2019 China macro forecast--keeping steady
——Zhu Bin, Deputy General Manager & Institute Director, Nanhua Futures

Zhu Bin, Deputy General Manager & Institute Director, Nanhua Futures, delivers her report of 2019 China macro forecast--keeping steady 
 

The report is divided into three parts. 
1. Change and turbulence-sensitive Sino-US game. Mr. Zhu elaborated strong foundation of the US (including economy, US dollar, culture and military), US economic structure, current policy of the US, how to understand Trump and prospects for the US economy. Mr. Zhu pointed out central bank’s strong control on RMB exchange rate, but the US dollar index is powerless to drive the yuan to depreciate. 

2. The 2019 economy – start with investment. Mr. Zhu said that infrastructure is a game of steady growth and risk prevention, depending on three methods together like incentive local government willingness, guiding the investment field and clear source of funding. Slipping profits of enterprises threaten investment growth. VAT of manufacturing industry is the mainstream of VAT and VAT accounts for almost 40% of total tax revenue. The VAT reduction of manufacturing industry by the government will boost investment growth of manufacturing industry. 

3. Consumption. The decrease in retail sales raised concerns about consumption downgrading. Mortgages occupy consumption as the proportion of mortgage payments in family income is rising year by year. On the other hand, the decline in retail sales is driven by falling automobile sales. Moreover, external demand is not optimistic.