It is no exaggeration to say that the two directions of "demand-side reform" and "domestic and international double circulation" will affect the development logic of China in the next 5- 10 years.
Whether we can grasp the strategic direction of these two countries to make personal work layout and asset layout is an important factor to change the fate of individuals and families and realize the future class transition.
In this article, Morgan Stanley interprets the background, logic and opportunities that everyone can seize.
0 1 What is the demand-side reform?
"We must reverse the supply-side structural reform and attach importance to the demand-side reform."
From this passage, we know that we should put the "demand side" reform and the "supply side" reform together.
In 20 16, our central government first proposed the supply-side reform, which also affected the macro-policy bus in these five years. Correspondingly, the demand-side reform proposed at the end of 2020 shows its importance.
The operation of an economy needs mutual promotion and cooperation between the supply side and the demand side.
In the previous five years, we started from the supply side of goods and services, that is, the production side, and carried out "three to one supplement and one drop". That is, de-capacity, de-inventory, de-leverage, cost reduction and short-boarding.
The supply-side reform mainly solves the problems of overcapacity, large inventory in the property market and high debt.
After five years of adjustment, the supply side is ready, so to further seek high-quality economic growth, the demand side needs to cooperate with it.
In order to help understand the influence of supply side and demand side on economy, we can look at the following figure.
In the field of economics, people have reached a theoretical understanding:
The supply side consists of four elements: land, labor, capital and technology.
The troika that drives the demand side includes investment, consumption and export.
Then why do you want to do demand-side reform?
Because from the demand side, the logic of development is really different.
In the past, the main driving forces of our troika to stimulate demand were export (as the factory of the world) and investment (government procurement and infrastructure construction). However, the international situation has changed in recent years. With the development of China, the advantage of low cost no longer exists. Therefore, the old model of manufacturing at low cost, obtaining foreign exchange after export, and then investing money in infrastructure construction through settlement and sale of foreign exchange is not feasible.
Therefore, consumption is a more important driving force in the troika and the main source of power in the future.
Moreover, from the structural point of view, at present, China's consumption drives GDP growth by more than 60%. Referring to the developed countries in Europe and America, there is still room for improvement to 80% in the future.
02 background of demand-side reform
If the first half of the previous reform and opening up solved the problem of "whether there is", then the problem of "whether it is good or not" will be solved more in the future.
So in recent years, we have found that "high quality" and "high efficiency" are the key words of development.
2020 is the closing year of the 13th Five-Year Plan and the opening year of the 14th Five-Year Plan.
In 2020, we experienced a global COVID-19 epidemic, and we are the only major economy in the world with a growing economy.
Since last year, China's per capita GDP has exceeded 1 10,000 USD for the first time. How to avoid entering the "middle income trap" and how to maintain sustained and high-quality economic growth are the most important issues.
Under the current situation of economic recovery after the epidemic, the recovery of supply side (that is, production side) is faster than that of demand side (that is, consumption side), and the recovery of infrastructure investment and real estate construction investment is also faster than that of consumer demand.
Therefore, it is obvious that both long-term economic development and short-term economic recovery are seriously restricted by poor consumption.
Naturally, solving the problem of "mismatch between supply and demand" is the top priority.
Only by realizing "supply creates demand and demand pulls supply" can the economy be virtuous.
Moreover, we should pay more attention to the circulation of the domestic market and solve the problem of sticking our necks. This is the logic of "domestic and international double circulation" (click to review), especially the establishment of "domestic big circulation" system, which keeps consumption at home and promotes each other with the production side to form a virtuous circle.
03 investment impact
Therefore, in my opinion, if we want to change our destiny and gain wealth in the next 5- 10 years, we must make these three things clear.
Therefore, Morgan Stanley will repeatedly interpret it and brainwash everyone.
The three most important things are:
Domestic and international dual-cycle system, demand-side reform, the 14 th five-year plan.
Looking at these three strategies together, we will find that they do not exist independently, but a complete logic, which complements and confirms each other.
Before the "double cycle", Dharma made an interpretation. At the end of this article, Dharma will put a link to facilitate direct reading.
