French media: Why the worst period of China has passed

This article is the article on September 21, French Patrimoine24 website, original title: Why the worst period of China has passed

The Chinese economy is difficult to recover this year, but the worst case seems to have passed. We expect that the Chinese economy will return to growth, but before the sustainable recovery, the Chinese stock market will fluctuate sharply.

First of all, although there are still financial problems in the real estate market and developers, China's banking system is strong enough to bear this impact, so there is no systemic risk. In order to promote existing real estate development projects, China is encouraging local governments to find solutions to allow developers to deliver their houses to the owners as soon as possible. However, in view of the current trend of the slowdown in housing sales and real estate investment, China's house prices will be adjusted, and the improvement of developers' financial conditions will also depend on targeted support for the state.

Secondly, China's "dynamic clearing" policy has stabilized the epidemic of new crown pneumonia, and the restrictions of measures are becoming smaller and smaller. Vaccine vaccination speed is accelerating, and the Chinese government is also analyzing data to predict the potential toxicity of the new coronary virus variants that may occur this winter.

Third, China has implemented targeted economic recovery measures. On August 25, China (Executive Meeting of the State Council) announced a policies equivalent to $ 146 billion to support investment and consumption. Although the scope of a package plan introduced after the financial crisis in 2008 was narrowed, it is still Enough to maintain economic growth. China has restarted infrastructure investment, new local government loan plans and new project approval will provide motivation for the construction industry that is impacted by the epidemic, coupled with a mild monetary easing policy (opposite to Europe and the United States), we predict these measures It will support China's economic growth in 2023.

Finally, the government's rectification of the platform economy was coming to an end. Important meetings held by China at the end of July have affirmed the important role of the technological field in promoting China's economic development. This change enhances confidence in this field. In addition, although there are still differences in the audit supervision of listed companies in China and the United States, the two countries have reached a preliminary agreement on August 26. This is a encouraging signal, indicating that both parties have the willingness to achieve compromise.

Based on the above four points, China's prospects are now more optimistic and predictable than when the epidemic was out of 2020. (Translated by Luc)

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