TextbyZhangJingwei
TheworldonceagainembracedtheBoaoForumforAsia(BFA):Its2016annualmeetingwasheldfromMarch22to25inBoaoofQionghai,HainanProvince.InattendancewereChinesePremierLiKeqiangandstateleadersofmorethan10countries,aswellassome300guestspeakersand1,700delegates.
The15-year-oldBFAhasrisenalongsideChina鈥檚rapiddevelopmentandaddressedglobalconcernsoftheeconomiccrisisaswellasexploringmarkettransformationsintheaftermath.Themed鈥淎sia'sNewFuture:NewDynamicsandNewVision,鈥漚lmosteverytopicatthisyear鈥檚BFAincludedtheword鈥渘ew,鈥漞videnceofanexcitingtimewithdevelopmentsinentrepreneurialapproachesandinnovation,especiallytheinternet+andadvancesinmacroeconomics.AlphaGo鈥檚victoryoverLeeSe-dolturnedouttobeoneofthebuzziertopicsattheForum.
Overthepasttwoyears,China鈥檚economic鈥渘ewnormal鈥漢astriggereddoubtaroundtheworld.TheglobalmarkethasplaceditsfocusonChinaandtheeconomicdownturnof6percentingrowthpace:GlobaleconomicsectorsthatdependonChinasuddenlylosttheirdrivingforce.Theresulthasbeenanxietyinglobalmarkets,particularlyintheWest.
WesterncountrieshavebeenworriedaboutChina鈥檚longandstable,yetspeedyeconomicgrowth.ManyanalystshaveexpressedhopetoseeChina鈥檚economicclout,whichisreversingtheglobaleconomicorder,diminish.However,globalmarketshavecometorelyonChina鈥檚rapideconomicgrowth(whichhascontributedover50percentofglobaleconomicgrowth)evenmoreaftertheglobaleconomiccrisisspreadfromAmericaandEurope.
Asaresult,China鈥檚economic鈥渘ewnormal鈥漢asbecomeacontradictionbetweendomesticself-confidenceandforeignquery,whichassumesthatChinaisdecliningeconomicallybecauseofvolatilityinstockandforeigncurrencymarkets.GeorgeSoroshaughtilyshort-soldtheRMBonlytolose,andMoody鈥檚dubiouslydowngradedChina鈥檚sovereigncreditrating.
AfterthelengthyeconomicrecoveryoftheUnitedStates,theFederalReservedroppedquantitativeeasingtoraiseinterestrates,whichbotheredtheglobalmarket.Today,Fed鈥檚interestratehikeshaveslowed.
Priortothisyear鈥檚NPCandCPPCCannualsessions,Chinawasrockedbyextraordinarychaosinitsstockandforeigncurrencymarkets.Thesituationworsenedwhentherealestatemarketwasstruckbysluggishnessand鈥渋ndigestion.鈥漀evertheless,BeijingsenttheworldanexplicitsignalduringtheG20WorldPolicyConferenceandtheTwoSessionsthatChinacankeeptheRMBatitscurrentvalueandmaintainstabilityofthestockmarketthroughsystematicreformandwell-organizedsupervision.
DatashowsthatthestockmarketsinShanghaiandShenzhenhavereboundedfromthedownturns.Ofcourse,manymovingpartsinfluencethesemarkets,butoverall,theyaresettlingdown.TheRMB,forinstance,hasachievedsteadygrowthafterimplementationofexchangeratereforminAugust2015.
StockandforeigncurrencyarethemostvisibleindicatorsoftheChinesemarket.Whentheyarechaotic,the鈥渘ewnormal鈥漣sseenasanewcrisis.Whentheyarestable,theglobalmarketquicklyregainstheirfaithinChina鈥檚economy.
Domesticinvestorslookatrealestatealongwiththerisesandfallsofthestockmarket.Whenthestockmarketisstable,mediumandsmallerinvestorsaremoreconfident,inspiringtheformationofreasonablereformmeasuresbysupervisorsofthecapitalmarket,whichcanbeacceleratedatitsconvenience.
鈥淪luggishness鈥漣nthefirst-andsecondtiercitiesandstagnationinthethird-andfourth-tiercitieshappensimultaneouslyalongwithdifferentiationoftherealestatemarket.Alongwithadjustmentofpolicies,attentionshouldbeplacedonthebehaviorofinvestors,whooftenmakeirrationalmovesinhopesofquickpayoffs.Amajorconcernforpolicymakersispreventingsuchriskyinvestmentthroughpolicyguidanceandmarketallocation.
Reformisn鈥檛toblamefortoughmarketissuesduringChina鈥檚structuraladjustmentto鈥渘ewnormal.鈥漅ather,theseissuesaretheresultofirrationalinvesting.Thechallengeforpolicymakersistogetmediumandsmallscaleinvestorswhotendtowardsmarketspeculationtoinvestmorewisely.
TheBFAhopesthatelitesfromthepoliticalandcommercialcirclesaroundtheworldwillbuildfaithinChina鈥檚economic鈥渘ewnormal.鈥滻talsoaimstoinspireinnovationandoriginalitytobedeeplyrootedinChinaandAsiaandtobreedneweconomiesaroundtheworldandhelpthemthriveonnewplatformsofinternet+and+internet,sothattheeconomiesofChina,Asia,andtheworldcanreachanewera.
TheauthorisaresearcherattheChaharInstitute.