According to the results of the survey on the confidence of 100 Chinese economists in the third quarter conducted by the China Statistical Information Service Center of the National Bureau of Statistics in September 2021, the confidence index of economists in the third quarter fell below the critical value from the high level since the third quarter of 2020. Both the period economic prosperity index and the expected economic prosperity index fell more.

Looking forward to the next six months, economists expect the global economic recovery to weaken; economists are more worried about China’s employment, consumer price fluctuations are expected to increase, production prices fluctuate within a narrow range; consumption and investment demand are expected to stabilize and weaken, and goods exports It has cooled; housing prices in first-tier cities are expected to decline steadily, and housing prices and sales in provincial capitals and other cities will fall.

1. The economist confidence index has fallen from a relatively high level

The Economist Confidence Index for the third quarter of 2021 was 90.4, which was 38.3 points lower than the previous quarter and returned to the normal level of the year. Among them, the immediate economic prosperity index was 93.6, 37.3 points lower than the previous quarter; the expected economic prosperity index was 87.2, 39.4 points lower than the previous quarter (see Figure 1).

Figure 1: Trends in the confidence index of Chinese economists

Source: National Bureau of Statistics. Drawing: Yu Zongwen

Specifically, 70% of economists believe that the current economic situation in China is “okay”, and the proportion is increased by 7 percentage points from the previous quarter; 18% believe that it is “bad”, which is an increase of 15 percentage points; 12% believe that it is “good”, which is a decrease of 22 percentage points. percentage point.

Looking forward to the next six months, 49% of economists expect China’s economic situation to be “approximately flat”, with the proportion increasing by 3 percentage points from the previous quarter; 32% expect “deterioration”, an increase of 18 percentage points; 19% expect “improvement”. A reduction of 21 percentage points.

2. The global economic recovery is expected to weaken

(1) The proportion of economic improvement in advanced economies is expected to decline, and the Japanese economy is relatively weak

Regarding the economic trends of advanced economies in the next six months, 42% of economists expect “improvement”, a decrease of 22 percentage points from the previous quarter; 45% expect “basic stability”, an increase of 12 percentage points; 13% expect “deterioration” “, an increase of 10 percentage points.

Regarding the US economic trend in the next six months, 47% of economists expected “improvement”, a 29% decrease from the previous quarter; 39% expected “basic stability”, an increase of 21%; 14% expected “deterioration”. Increase by 8 percentage points.

Regarding the economic trends in the euro area in the next six months, 41% of economists expect “improvement”, a decrease of 17 percentage points from the previous quarter; 43% expect “basic stability”, an increase of 5 percentage points; 16% expect “deterioration” , An increase of 12 percentage points.

Regarding the trend of the Japanese economy in the next six months, 28% of economists expect “improvement”, a decrease of 7 percentage points from the previous quarter; 50% expect “basic stability” with a slight drop of 1 percentage point; 22% expect “deterioration” , An increase of 8 percentage points.

(2) The proportion of economic deterioration in emerging economies is expected to increase, and the Russian economy is relatively stable

Regarding the economic trends of emerging markets and developing economies in the next six months, 24% of economists expect “deterioration”, which is an increase of 9 percentage points from the previous quarter; 55% expect “basically stable”, which is basically the same as the previous quarter; 21% expected “improvement”, a decrease of 8 percentage points.

Regarding Brazil’s economic trends in the next six months, 35% of economists expected “deterioration”, an increase of 11 percentage points from the previous quarter; 48% expected “basic stability”, a decrease of 6 percentage points; 17% expected “improvement”. Reduce by 5 percentage points.

Regarding the Indian economic trend in the next six months, 40% of economists expected “deterioration”, a decrease of 12 percentage points from the previous quarter; 42% expected “basic stability”, an increase of 16 percentage points; 18% expected “improvement”. Reduce by 4 percentage points.

Regarding Russia’s economic trends in the next six months, 61% of economists expect “basically stable” and the proportion remains the same as the previous quarter; 21% expect “improvement”, a decrease of 7 percentage points; 18% expect “deterioration”, an increase of 7 percentage points. Percentage points (see Figure 2).

Figure 2: For the economic trends of various countries in the next six months, economists believe

Source: National Bureau of Statistics

(3) Anticipated weakening of cross-border investment and global trade growth

Regarding global foreign direct investment in the next six months, 33% of economists expect to “rise”, and the proportion is 21 percentage points lower than the previous quarter; 41% expect to be “flat” and increase by 9 percentage points; 26% expect to “decrease” and increase 12 percentage points.

Regarding the global trade in goods in the next six months, 44% of economists expect “up”, which is a 22% decrease from the previous quarter; 41% expect to be “flat” and increase by 15%; 15% expect to “decrease” and increase 7 percentage points.

