In a recent article, @SunMingchun discussed the economic outlook of Chinese mainland, Hong Kong, and the US in 2021:… #economics 1/5
The US economy is expected to recover from a low position but may hardly resume to the pre-pandemic level in 2019. The spread of the virus remains to be the biggest obstacle to the economic recovery in the US. 2/5
Chinese economy will continue to recover in 2021 and is expected to achieve a real growth rate of 7%. 3/5
In 2021, mainland will further increase investment in sci/ tech R&D, and a large amount of capital will enter the field of "new infrastructure". This will not only help stabilize investment, but will also foster the development of mid- and downstream industries. 4/5
After seeing the deepest and most enduring recession in 2020, the Hong Kong economy in 2021 is expected to see moderate growth and achieve a growth of around 3%. Also, its financial market may see immense possibilities in the new year. 5/5

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More from @ChinaFinance40

11 Jan
According to CF40 Nonresident Senior Fellow and former CSRC Chairman Xiao Gang, China will face three major changes in its domestic and international environment that have important implications for its economic and financial development during the 14th Five-Year Plan. 1/7
1. Its demographic dividend and the advantage of low labor cost are diminishing;
2. It no longer enjoys the “latecomer’s advantage”;
3. Its relatively favorable external environment is undergoing profound changes. 2/7
Against this backdrop, Xiao says it’s imperative that China explores and unleashes the new advantage of its super-large market. He proposes several policy suggestions to this end. 3/7
Read 7 tweets
10 Jan
Developing a diversified #pension finance system is now high on China’s agenda. China’s financial regulator is actively pushing forward the development of pension finance, encouraging the banking and insurance industries to provide more diversified pension products. 1/5
At a recent CF40 seminar,experts said the development of the third-pillar pension system in China is facing 2 major challenges:1.Acceleration in population aging means that the establishment of the third-pillar pension system will need more than routine reform measures;2/5
2. Both the design of and regulatory framework for pension products need to be further optimized:… 3/5
Read 5 tweets
9 Jan
Since 2012, the overall feature of China's economic cycle has been "easy to cool and hard to heat up", and the main task of aggregate demand management is to increase demand.1/7
Regarding the choice of policy tools, standard monetary and fiscal policy instruments such as rate cuts and raising government debt to expand expenditures have not fully played their role.2/7
Meanwhile, investment through borrowing that is participated and led by local governments, backed by government credit to varying degrees but not reflected on the government budget, and also widely participated by commercial financial institutions, has prevailed. 3/7
Read 7 tweets
30 Dec 20
Chinese people love #savings. This mentality in itself is by no means wrong. Savings have been important in sustaining Chinese households during covid. But the problem lies in the form of savings, says Ren Chunsheng, Chairman of China Insurance Investment Co., Ltd. 1/6
Most of the savings in China are placed with #banks, but banks’ main function is to extend #credits; only a small portion goes into equity #investments. 2/6
It would be desirable to turn part of the 90 trillion yuan of household savings in China into long-term funds through investments in third-pillar #pensions. 3/6
Read 6 tweets
29 Dec 20
Since October,market views have diverged on the outlook of China’s economic recovery: the first type of view believes that economic recovery will continue,the second holds that the economy has already showed signs of overheating, &the third states that the economy is peaking. 1/7
This essay by CF40 research fellow Zhu He reviews four basic facts of China’s economic recovery since the outbreak of COVID-19 and discusses the possible reasons behind the three different views.… 2/7
Fact 1: Policy forces have played an important role in this round of credit expansion. But whether the momentum of this round of expansion will sustain after policies exit depends on how large role policies have played so far. This is the first divergence in the market. 3/7
Read 7 tweets
28 Dec 20
Xiao Gang says during 14th 5-Year Plan, China needs to carefully manage 5 relationships: that between inheritance & innovation, between the market & the government, between opening-up & independence, between development & safety, and between development strategies & tactics. 1/8
The Chinese government newly proposed that supply-side structural reforms should remain as the emphasis of efforts, while demand-side management also deserve due attention. 2/8
Xiao believes that to promote the new development pattern of #dualcirculation, the key is to balance the upgrade of the supply side and the expansion of consumer demands. 3/8
Read 8 tweets

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