excessive financial tightening is the main cause of economic adjustment

Macroeconomic analysis forecast report: excessive financial tightening is the main cause of economic adjustment

At the “Outlook 2019″ Tsinghua University China and World Economic Forum held yesterday, Professor Li Daokui of the School of Economics and Management of Tsinghua University released the “China Macroeconomic Analysis and Forecast" report. The report believes that excessive financial tightening is the most important reason for China’s economic adjustment since mid-2018. On the one hand, financial tightening has led to a rapid decline in infrastructure investment, and on the other hand, it has led to difficulties in financing small and medium-sized enterprises, which in turn has had a negative impact on the overall macro economy.

In addition, the report also said that the first-tier cities have gradually entered the era of “urban renewal”, real estate growth slowed down, and the concentration will be further improved, showing the trend of housing enterprises “big fish eating small fish”, and future housing price trends will continue due to policy changes. Differentiation.

The financial system needs deep adjustment

The report pointed out that since the fourth quarter of 2017, policies such as the “New Asset Management Regulations” have substantially curbed the entrusted loans and trust loan financing, resulting in a new decline in social financing.

The report believes that the top priority in 2019 is that the financial system needs to be deeply adjusted. From now until around 2022, it is the sprint of China’s economy from “middle income" to “high income." If the actual economic growth rate of 6% per year is maintained in the next three years, then according to the World Bank’s classification criteria, China will cross the threshold in 2022 and enter the ranks of high-income countries. Whether the Chinese economy can successfully achieve this goal, finance is the key. In other words, financial reform is the assembly of the Chinese economy from “middle income" to “high income."

House price trends will continue to differentiate

Regarding real estate, the report pointed out that first-tier cities have entered the urban renewal stage, income supports rent, rents support housing prices, real estate growth slows down, and concentration will further increase, showing the trend of real estate enterprises “big fish eating small fish” Policy changes continue to divide.

In the absence of a new urban sub-center, urban renewal has become an important issue for the future real estate market of these cities. As economic activities are mainly concentrated in the central urban area, and residents’ income is still growing, rents will continue to grow, and the growth of rents will further support housing prices. Home ownership in the first-tier cities will become a very good investment asset.

In addition, in some second-tier cities, housing prices in cities with large economic development potential and high population inflow pressure are still facing strong upward pressure. Such cities include Hangzhou, Hefei, Nanjing, and Wuhan.

The city on the first line will be an important force to undertake urbanization in the future, and house prices are still optimistic for a long time. With the implementation of the “City Policy” in 2019, some first-tier cities have the ability to solve the saturation of first-tier cities. They can gradually slow down the restriction policy, solve the housing needs of the newly-needed people, and form a long-term mechanism for real estate regulation.

In addition, urban renewal has also brought new challenges to local government finances. On the one hand, with the urbanization rate reaching its peak and the real estate market entering the stock era, the land transfer income is difficult to continue to increase, while the local government’s fiscal expenditure is relatively rigid and growing; on the other hand, without increasing the local debt invisible debt. Under the circumstances, how to raise funds to transform existing stocks, or how to introduce professional capital and personnel, and provide better property services for urban residents is also a problem that the government needs to solve.

At the same time, at least 15 trillion yuan of interest-bearing debts of housing enterprises will expire at 2019-2020, which will further increase the pressure on SMEs. Large-scale housing enterprises have better financing channels. In addition to the original traditional loans and trusts, overseas bonds and asset securitization have greatly expanded the financing channels for high-quality large-scale housing enterprises. A high credit rating has an advantage. The increase in industry financing concentration will help the industry to increase its concentration.

The report believes that the two most important variables in the change of real estate demand in 2019 are: first, the relaxation of real estate demand-side policies, such as purchase restrictions and limit loans; second, the gradual decline of monetization of sheds. The vacancy monetization of the shed has made the third- and fourth-tier cities face greater downward pressure on housing prices.