This year the economy is still stable A shares organic breakthrough

China’s overall economic performance in 2017 exceeded expectations. As of yesterday, Caixin China’s manufacturing PMI reached a new high in December. China’s macroeconomic outlook is still good this year. A-share stocks are expected to make breakthroughs.

RMB exchange rate before the low after the high; real estate market is the most difficult to engage, but should hopeless rebound.

Choi Sun China announced yesterday that the manufacturing PMI index hit a four-month high in December 2017, mainly due to strong output and new orders growth. Seizure of confidence index rebounded from the lowest level and the employment index was the first in three months Rose, reflecting the improvement in manufacturing operating conditions in December, 2017 economic recovery pick up.

Infrastructure is still a reliable support

Following the momentum of 2017, it is estimated that although the overall economic conditions in the Mainland will be challenged this year, it will maintain its stability with stability. Consumption, investment and export of “troika” are still the main drivers of China’s economic growth. The pressure of economic growth this year will come mainly from the investment field. Real estate investment will decline under the control of the manufacturing sector. The manufacturing industry faces some tax cuts in the United States. The impact is certain but still manageable. Infrastructure is still the most reliable support. Therefore, it is expected that the economic growth in 2018 will remain at around 6.7% and the CPI will rise by about 2%. China’s economy will maintain its steady growth in the new normal.

In the RMB exchange rate, the biggest variable from the dollar. The United States made important progress in tax reform, the Federal Reserve may raise interest rates three times in 2018 and accelerate the contraction, coupled with the depreciation of the value of the United States dollar index in 2017 once more than 10%, the United States dollar index may stage a rebound, accordingly, the RMB against The dollar exchange rate may be some pressure of devaluation.

However, after the previous two years the exchange rate of RMB has fluctuated greatly, the Central Government has declared that it is necessary to maintain the stability of the RMB exchange rate. On the one hand, it should adjust the exchange rate formation mechanism and, in addition, intensify efforts to tighten capital outflows. It is expected that this year’s exchange rate of RMB will be slightly depreciated by the rebound of the U.S. dollar in the previous period and the upward trend will be restored in the latter part of the year. This year the RMB exchange rate against the U.S. dollar fluctuates between 6.4 and 6.8 in both directions.

Last year, the central authorities focused on resolving and preventing financial risks and implemented strict supervision in various financial fields. In the A-share market, while strictly examining the IPO, it also made some heavy penalties for some illegal operations. After rectification last year, the overall stock market in China was in a steady state. In terms of valuation, A shares are still very much to buy.

In 2018, it is estimated that A shares will have a higher chance of breaking up. After all, the stock market trend eventually depends on the economic situation. Many experts predict that A-shares this year are likely to break the 3539 early 2016, up 3700 points or even hit a higher position. Expected 3000 to 3100 points is a strong and supportive area.

Another is certainly the focus of this year’s economy, but most people are concerned about the real estate market. The market’s perception of the real estate market is very different. First of all, we can confirm that the Central Government will never let go of property prices and will not allow property prices to rebound sharply. On the other hand, property prices account for a large proportion of the Chinese economy. If sharply reduced, this will drag down economic growth and even lead to systemic financial risks. This is something the Central Government will not allow.

Therefore, it is estimated that the market will further cool down in the first quarter of 2018, and the monthly increase in house prices will continue to narrow. Looking at the annual volume of real estate market in first-tier cities in 2018, the volume and price of the real estate market in the third and fourth tier cities all cooled down.