THREAD: Takeaways from CF40 Q1 2019 #macroeconomic policy report by cf40 senior fellow Zhang Bin: 1/8
Current situation: Government speeds up #debt issuance and broad credit rises.#Economy has shown signs of bottoming out as prices rebound.
2/8 Broad credit increased by 11.4% yoy. Government #debt increased by 1.9 trillion, corporate debt by 5.8 trillion. Growth of household debt slowed significantly, but still registered an increase of 1.8 trillion.
3/8 Outlook:Economic recovery still faces challenges while several factors favor asset prices
-The growth of cyclical industries continues to slow,including home sales and auto sales.
-Sustained policy support, progress with China-US #trade talks favor the rise of assets prices.
4/8Policy advice: Continue government spending and ensure reasonable growth of broad credit
-Provide ample liquidity and ensure reasonable growth of broad credit
-Providing diversified financing channels for infrastructure and maintain reasonable increase of government spending
5/8 Develop equity financing products such as #REITs, pension funds, P/E and professional asset management services;
-Continue the supply-side reform of property market, increase the provision of residential land and improve public facilities in cities with net population inflow.
6/8 Special report: Aggregate demand management during economic restructuring
✴️Three features of economic restructuring:
-Consumption upgrading of the household sector from manufacturing products to services
-Rise of human capital-intensive industries
-Reformation of big cities
7/8 ✴️Slowdown of #capital-intensive firms led to a sharp fall in their borrowing, while the rise of human capital-intensive industries and the reformation of big cities are accompanied by a sharp rise in consumer credit and government debt.
8/8 ✴️#China’s economy is faced with the risk of deflation. Government borrowing and increased expenditure are needed to stabilize aggregate demand. #economics
📢Below is an abstract of the Q1 2019 macroeconomic policy report. The full English version of the SPECIAL REPORT is to be released soon. Stay tuned. 🤓
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