The Central Economic Work Conference is expected to be held on Friday. The stimulus measures will be introduced.
According to market news, the Central Economic Work Conference has the opportunity to be held from the 14th to the 17th of this month (this Friday to next Monday). Will it introduce more economic stimulus measures and become the focus of attention? Foreign brokers and fund companies believe that fiscal policy will play an important role in supporting the Chinese economy, especially tax cuts. It is expected that there will be a high possibility of lowering value-added tax, social security contribution rate and corporate income tax.
Avoid aggravating asset bubbles
The Central Economic Work Conference is the highest level economic work conference in the Mainland. It is jointly held by the CPC Central Committee and the State Council. Once a year, it is generally held in December to deploy for the economic development in the coming year. “Market News International" quoted sources close to the Chinese government as saying that the Central Economic Work Conference was held from the 14th to the 17th of this month. Earlier, the chief economist of GF Securities, Shen Minggao, said that many people expected the central government to introduce measures such as large-scale tax cuts and government spending.
Lu Wenjie, China investment strategist at BlackRock, expects that China’s economy will slow down next year, but the government is expected to introduce stimulus measures such as tax cuts and infrastructure to ease the slowdown of the economy, but he believes that it is necessary to pay attention to the pace of policies so as not to exacerbate assets such as real estate. foam.
Zhu Haibin, chief economist at JPMorgan China, released a report that China will increase its policy support next year to cope with the economic slowdown and be dominated by fiscal policy. Tax cuts will play a key role in reducing VAT, social security contribution rates and corporate income tax. The possibility is great. The bank estimates that China’s GDP growth will slow down to 6.2% next year, lower than the 6.18 forecast in 2018; and the government is expected to lower its growth target from 6.5% this year to 6% to 6.5%.
BlackRock means that the currency will not be too big.
In addition, JPMorgan believes that China will loosen its monetary policy, allow the renminbi to depreciate moderately, and fine-tune market regulation and real estate policies. The PBOC is expected to cut the deposit reserve ratio twice in the first half of next year, a total of 100 basis points, and the social financing scale will rise moderately. At 1%, the financial market interest rate and the average financing cost of the real economy will decline, and the benchmark lending rate may remain unchanged to promote interest rate liberalization and interest rate transmission.
For Sino-US trade negotiations, Lu Wenjie said that the Chinese government is expected to actively import US soybeans and natural gas products and improve industrial policies. Although it is difficult to expect a comprehensive agreement in 90 days, the framework agreement will also help reduce trade war risk. He pointed out that the current A-share valuation is cheap, coupled with policy stimulus, China stock market is expected to have room for rebound. As for the renminbi, it will not depreciate sharply. As the US Federal Reserve will slow down the rate hike next year, the Sino-US spread will be expected to stabilize. If the US rate hike is faster than expected, China will face risks.