Regarding the global service trade volume in the next six months, 41% of economists expect to “rise”, which is a decrease of 18 percentage points from the previous quarter; 43% expect to be “flat” and increase by 10 percentage points; 16% expect to “decrease” and increase 8 percentage points.

(4) Expectations for price increases in the United States and the Eurozone are still strong, while Japan fluctuates within a narrow range

Regarding the trend of U.S. CPI in the next six months, 51% of economists expect a “rise”, which is a decrease of 18 percentage points from the previous quarter; 33% expect “narrow fluctuations”, an increase of 8 percentage points; 16% expect “decrease”. Increase by 10 percentage points.

Regarding the trend of the Eurozone CPI in the next six months, 40% of economists expect a “rise”, which is a 7 percentage point decrease from the previous quarter; 51% expect a “narrow range fluctuation” with a slight increase of 1 percentage point; 9% expect a “decrease” “, an increase of 6 percentage points.

Regarding the trend of Japan’s CPI in the next six months, 62% of economists expect “narrow fluctuations”, which will increase the proportion by 5 percentage points from the previous quarter; 24% expect “rise” and decrease by 8 percentage points; 14% expect “decrease”. Increase by 3 percentage points.

3. Economists expect China’s employment, consumption and investment to stabilize and weaken

(1) Employment concerns have increased, consumer price fluctuations are expected to increase, and production prices fluctuate within a narrow range

1. There are worries about the expected employment stability. Regarding the employment situation in China in the next six months, 60% of economists expect “employment stability”, which is 14 percentage points lower than the previous quarter; 36% expect “unemployment rate rise”, an increase of 32 percentage points; 4% expect “unemployment rate” Decrease”, a decrease of 18 percentage points.

2. The volatility of consumer prices is expected to increase. Regarding the trend of China’s CPI in the next six months, 55% of economists expect “narrow fluctuations”, which will increase the proportion by 31 percentage points from the previous quarter; 42% expect “gradual rise” and a decrease of 29 percentage points; 3% expect “gradual decline” “, a reduction of 2 percentage points.

3. The ex-factory prices of industrial producers are expected to fluctuate within a narrow range. Regarding the trend of China’s PPI in the next six months, 42% of economists expect “narrow fluctuations”, which will increase the proportion by 8 percentage points from the previous quarter; 31% expect “gradual decline”, an increase of 1 percentage point; 27% expect “gradual rise” “, a decrease of 9 percentage points (see Figure 3).

Figure 3: For the trend of China’s CPI and PPI in the next six months, economists believe

Source: National Bureau of Statistics

(2) Consumption and investment demand is expected to stabilize and weaken, and the export of goods will cool down

1. It is expected that consumer demand will stabilize and decline. Regarding the current consumption situation, 54% of economists believe that it is “poor,” and the proportion is 28 percentage points higher than the previous quarter; 41% believe that it is “okay”, which is a decrease of 18 percentage points; 5% believe that it is “good”, which is a decrease of 10 percentage points. Looking forward to the next six months, 54% of economists expect consumer demand to be “approximately flat”, and the proportion will increase by 10 percentage points from the previous quarter; 28% expect “deterioration”, an increase of 18 percentage points; 18% expect “improvement” and decrease 28 percentage points.

2. The investment demand is expected to be basically stable. Regarding the current investment situation, 73% of economists believe that it is “okay”, which is a 16% increase from the previous quarter; 21% thinks it is “bad”, which is an increase of 6%; 6% thinks it is “good”, which is a decrease of 22%. Looking forward to the next six months, 52% of economists expect investment demand to be “approximately flat”, and the proportion will increase by 5 percentage points from the previous quarter; 28% expect “deterioration”, an increase of 13 percentage points; 20% expect “improvement” and decrease 18 percentage points.

3. The export of goods is expected to cool down. Regarding the export situation of goods in the next six months, 46% of economists expect to be “approximately the same,” a decrease of 2 percentage points from the previous quarter; 34% expect “deterioration”, an increase of 12 percentage points; 20% expect “improvement”. Decrease by 10 percentage points. Regarding the import situation of goods in the next six months, 59% of economists expect to be “approximately the same”, an increase of 4 percentage points from the previous quarter; 22% expect “deterioration”, an increase of 8 percentage points; 19% expect “improvement”. Decrease by 12 percentage points (see Figure 4).

Figure 4: Regarding the situation of China’s goods import and export in the next six months, economists believe

Source: National Bureau of Statistics

Regarding the balance of trade in goods in the next six months, 46% of economists expect a “decrease in surplus”, which is a 3 percentage point increase from the previous quarter; 28% expect a surplus to be “unchanged”, an increase of 7 percentage points; 26% expect a “surplus” “Increase” and decrease by 10 percentage points; no economist expected “a deficit.”

