Columnist of the editorial leader of the documentary/new waves (Bkopleader)
In the current situation of good employment, the time has not come for comprehensive stimulus codes. The “policy base” or has become apparent, but it often requires a process from the “policy base” to the “economic base”, and economic stability may occur in the second half of next year.
Core views:
The recent decline in both the Bureau of Statistics and the new PMI to near the bitter line has made the economic slowdown more visible. Widespread data also indicate that exports are in the process of deceleration. Nevertheless, domestic demand continued to be underpinned by the positive impact of increased capital financing support, erected real estate investments and individual income tax adjustments.
Financial restraints have relaxed marginally, but are subject to financial regulation and the delayed adjustment of financial requirements, and M2 and SMS are expected to maintain low-status shocks, as a result of successive precipitation and open market operations by central banks. In comparison with other emerging market economies, the depreciation of the people’s currency has been limited since this year, and it is expected that monetary authorities will seek a balance between increasing the tolerance for exchange rate fluctuations and preventing excessive depreciation, not necessarily maintaining fixed points.
It is a matter of concern that recent meetings of the Political Bureau have not referred to the relevant elements of real estate and leverage, “policy base” or have become apparent. Tax reduction measures will continue to be introduced and fiscal policies will be more positive. In the current situation of good employment, the time has not come for comprehensive stimulus codes. Historically, from the “policy base” to the “economic background”, a process is often required, and economic stability may occur in the second half of next year.
Corrigendum
The economic slowdown is more pronounced, but domestic demand is still underpinned.
The recent fall of the Bureau of Statistics and the new PMI to near the battery line, where most sub-indicators, such as production, ordering, have significantly declined, presupposing further economic slowdowns. On the price side, supply restraints are eased and oil prices adjusted, PPI will continue to decline at the same rate of increase and CPI will not be able to rise in the short term.
Widespread data also indicate that exports are in the process of deceleration. The “run” effect of trade between the United States of America in the previous period, or the growth in our exports of aid, has been markedly reduced by the recent export of related commodities subject to tariff escalation, and China has plunged its exports to the United States as a whole. Despite the stimulus of some commodity export rebate policies, PMI’s export orders have continued to decline in the near future, as well as the first negative growth since 2016 in export swaps. Against a backdrop of further global slowdown, the downward risks facing our exports in the short term have increased.
Internal demand remains underpinned by the positive impact of increased capital financing support, the persistence of real estate investments and the adjustment of personal income taxes. In the area of manufacturing investment, the short-term viability of manufacturing investment remains as supply-side constraints relaxed, coupled with the delayed impact of pre-liminary profits. In the area of capital investment, recent policies have strengthened support for capital financing, a clear vision of a stable base, a slightly stable or small scale of capital investment. With regard to real estate investment, land markets are gradually being cooled and land acquisitions will be higher, but construction investment is expected to be stable in view of the already high interest rates, both of which are still less resilient in the short term. On the consumer side, although sales of goods such as vehicles remain low, recent tax downwards will provide some support for the consumption of the population.
Note: Personal income tax is treated on average for six months.
Currency credit expansion is stretched and people’s currency exchange rates are not necessarily static
The M2 and SMS are also expected to maintain low-level shocks, as the central bank has been plunged on several occasions, such as precipitation and open market operations, and monetary supply constraints have relaxed marginally but are subject to financial regulation and financial adjustment. Interbank market liquidity will continue to be sufficient, but credit expansion in real areas remains limited. Financial regulation continues to contract out-of-pocket financing, with little remaining space for local debt distribution over the four-quarters period, and business bond financing is lower under low market risk preferences. Recent policies have focused on addressing private and SME financing, but the actual impact remains to be seen.
In comparison with other emerging market economies, the people’s currency has been devalued since this year, and it is expected that monetary authorities will seek a balance between increasing the tolerance for exchange rate fluctuations and preventing excessive depreciation, which is not necessarily static. The United States dollar index has increased by about 8.6 per cent since it was strong in April, while the People’s Currency Depreciated by about 9.4 per cent over the same period, broadly consistent with other emerging market countries. The Bank, on the one hand, is expected to manage excessive unilateral depreciation (to prevent panic under the effects of sheep) and, on the other hand, has in fact tolerated more exchange rate flexibility (for external shocks).
Note: The time frame is calculated here at a robust stage in the United States dollar index from April to present this year.
Towards a clear policy base and a time-bound economic base
The recent meeting of the Political Bureau did not refer to the relevant elements of real estate and deleveraging, “policy base” or became apparent. The pace and direction of policies have not been fully consistent since this year, but at the current point, there have been significant signs of marginal deregulation. For example, the centrality of inter-bank interest rate levels has continued since the beginning of the year, and measures such as tax cuts have been introduced, and fiscal policies will become more positive. New rules, etc., have been slowed down in regulatory mode and strength. Nevertheless, in the current context of good employment, the time has not come for a comprehensive stimulus package.
Historical patterns suggest that a process is required from the “policy base” to the “economic background”, and economic stability may occur in the second half of next year. The transmission of macro-policies to the real economy, as well as the anticipated adjustment of micro subjects, often take time, although the policy base is apparent, it takes time. For example, if a monetary economy is to be seen, recent M2 has been built on a bottom-up sign that, according to the pattern of about one year’s gross domestic product (GDP) in its leading name, the economic base will appear in the second half of next year.
Basic findings
One is the recent decline in both the Bureau of Statistics and the new PMI to near the bitter line, which is becoming more pronounced. Widespread data also indicate that exports are in the process of deceleration. Nevertheless, domestic demand continued to be underpinned by the positive impact of increased capital financing support, erected real estate investments and individual income tax adjustments.
The second is the easing of monetary restraints, but subject to financial regulation and regulation, with many precipitation and open market operations by central banks.