Chapter 226: Attachment and De-Attachment
Friday, April 5, 2024.
The market is closed for Qingming Festival these days, but there is still a lot of news in the market that is worthy of investors' attention.
First, the first quarter regular meeting of the Central Bank’s Monetary Policy Committee was released.
The meeting was held on March 29 and released in early April. It reviewed the central bank's monetary policy in the first quarter and looked forward to future monetary policy.
This is a very important way to observe the future monetary policy of the central bank.
my country's central bank is like the Federal Reserve of the United States. As my country's economy continues to develop, its status will continue to rise, thus having a huge impact on the economy and the stock market.
Many people tend to pay too much attention to the policies of the Federal Reserve, but fail to pay attention to the policies of the central bank.
It's a bit of missing the forest for the trees.
The meeting pointed out: "We should pay more attention to counter-cyclical adjustments and better play the dual functions of monetary policy tools in terms of both quantity and structure", and also "strengthen the implementation of the monetary policies that have been issued."
"Promote a moderate recovery in prices"
“Resolutely correct pro-cyclical behavior”
“Prevent the formation of unilateral consensus expectations and their self-reinforcement”
These policies fully demonstrate that although my country's PMI index has reached 50.8, a new high in a year, the loose monetary policy since the beginning of the year has shown no signs of tightening. Instead, it is being implemented and consolidated with increasing efforts.
It seems that the policy is still quite pessimistic and further efforts are needed to stimulate the economy.
Article 2: The People's Bank of China and the State Administration of Financial Supervision and Administration issued the "Notice on Adjusting Policies Related to Auto Loans".
The article states that "the maximum loan ratio for self-use traditional power vehicles and self-use new energy vehicles is determined independently by financial institutions."
This shows that the country’s attitude towards promoting and protecting automobile consumption is clearer.
Someone commented: "It seems that the possibility of a car with a 0 yuan down payment is not far away."
Some people also laughed and said: "The solution to the real estate problem is to increase leverage in car consumption."
In modern society, real estate, mobile phones and cars are the three largest consumer goods in residents' consumption, all worth over one trillion yuan.
As my country's real estate market is deleveraging and mobile phone consumption is basically saturated, developing automobiles, especially electric vehicles, has become an important measure to hedge against economic downturn (with the entry of Xiaomi Automobile, the kings of volume have collectively begun to roll out).
Especially last year, my country exported more than 5 million vehicles, surpassing Japan to become the world's largest automobile exporter.
Overall, the decline in the real estate industry has indeed affected economic growth.
However, with the lifting of real estate purchase restrictions, the introduction of a series of market-supporting policies, automobile exports, and the implementation of large-scale equipment upgrades and consumer goods trade-in policies, the market is expected to recover.
We should not be pessimistic about the future economy, but rather be optimistic.
However, the automotive market is highly competitive, and investing in this industry, especially in the current optimistic market climate, requires caution and objectivity.
Article 3. Yellen visits China.
This is a big deal, especially during the US election and at a time when the Federal Reserve is cutting interest rates.
The trade war between China and the United States has been fierce for six years since it started in 2018.
One of the United States’ biggest demands—“repatriation of manufacturing”—is still a long way off.
The three main costs in manufacturing are: raw materials, labor, and technological manufacturing.
In these three links, the price of raw materials is determined globally, and everyone is on the same starting line. The United States itself has not made any breakthroughs.
In the field of technological manufacturing, there has been no significant progress in recent years.
In terms of labor, the United States has no advantage. Instead, a large number of outstanding talents are constantly being siphoned into fields such as finance and medical care.
This means that if the United States wants to "repatriate manufacturing", it must either make the profits of the manufacturing industry exceed those of the financial industry and invest corresponding resources to support it, such as tariff protection, trade protection, etc., or reduce the profits of the financial industry and increase the profits of the manufacturing industry.
The former faces international competition and may lead to domestic inflation, while the latter will encounter obstruction from domestic vested interest groups.
Both are difficult.
Therefore, in the past few years, the United States has continued its previous strategy, firmly holding the commanding heights of high-end manufacturing industries such as chips and military, winning over a group of younger brothers, transferring automobiles, shipbuilding, heavy chemicals, etc. there, and trying to transfer low-end industries, such as textiles, building materials, food and other light industries, from China to other younger brothers.
The intention is to establish a new industrial chain based on itself and to kick China out on the premise of setting up tariff barriers.
This will lead to the transfer of industrial chains, the reduction of commodity production efficiency, and the industrialization of emerging countries to which the industrial chains are transferred.
This will inevitably lead to domestic inflation and accelerated industrialization of countries internationally.
In order to deal with this situation, our country chose to take the tough approach.
On the one hand, with the rare opportunity in 2021, we can directly move away the three major mountains of education, Internet and real estate.
In particular, it directly reversed the trend of financialization of real estate and major Internet companies, and invested huge amounts of resources in industries such as new energy, chip manufacturing, biology, aerospace, etc., directly impacting high-end industries in Europe and the United States.
On the other hand, while Europe and the United States are closing their markets, we should develop the domestic market and open up the Belt and Road Initiative, such as the markets in Southeast Asia, the Middle East, and Africa, to form our own new industrial cycle.
In modern society, whether it is a country or a family, it must have an anchor.
The anchor of resource-rich countries is the export of basic resources, such as food, oil, coal, natural gas, precious metals, non-ferrous metals, etc.
The anchors of industrialized countries are various manufactured products, from small needles and threads to large machinery, ships and spacecraft...
The current situation of the United States is somewhat embarrassing.
Because its main export now is the US dollar, and its only other exports, such as cars, chips, food, oil, etc., are still facing fierce competition from major powers.
It can be said that China used to be dependent on the international trade system established by the United States and was in the position of intermediate manufacturing.
But now, China has gradually replaced the United States. It is not only a huge consumer, but also a huge manufacturing country. It exports goods and imports resources. It has established close cooperative relations with various resource-rich countries, forming a fairly healthy cycle.
Attachment and de-attachment.
In this cycle, the weakest link is not China's manufacturing bottleneck, but the purchasing power of resource-rich countries.
Therefore, it is a good choice to appropriately increase the price of resources and give resource-rich countries greater purchasing power.
Or we can say that, in the context of competition among major powers, resource-rich countries have more bargaining chips and are no longer exploited as severely as before. Profits have begun to shift upstream appropriately to maintain the already fragile economic cycle.
The world has unknowingly split into two camps.
The US dollar has unknowingly become less important.
Once upon a time, the United States and Russia jointly dismembered the overseas colonies of the British Empire.
In the future, the United States’ modern colonial system will gradually disintegrate and disappear.
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