Zhong Zhengsheng: The three major reasons for the current "production heat, investment cold"

2018-07-17 13:42 Source: My steel net

On July 12, 2018, sponsored by Hangzhou Hanggang Metal Materials E-Commerce Co., Ltd. and Shanghai Ganglian E-Commerce Co., Ltd., Zhejiang Excellent Steel Supply Chain Management Co., Ltd. sponsored the exclusive 2018 Steel China • East China Special Steel Industry The Chain Summit Forum was held at the Radisson Plaza Hotel in Huashengda, Hangzhou.

At the meeting, Monita research chairman and chief economist Zhong Zhengsheng gave a speech on "The Hot Issues of the Current Chinese Economy."

Zhong Zhengsheng said that the high-frequency steel inventory and power generation coal consumption data are not weak this year, and the industrial output in May has generally increased: power generation increased to 9.8% year-on-year, a new high since February 2015; steel, non-ferrous metals, chemical fiber The growth rate of basic industrial products such as cement and coal has increased. In addition, the prices of industrial products are also at a high level.

However, he also pointed out that the growth rate of infrastructure and government investment has fallen sharply. In May, fixed asset investment accelerated to 6.1% year-on-year, and the seasonal adjustment fell to 0.47%, which is the lowest since the data. With the fiscal and monetary consolidation into the deep waters, the focus of deleveraging has changed significantly.

Zhong Zhengsheng explained that there are three main reasons for the current "production heat, cold investment":

First, sample adjustment. He explained that many companies in industrial statistics in 2018 withdrew from the sample because they no longer met the "above-scale" conditions, resulting in a year-on-year growth rate that was significantly lower than the comparable caliber. However, in the data of fixed assets investment (excluding farmers), this problem does not exist. As a result, industrial production data is more stable than fixed asset investment data.

Second, the two respond differently to the price signal. He said that production is very sensitive to price signals, and investment needs to see a more defined outlook for demand improvement, which is linked to the supply-side reform and de-leveraging context.

Third, this year's investment slowdown is mainly reflected in the tertiary industry.

Regarding the current monetary policy of the central bank that everyone is concerned about, Zhong Zhengsheng said that the absolute level of real interest rates is currently low. In the first quarter of 2018, the actual loan interest rate adjusted by the PPI or GDP deflator accelerated the upward movement, but it is still at a low level in recent years, and comprehensive monetary easing is not appropriate.

Zhong Zhengsheng also pointed out that the stability of the RMB exchange rate is of great significance to the independence of domestic monetary policy. Malicious needs to prevent the self-realization of the depreciation expectation and continue to increase the code. At present, the currency is generally loose and not appropriate.

He further stated that the base currency gap has been significantly narrowed. According to estimates, after the RRR cut in April, the new base currency will only need to reach 400 billion yuan in 2018, that is, the central bank's net investment of 900 billion yuan will basically guarantee the 9% M2 growth rate for the whole year. As of June 20, the central bank has achieved a net capital injection of nearly 900 billion yuan through reverse repurchase, MLF, PSL and other tools; plus the previous targeted RRR cut, the pressure on the central bank to actively launch the base currency is relatively mild.

Regarding the RMB exchange rate, Zhong Zhengsheng said that although the expectation of the RMB exchange rate depreciation has risen, it is still relatively low compared with the historical high. At the same time, the central bank will not sit idly by the self-reinforcement of the expected depreciation of the renminbi, and will not be expected to guide and moderately manage it in the future. And really want to resort to exchange rate weapons, from the depreciation of the effective exchange rate of the renminbi to the speed of export, perhaps "too far from being thirsty."

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