The content of the "14th Five-Year Plan" is definitely worthy of our repeated study in order to seize the great opportunity in the next five years. Follow-up comes out with detailed policy details, which will be explained in detail by Dharma.
So what is the "demand side reform" we are going to talk about this time?
The most important thing is to use the power of this carriage to create new consumer demand and revitalize the stock demand.
That means that we should let everyone "have money to spend, courage to spend, and land to spend."
1. Having money to spend means narrowing the gap between the rich and the poor and redistributing wealth.
Real estate will not be the best investment target in the future, because it is a "reservoir", and the huge mortgage on the backs of several families is an important factor hindering consumption. If the real estate continues to prosper, it will affect the prosperity of the consumer market.
Real estate is also an important reason for the widening gap between the rich and the poor. Therefore, in the future, policies such as renting and selling the same rights and renting subsidies will be gradually implemented.
Therefore, "housing without speculation" is definitely a big foundation for demand-side reform.
In terms of opportunities, we can pay more attention to the consumer demand in the sinking market, especially the consumption power of third-and fourth-tier cities, counties and townships, and there will be many stimulus policies in the future.
Therefore, Morgan Stanley has always been very optimistic about business models such as Aauto Quicker Live and Pinduoduo, which can release consumer demand in the sinking market.
2. Boldness means stabilizing employment, solving educational problems, providing for the aged and optimizing the income structure of residents.
First, stabilizing employment, spreading economy, live broadcasting with goods, opening a shop in Pinduoduo and doing WeChat business are all good choices.
However, what we want now is high-quality and sustainable development, which will definitely lead to high-quality development, rather than taking the road of development first and governance later. Those who choose these tracks must pay attention to quality management from the beginning and cannot "expand wildly". The recent "downfall" of Simba is a bloody example. We must have patience and long-term vision.
Second, the track to solve the problem of education burden and old-age care is in line with the general trend.
Third, the optimization of residents' income structure. It is a good way to let residents have more passive income and develop the capital market.
Therefore, we can see that Public Offering of Fund has exceeded 3 trillion this year, which is an absolute historical peak, which is largely due to the guidance and encouragement from the top.
Our central government has never paid so much attention to the capital market as it does today, because it can solve the problem of funding sources for scientific and technological innovation and advanced manufacturing, and at the same time stimulate residents, because the wealth effect can make residents more willing to spend.
Scientific and technological innovation needs huge funds, but the source of this part of the funds must not be banks, because the risks borne by banks are too high to guarantee the savings of residents, thus causing the risk mismatch in the financial market and bringing social instability.
Looking at the vigorous development of high-tech enterprises in the United States, it has a lot to do with the strong secondary market financing channels and mature capital market environment in the United States. Therefore, we understand that a series of actions, such as the reform of the registration system, the reform of the science and technology innovation board, and the reform of the Growth Enterprise Market, are inseparable from the country's future national luck.
What I said earlier is the perspective of production-side financing. From the perspective of residents' consumption, making money in the capital market has a wealth effect, and the money in the capital market feels "white" in people's minds, so there is also a stock market skyrocketing day, and everyone treats people to buy bags to celebrate.
Therefore, it is an inseparable part of the national strategy to realize the "slow cow" capital market reform in the future. Just like the real estate market ten years ago, you missed the first opportunity, and you must not miss the second one.
3. Having land to spend is to guide consumer demand back to China, so that high-end demand can be met.
What do you think of at this time?
Yes, the establishment of duty-free shops and various free trade zones in Hainan is to find ways to bring consumption back to China and solve the problem of consumption places.
However, you will say, "Many people go to Japan to snap up toilet seats! We don't have it here! "
So the second point is to solve the problem that high-end demand can be produced, so we should advocate high-end manufacturing.
Before the rise of Huawei, it provided a good example for high-end brands to compete with foreign brands (Apple, Samsung), but it also encountered the problem of "stuck neck", so the independent control of supply chain is a necessary advocacy direction.
The above is the interpretation of "demand-side reform" in the desert.
Understand the national macro strategy and go with the flow.
I hope you and I can enjoy the dividend of national development in the next decade.