The "national bull market" is risky, and the government has blown up the real estate bubble with $60 trillion

Chinese Academy of Social Sciences Institute of Finance researcher Yi Xianrong wrote that only China's stock market towards a mature market, only the solid support of the real economy, can create a real "national bull market." Otherwise, China's economy would be more at risk if a stock market bubble were used to mask the property bubble. In this regard, investors have to pay close attention to the current "policy and capital"-driven "national bull market" risks, investment should be trend-based rather than greedy. This article has some reference significance. China's Shanghai Composite Index has risen 120 percent in less than a year from 2,000 in July 2014 to 4,398 on April 22, 2015. Stocks rose more than the world. As you can see, China's A-share index is not only rising rapidly, but also the stock market turnover record after record, daily turnover of 1800 billion yuan, no highest, only higher. Investors flocked in, opening more than 3.5 million accounts the week before. At present, China's stock market bull run, can not be explained by real economic changes, on the other way just released economic data is very weak, the first quarter of gross domestic product (GDP) growth is the lowest since 2009, foreign trade imports and exports decline, insufficient consumption of residents, real estate sales continue to decline, etc. , can not be explained by the general investment theory and model, the recent rise of China's A-shares completely outside any rational analysis. The current rapid rise of China's A-shares is entirely the result of the Chinese government's macro-control policy thinking shift, the result of government policy. Because, since 2014, in the face of mounting pressure from China's economic growth, the Chinese government has launched a series of rescue policies, but the results have not been satisfactory. Even in 2015, China's GDP growth fell to its lowest level in recent years. In particular, China's real estate market is more unaffordable, still depressed. If property prices fall and real estate investment falls across the scale, it will be very difficult for China's economic growth to stabilize and overcapacity to be resolved. Now that China's economy has lost the support of a property bubble, the government, like the United States, Japan and the European Central Bank, has begun to play a "national bull market" in the hope of lifting the stock market to rescue the Chinese economy. Because, since the financial crisis in the second half of 2008, the U.S. has adopted rounds of quantitative easing, injecting nearly $4 trillion in liquidity into the market, more than tripled the U.S. stock market. The U.S. economy also recovered in the process and finally emerged from recession. The same is true in Japan and Europe. For China, the previous round of economic growth and prosperity, the government spent nearly Rmb60, 000bn on financing to blow up a huge real estate bubble. Despite this rapid growth in China's GDP, a more than 40 per cent appreciation of the renminbi against the rest of the world's currencies and a squeeze on the world's second-largest economy, the blowing real estate bubble is no longer sustainable. The Rmb60, 000bn debt not only presents huge financial risks to China's economy, but also leads to a severe overproduction of housing and many industries, as well as a severe shortage of domestic demand. If the domestic real estate market prices do not return to rationality, let the domestic residents of housing consumption demand released is simply impossible (recently the government launched a lot of real estate rescue policies, but also want to release the so-called improved demand, but housing prices do not return to rationality can have a very limited effect). However, an investment-led real estate market to consumer-led real estate market transformation, not only easy to lead to huge shocks in the real estate market, but also to pay high costs. And who will pay for these costs and costs is the current problem facing the Chinese government. In this case, the Chinese government's macro-control policy began to change its mind, hoping to create a "national bull market", with the stock market bubble instead of the hard-to-blow real estate bubble. Don't look at now there are still people shouting, the government housing market after the New Deal, the domestic real estate market will start to rebound and house prices will rise, but this just wants to affect market expectations, but the domestic real estate market expectations have long changed, because the national housing prices have been falling for more than eight months, as long as the real estate market prices are falling, housing investors will be difficult to return to the real estate market. The Chinese government has spawned a "national bull market" in the stock market, hoping to play a double-edged role. Because, earlier, China's stock market has been in a prolonged downturn for seven years, now has given birth to a "national bull market", one is to bring a large amount of money into the stock market, improve the financing capacity of the stock market, thereby reducing the financing costs of China's financial markets, to solve the current financing difficulties in China's financial markets, to resolve the excessive debt risk of domestic enterprises; Second, we can create wealth effects by creating a boom in the stock market and replacing the real estate bubble. This will not only help residents' consumption growth, domestic demand expansion, but also help to digest China's real estate market serious overproduction, save China's real estate market, but also can boost market confidence, create a new atmosphere of economic growth, to avoid a heavy setback in market confidence and let the domestic economy hard landing prediction automatically realized. From the recent development of the domestic stock market, not only the Shanghai Composite Stock Market Index has risen more than 120% in the past year, the stock market's money-making effect and wealth effect is gradually emerging, and domestic residents already know the government's intention to replace the real estate bubble with the stock market bubble, have poured into the stock market, so that the domestic stock market out of the unprecedented hot scene. Daily trading volumes hit a record high, creating an unprecedented boom for China's stock market. In fact, there is nothing right or wrong about the Chinese government's time-for-space approach, and the key is whether it can find growth points in China's real economy and create a new engine of economic growth. As in the United States, there are internet high-tech industries, shale oil and gas, modern agriculture and so on. At present, China's Internet, Belt and Road, new energy and so on may become a new growth point of China's economy. But it also depends on whether Beijing's wisdom and related incentives can get china's economy out of its "real estate" predicament. If China's economy can't get rid of the dependence of "real estate" economy, China's real economy will be difficult to rise. Without the support of the real economy, the "national bull market" spawned by the Chinese government would not be sustainable. In addition, whether there are major breakthroughs in China's stock market reform, such as whether the issuance system is shifting to the registration system, the new market operation rules of the stock market, investment concepts, investor protection system, etc. can be established. Otherwise, the funds collected by the stock market will not flow smoothly to the real economy, and China's stock market will not be able to develop healthy and sustained. Only when China's stock market moves towards a mature market, and only with solid support from the real economy can a real "national bull market" be created. Otherwise, China's economy would be more at risk if a stock market bubble were used to mask the property bubble. In this regard, investors have to pay close attention to the current "policy and capital"-driven "national bull market" risks, investment should be trend-based rather than greedy.