell did not dare to raise interest rates in the first year of taking office in 2021, but the practice of Chinese leadership is different.They saw the bubble triggered by the US zero interest rate. In just one year in 2021, Tencent's stock price listed in Hong Kong has risen by 1.5 times.That year, the Chinese private real estate agent Country Garden sold the building for a year of sales of 1 trillion yuan (about S $ 194 billion), and Evergrande Group also sold 700 billion yuan (about S $ 136 billion) buildings.too big.This made the Chinese central government's foam for the stock market and the property market one year earlier than the United States. First of all, it was targeted at the Science and Technology Stocks.The stock price fell from the highest HK $ 740 (about S $ 127) to the lowest at the lowest at RMB 180 (about S $ 31); Meituan fell from the highest 460 Hong Kong dollars (about $ 79) to HK $ 103 (about S $ 18)Essence

After rectifying the shares of Keke, Beijing officially combats private real estate developers who have expanded rapidly, tighten the loan of real estate developers, and set the guidance of the "three red lines".In stress, a number of private real estate developers are unable to repay debts and close to bankruptcy. At the same time, it is unable to continue to build unsuccessful buildings. The so -called rotten tail buildings have appeared, which seriously crack down on people's confidence in buying buildings.The sales of buildings have fallen, property prices have fallen, and their confidence has not yet recovered.

For a long time, the real estate market has been a very important part of the Chinese economy. The real estate market is not scenery, which will affect many industries.Later, the rotten tail building triggered the rights protection campaign and demonstration of anti -crowded tail buildings across China.The rights protection campaign forced the Chinese government to have to shoot and order bank loans to complete the construction of the bad tail building to the real estate developers, so that buyers can collect the buildings.However, despite the solution of the rotten tail problem, many private real estate developers still lack the development of funds, causing the overall real estate city roads to shrink, property prices have fallen, local governments' land sales revenue has declined, which affects local finance and construction.Many Chinese real estate stocks listed in Hong Kong have been suspended for a long time and cannot be resumed. The problem is still serious.

Simply put, the sources of pressure faced by the Chinese economy today are not only the three -year epidemic, but also the Chinese government has suppressed the stock market and real estate bubble.Last year, Prime Minister Li Keqiang also said several times that the Chinese government would fight for the economy. Unfortunately, plus a saying that it would not adopt the method of large water irrigation to promote economic growth, the clearing policy has not been lifted, so the effect is not ideal.

Fortunately, because the Chinese government shot early and cooled the market, there was no inflation problem faced by many countries and regions in the world in the United States and the world.China's inflation rate is very low, allowing the Chinese government to have the conditions to reduce interest rates and reduce bank deposit reserves, so that banks have more money to lend to enterprises and individuals to promote economic recovery.

After the 20th National Congress of the Mainland Government last year, the personnel changed, and the new Party Central Committee seemed to have made greater determination to fight for the economy, and it might adopt the method of large water irrigation.Recently, Li Keqiang said that the Chinese economy has stabilized at the end of last year. It has been picked up early this year. The economy has been running steadily but still facing many risk challenges. Therefore, we must continue to expand the momentum of economic recovery.The official media Securities Daily reported that the infrastructure that China's key investment in this year has reached RMB 21 trillion (about S $ 4 trillion), which is indeed a large water irrigation.In 2008, in the face of the global financial tsunami, then the then Prime Minister Wen Jiabao made China out of the infrastructure of 4 trillion yuan (about S $ 770 billion), and the economy continued to develop at a high speed.

Soon, the Chinese People's Congress will be held, and Li Qiang will replace Li Keqiang as Prime Minister.New officials are in office, I believe that they will work harder to work hard, especially to promote China's domestic demand market.In fact, the average savings rate of Chinese people today is the world's first. It is over -savings and is not conducive to economic development. It is necessary to try to encourage consumption, revitalize the market, and promote economic growth.

The author is a special professor at the City University of Hong Kong