(3) The situation of using foreign capital is expected to be relatively stable, the yields of long- and short-term government bonds remain stable, and the stock market index fluctuates slightly

1. The situation of using foreign capital is expected to be relatively stable. Regarding the situation of China’s foreign direct investment (FDI) in the next six months, 57% of economists expect to be “approximately the same,” an increase of 11 percentage points from the previous quarter; 29% expect “deterioration”, an increase of 18 percentage points; 14% It is expected to “improve”, a decrease of 29 percentage points. Regarding the situation of China’s outward direct investment (ODI) in the next six months, 62% of economists expect to be “approximately the same”, and the proportion will increase by 15 percentage points from the previous quarter; 24% expect “deterioration”, an increase of 8 percentage points; 14% It is expected to “improve”, a decrease of 23 percentage points.

2. The yield of long- and short-term government bonds is expected to remain stable. Regarding the trend of China’s 10-year treasury bond yield in the next six months, 58% of economists expect “approximately flat”, 24% expect “decrease”, and 18% expect “rise”; for the next six months, China’s 3-month treasury bond Yield trends, 55% of economists expect “approximately flat”, 25% expect “up”, and 20% expect “decrease”.

3. The stock market index is expected to fluctuate slightly. Regarding the domestic stock market index trend in the next three months, 67% of economists expect “small fluctuations”, and the proportion will decrease by 4 percentage points from the previous quarter; 20% expect “up” and decrease by 5 percentage points; 13% expect “down” , An increase of 9 percentage points.

4. Housing prices in first-tier cities are expected to decline steadily, and housing prices and sales in provincial capitals and other cities will decline

Regarding the trend of housing prices, the survey results show that for first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, 60% of economists expect housing prices to be “flat” in the next six months, and the proportion will increase by 9 percentage points from the previous quarter; 27% expect “decline” and increase by 21%. Percentage points; 13% are expected to “rise” and decrease by 30 percentage points.

For provincial capital cities, 48% of economists expect house prices to “fall,” an increase of 39 percentage points from the previous quarter; 42% expect to be “flat”, a decrease of 18 percentage points; 10% of economists expect a “rise”, a decrease of 21 percentage points.

For other cities, 73% of economists expect house prices to “fall,” a 33 percentage point increase from the previous quarter; 24% expect to be “flat”, a decrease of 27 percentage points; 3% expect a “rise”, a decrease of 6 percentage points (see Figure 5).

Figure 5: For the trend of China’s housing prices in the next six months, economists believe

Source: National Bureau of Statistics

Regarding real estate sales, the survey results show that for first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, 49% of economists expect sales to “decrease”, which is an increase of 30 percentage points from the previous quarter; 45% are expected to be “flat”, a decrease of 6 percentage points; 6 % Is expected to “rise” and decrease by 24 percentage points.

For provincial capital cities, 52% of economists expect sales to “decrease,” which is 33 percentage points higher than the previous quarter; 40% expect to be “flat”, down by 16 percentage points; 8% expect to “rise”, down by 17 percentage points.

For other cities, 73% of economists expect sales to “decrease”, a 28% increase from the previous quarter; 23% expect to be “flat”, a decrease of 17%; 4% expect a “rise”, a decrease of 11%.

5. Economists’ views on current hot issues and suggestions for measures

The first is to stabilize macro policy expectations and strengthen inter-cyclical adjustments. The results of the survey show that economists choose the highest proportion of measures that should be taken to make macroeconomic policy cross-cyclical adjustments to “do a good job in inter-annual macro policy convergence”, followed by “smooth the domestic economic cycle and release the potential of residents’ consumption.” “Monetary credit matches economic growth.” The rest are “employment policies actively respond to population and economic structure adjustments”, “stabilize tax incentives for individual industrial and commercial households, small and medium-sized enterprises”, “implement a long-term real estate regulation mechanism”, “grasp the progress of budgetary investment and local government bond issuance”, and “implement mid-term implementation.” Financial planning and management” etc.

The second is to deepen the reform of income distribution and improve the wage guarantee mechanism. As for the current priority measures to be taken to deepen the reform of income distribution, economists choose a higher proportion of “sound wage determination, reasonable growth and payment guarantee mechanism” to “promote more low-income people into the ranks of middle-income”, followed by ” Intensify adjustments in social security and transfer payments and improve accuracy, “strengthen tax regulation and supervision of high-income earners,” and “increase residents’ property income through multiple channels.” The rest are “clean up and standardize unreasonable income, and resolutely ban illegal income”, “protect property rights and intellectual property rights”, “actively and steadily levy real estate taxes” and “promote the levy of inheritance tax and gift tax”.