On September 25, 2019, BOC Research Institute published the Economic and Financial Outlook (2019Q4) (hereinafter referred to as the “Outlook”) in Beijing. The Outlook reviewed the economic and financial operation of China and the world at large and the operation of global banking industry in the first three quarters of 2019, and looked into the economic and financial pictures, as well as the future development trend of global banking in 2019Q4.
Looking at the economic and financial situation of the world, the Outlook says that in Q3 of 2019, the exacerbation of trade frictions around the globe has caused a shrinkage of manufacturing production and international investment, dealt a blow to business confidence and made the slowdown of economic growth more obvious. Looking forward to the future, the global economy will be facing risks of potential financial volatility caused by the easing of monetary policy worldwide and the financial turbulences caused by the vulnerability of some emerging markets. High-tech industries are a great driving force behind American economy. In the future, science and technology competition will emerge as a key factor to lead and change the international political and economic landscapes. The uncertainty in Brexit will impose infliction upon the European economy, and the UK may delay leaving the EU. Such factors as the rise of US dollar index and the risk-off sentiment will ease the growth of US dollar credit to borrowers outside the US, and there will be capital flight in emerging markets. The QE policy will find it hard to curb the tightening trend of US dollar liquidity.
With respect to China’s economic and financial situation, the Outlook believes that in in Q3 of 2019, China’s economy faced a more severe and complicated environment both internally and externally. Against the slowing external demand, coupled with the sluggish domestic demand, the Chinese economy was put under increasingly bigger downward pressure, and the country’s GDP growth is expected to slow further to 6.0% in Q3. Looking into Q4, the external environment will remain complicated and changeable. However, alongside the restart of China-US trade talks and the implementation and effect-taking of the policies on ensuring “the stability of employment, the financial sector, foreign trade, foreign investment, domestic investment and expectations”, there will be more positive factors to protect the stable operation of Chinese economy, which is bound to become stable in Q4. The GDP is expected to grow by 6.2% around in 2019. In terms of macro-economic regulation and control policies: First, the fiscal policy will increase strength and efficiency; second, the monetary policy will continue to resort to appropriate countercyclical adjustments in proper directions at a suitable time; third, the transformation and upgrading of industrial structure will be accelerated; fourth, real estate regulation and control will focus upon stabilization; and fifth, the countercyclical regulatory mechanism will be established and improved.
