Qingdao International Nonferrous Metals Platform Investment Promotion

Qingdao International Nonferrous Metals Trading Center, asphalt, copper, aluminum nickel, Qingguo Bank, Industrial and Commercial Bank of China custody, telephone QQ: membership recruitment, agency, account opening, investment, high rebate Qingdao International Platform Information: What is the current economic situation, the first three quarters The D growth rate remains at .%. Many experts say that the pattern has been determined and the economy has bottomed out. What do you think?
Cao Yuanzheng: I’m not sure, but the bottom has basically been established. We saw D.%, and more importantly, some changes in economic data. The first one is that it turned positive for the first time in months. This is a micro-indicator, which means that the sales environment has improved and sales revenue has improved. This makes a lot of sense for control levers. Second, the profits of industrial enterprises, both private and state-owned, began to show positive growth after a few months. This means that the ability to repay principal and interest is improving. So, if there are these changes from macro to micro, you can think that China's economy has basically hit the bottom, or is quite close to the bottom.
Although it is not easy to say an inflection point, the meaning of the prediction has changed. This means that there is no need for large-scale stimulus in terms of macro policies, including the market-expected RRR cuts, interest rate cuts, and looser monetary policies, which may not be too important. At this time, the policy focus should shift to supply-side reform, and create a foundation for China's sustainable growth through reform and structural adjustment. We think the greater significance lies in this aspect.
The issue of depreciation of the RMB exchange rate caused the market to panic and began to allocate funds overseas. What do you think about this?
Cao Yuanzheng: Last year’s changes in the stock market, this year’s changes in the housing market and exchange rate changes have revealed the fact that Chinese residents’ asset allocation channels are too narrow. Therefore, any market where its cash rushes will cause substantial growth. In the long run, these asset allocation channels, especially residents' income, will become higher and higher, and the requirements for this allocation will become higher and higher. In addition to allocation in the domestic financial market, space allocation is also opened internationally. Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect are also related to this.
Will this have any impact on Hong Kong’s offshore RMB market?
Cao Yuanzheng: Has the RMB devalued? The issue of RMB exchange rate involves two factors. One is whether the local currency depreciates, and the second is the change in relative value. We have observed that at least in the short term, there is not much pressure on the depreciation of the RMB domestic currency. For example, you will find that it is not growing very quickly, precisely because the RMB and its purchasing power have not changed much. Second, China's RMB asset interest rate is higher than international asset interest rates, usually around 1.0 points. Relatively speaking, holding RMB assets is also cost-effective. If the change in the RMB exchange rate is not due to its intrinsic value, it will definitely depreciate relative to the US dollar. On the other hand, the RMB is appreciating against the US dollar relative to other currencies, and the appreciation rate is faster, so it is depreciating relative to the US dollar.
At the same time, the RMB pricing mechanism is also changing. In the past, we focused on the US dollar and followed the changes in the US dollar. Now we focus more on a basket of currencies. In this sense, especially after joining in this month, it requires the RMB to be an international currency and an independent currency, and not to focus on the changes of a certain currency. This is why package pegs are important. In the long run, if the RMB becomes an independent currency and becomes a member of the world's currencies, its core issue will not be the exchange rate issue, but the interest rate issue. It is the interest rate that determines its own value, which is then linked to other currencies. To be more extreme, take the U.S. dollar, for example. The U.S. dollar has no exchange rate. Everyone discusses whether the U.S. dollar will rise or fall because of its interest rate.
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