The possibility of a hard landing in the Chinese economy is relatively small

According to a report by Economic Voice's "Tianxia Caijing", international rating agency Fitch Ratings announced yesterday (28th) that it has lowered its economic growth expectations for Asia's two largest economies, China and India, this year. Fitch Ratings had previously predicted a growth rate of 8% for China's economy this year in June, but has now adjusted it to 7.8%. The forecast for India's economic growth has also been lowered from the previous 6.5% to 6%. How to view Fitch's downward adjustment of growth expectations for the economies of China and India, analyzed by Huang Zhilong, an expert at the China International Economic Exchange Center. 

Huang Zhilong: As one of the world's top three rating companies, Fitch's reports are very influential. The current reduction in the economic growth rates of China and India does reflect objective facts and future development trends.

  The growth rate of the Indian economy in the second quarter was only 5.5%, also hitting a new low in recent years. So, the economic situation in China and India is not as good as in the past two years, and in fact, BRICS countries such as Russia and Brazil have shown a significant slowdown in economic growth. 

Furthermore, looking at other indicators, the growth rate of China's exports in the first eight months has been consistently below 10%, making it difficult to achieve the annual growth target of 10%. India's currency has depreciated by 14%, and its trade deficit for the first half of this year is over 30 billion US dollars. So whether it's China or countries like India and Brazil, capital flight from these countries is very serious. 

  There are two main conditions for a hard landing: a major problem in the labor or real estate market, which is actually large-scale unemployment; The real estate market has also experienced a significant decline. 

This viewpoint is quite correct. From the recent policies of the central government, we can see that the current focus is indeed on ensuring employment. The central government has a relatively large operating space in terms of fiscal and monetary policies, especially in terms of central finance, whether adopting expansionary fiscal policies or structural tax reduction policies. In addition, in the past six months, our real estate market is not a problem of sharp decline, but may be overheated or foam again. Due to the continuous recovery of the real estate market from the first half of the year until now, the policies of restricting the sale of high priced houses in Guangzhou and suspending land supply in Beijing due to developers being too active in land acquisition have fully demonstrated that real estate prices may once again face significant upward pressure. So from these two aspects, the possibility of a hard landing for the Chinese economy is relatively small.