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2019 macroeconomic situation analysis and outlook
!!Xiao Lisheng, from Institute of World Economics and Politics Chinese Academy of Social Sciences

2019-03-21 09:30:43
Xiao Lisheng, from Institute of World Economics and Politics Chinese Academy of Social Sciences, delivers his report of 2019 macroeconomic situation analysis and outlook 

Mr. Xiao mainly introduces the report in three parts. In the first part, he introduces the macroeconomic operation from the consumption change, investment change (real estate, infrastructure and private investment), and import/export. In 2019, the economic growth rate of China is likely to maintain at 6.2%.

In the second part, Mr. Xiao states that financial deleveraging is into deep water. Capitals idled within financial system in 2015-2016 were rapidly cleared in 2017-2018, while the original financial channel was broken (apart from credit sector, bank funds were increasingly deployed in the non-credit areas), and the new channel has not yet been opened. Shadow banking financing channels contracted and the economy downturn accelerated. 

In the third part, he shows the impact of Sino-US trade war on macro economy. Mixed monetary policy and Sino-US trade war are two main reasons for the fluctuation of USD/RMB exchange rate in the first half year. In terms of trading, there is no basis for persistent RMB depreciation and RMB exchange rate should not be the object of global trading frictions. 

1. The main contradiction of 2018 economy is the fluctuation caused by the bottom of the macro-economy and the counter-cyclical policy 
2. Short-term consumption decline is mainly due to the fluctuation of the economic cycle and the impact of residents¨ debt constraints. The trend of consumption upgrading will not be interrupted. 
3. Renovation of shanty towns comes to an end, with no monetization support, real estate sales may continue to decline, underinvestment will further reduce policy space, monetary and fiscal policy will continue to be loose. 
4. Infrastructure showed limited strength, the pressure on "non-standard" asset return may reduce. 
5. Under the background of structural deleveraging, the contribution rate of private investment is expected to rise further. 
6. Trade war will narrow China's current account surplus. 
7. RMB exchange rate has periodical motive force to appreciate.
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