Opportunities and challenges of China's economy in 2020

① 2020-2025 is a transition period between new and old kinetic energy. Comparing with other three major economies, China still has a population advantage, therefore, China should speed up the training of human resources to cope with the huge demand for middle and high-end talents in manufacturing and service industries in the future.

②Insufficient incentives for investment and expansion of private enterprises, we still need to increase reform and opening up, introduce stable and expected private economy support policies, especially the "competition neutrality", restore private entrepreneurs’ confidence and good expectations of the government.

③ Real estate is still the main underpinning force for the Mainland economy. The dependence on land and real estate comes from the government and private economy, which is difficult to reverse in the short and medium term. The "Strategy for the City" will make the overall situation of the real estate appropriately loose. In the face of debt repayment pressure, it is the necessary measures for economic stability to guide the leading real estate enterprises to restructure small and medium-sized housing enterprises and ensure the leading real estate enterprises to survive in difficult times,.

④ Enterprises must be more deliberate in "de-leveraging" to avoid triggering the chain shock caused by debt default. This is subtraction, technological innovation and industrial transformation are addition. The progress of subtraction should be slower than the speed of addition.

⑤ The regional economy has entered a new stage of competition, which is mainly reflected in the "Grabbing Talents" and the "Optimization of Business Environment". Local governments have an incentive to build more infrastructure, and local debt will continue to rise. Some traditional enterprises have transferred to the economic zone of central cities with better logistics and business conditions. Some traditional enterprises are also moving to lower-cost areas of Southeast Asia.

⑥ Local governments have implemented tax reduction policies, emphasizing the real effect of tax reduction. At the same time, the Civil Service Law has begun to be effectively implemented, and the reform of public institutions may be rolled out in an all-round way to effectively reduce the government's public expenditure. But tax reduction have a limited effect on consumer spending.

⑦Increasing urban population and class differentiation are gradually becoming apparent. The focus of poverty reduction has gradually shifted to urban areas. Internet popular economy, entertainment economy, night economy, leisure economy and other areas of popular participation are encouraged.

The Prediction of China Macroeconomic and Financial Market in 2020

① The first half of the year was a period of high growth and laid the foundation for the achievement of the overall economic goals. Fiscal and monetary policies will be relatively loose in the first half of the year, and fiscal policy will continue to be loose in the second half of the year. The budget deficit will be raised, the required reserve ratio will be cut and interest rate cut will continue.

② The target of China's GDP growth in 2020 is around 6.0%. It may actually be achieved at 6-6.1%. CPI will be controlled under 5%. The exchange rate of RMB against USD will fluctuate around 7.

③ A large number of offshore financial institutions have set up holding Mainland operating entities, helping to ease employment pressure in the Mainland financial sector.

④ Foreign capital will be dominated by inflows. The funds allocated to the stock market and bond market will increase significantly, which has a certain supporting effect on the securities market.

⑤ The structure of investors in the stock market will change significantly, and the effect of "retail disinvestment" will be obvious.

⑥ The registration system is expected to be fully rolled out, and the high-yield bond market is expected to speed up development.

⑦ The central bank is likely to introduce measures that will help address the "liquidity stratification" and "credit stratification".