China's property market inventory of 1 billion square meters can be digested for 5 years

After a week of intensive meetings of the General Assembly, the IMF Spring Annual Meeting finally came to an end. On April 17, local time, the last day of the spring annual meeting, IMF Vice President Zhu Min held a small press conference in Washington, and Phoenix Finance was invited to attend.

Talking about the property market: China's property market inventory still needs 4-5 years to digest
At the press conference, the author asked Zhu Min about the prospects of China's property market. Zhu Min said that there are two main problems in the Chinese real estate market: one is that the price is too high, and the other is that the inventory is too high, so it needs a two-pronged approach. "This is a long process," Zhu Min said that he can't rush to seek success.
Zhu Min also revealed an internal data to the author: "According to our previous investigation, China currently has 1 billion square meters of inventory, which takes 4 to 5 years to digest." But he also stressed that this is the data proposed one and a half years ago. If you start calculating now, it will take 2.5-3.5 years to digest the inventory.
He stressed that if the stocks are not digested, real estate business will not continue to invest, which is not good for economic growth. “To promote the growth of the property market, we can only go to stock to have new investment.”
It is worth noting that when I asked the question, I mentioned that the third- and fourth-tier cities went to stocks. I also mentioned that the housing prices in the north and the west were soaring. However, Zhu Min’s problem of soaring housing prices in first-tier cities was only passed by, and there was no key answer. Perhaps in his view, going to stock is more urgent than controlling house prices.

The world is watching two things, one of which is about China.
As the vice president from China, Zhu Min’s entire conference is not far from China. He said at the beginning of the press conference: "Now the world, whether it is a financial institution or a central bank, is watching two things. One of them is about China."
Zhu Min said that the two most concerned issues in the world are: whether the Chinese economy is stable and whether the Fed raises interest rates this year.
This week's China's first quarter GDP growth rate reached 6.7%, which is very encouraging. But Zhu Min also saw the challenge facing the Chinese economy: "The deep-seated problems of China's economy are still deeply rooted, such as de-capacity."
He believes that China's ability to produce 150 million capacity is a considerable challenge, which is almost equivalent to the full capacity of a developed country.
Zhu Min mentioned "three go" in the press conference: going to capacity, deleveraging, and going to zombie companies. "However, when it comes to capacity, when it comes to zombie companies, it will definitely increase non-performing loans. How to maintain financial system stability and bank security at the same time is a big challenge."
For the “debt-to-equity swap” that is now hotly debated, Zhu Min emphasized that debt-to-equity swaps can only be applied to companies with good business conditions. For some "bad enterprises" with poor management and bad assets, "debt-to-equity swaps will pass the risk to the financial market, causing greater volatility." For such companies, he suggested that they can take debt restructuring to make them reborn.
However, despite the huge challenges, he is still confident in the Chinese economy and the Chinese government's ability to govern. He said: "The stabilization of the Chinese economy shows that the international community still encourages China to continue reforms."

The biggest change in the economy this year: the global market is closely linked
During the Spring Festival this year, the Japanese stock market plunged 8%, European stocks plunged, and US stocks subsequently dipped. Investors felt that the global stock market played “Lianliankan”, and no market could “be alone.” During the stock market crash last year, the violent shocks in the Chinese market made investors around the world feel worried.
Zhu Min said: "The most significant change in the world economy this year is the close linkage of the global market." The market has a spillover effect, and both US stocks and A-shares have a close impact on the global market.
As vice president of the IMF, he also cited internal data from the IMF. He said that there is now not only spillover effects (the impact of domestic financial markets on other countries' financial markets) but also spillback (the impact of financial market volatility on the country).
According to IMF data, the economic growth of developed countries is 1 percentage point, and the emerging economies will have a positive growth of 0.44%. An increase of 1 percentage point in emerging economies will also lead to a positive growth of 0.2% in developed countries. Although the ratio is relatively low, “0.2 economic growth is still very large.”
Zhu Min once again stressed: "No matter where the fluctuations in this world occur, it will eventually be transmitted back to the US market. This is the biggest change in the global economic market today." The global economy has truly become a global village. "Village" No country will be an island. .
Although the world is already a village, Zhu Min believes that central bank policies will continue to differentiate. He said that Japan and Europe's negative interest rate policy has not yet bottomed out, the Fed has a prospect of raising interest rates, and there is room for differentiation in central bank policies, and differentiation will continue, causing global capital flows and financial market volatility.
As for the Fed to raise interest rates, he said that the IMF has also reminded the Fed to raise interest rates cautiously, but the final decision is still in the hands of the Fed.
The press conference lasted nearly an hour, from China to the world, from the property market to talk about the Fed rate hike. But perhaps in one sentence, it can be summed up: "The prospects are bright, but the road is tortuous." The road is long and the road is long, and China and the world will continue to search for it.

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