(Yicai Global) Dec. 7 -- More than 80 percent of the economists are optimistic about the Chinese economy in the coming month. Although they believe the downward pressure on the economy will increase next year, the economy will at least remain stable in the short term. The economists also believe it is less likely that monetary policy will be fully relaxed in the future and will remain stable and neutral, November Yicai chief economists’ survey shows.
The Yicai Chief Economist's Confidence Index of December 2017 is 50.79, unchanged from the previous month and remained above 50 for 16 consecutive months. Of the 14 economists who gave this forecast this month, two predicted a reading below 50 and other economists gave a forecast of 50 or more, which means that over 80 percent of economists is optimistic about Chinese economy in the coming month, the survey indicates.
Economists predicted mean value on November consumer price index (CPI) annual growth, which will be released this week, is 1.84 percent, lower than the 1.9 percent in October as released by the National Bureau of Statistics (NBS). The year-on-year growth rate of the Producer Price Index (PPI) will decline to 5.84 percent from the 6.9 percent growth in October as published by the NBS. The predicted mean value of the annual growth rate of total retail sales of consumer goods is 10.21 percent, up 0.21 percentage point from the number of 10 percent in October, the survey showed.
The predicted mean value of the annual growth rate of industrial added value in November is 6.15 percent, lower than the 6.2 percent registered in October as published by the NBS. The mean value of the annual growth rate of fixed assets investment is 7.18 percent, which slowed down compared with the 7.3 percent the month earlier. The predicted mean value of the cumulative growth rate of real estate development investment is 7.58 percent, which is 0.22 percentage point lower than the 7.8 percent in October as published by NBS, economists predict.
The economists predict that in the November import and export data to be released this week, the trade surplus will be reduced to USD36.074 billion compared with the October's USD38.7 billion, both declining. The annual import growth will decline from 17.2 percent in October to 11.82 percent and the annual export growth will fall to 5.13 percent from 6.9 percent in the previous month, the survey showed.
Economists expect new loans in November to increase to CNY814.752 billion (USD123.183 billion) from the previous month's CNY663.2 billion. The predicted mean value of the total social financing in November is CNY1.25 trillion, lower than the CNY1.04 trillion in October as published by the central bank. The year on year growth rate of M2 in November will rise to 8.88 percent from 8.8 percent in October as published.
21 chief economists also made a prediction on the benchmark interest rate and reserve requirement ratio (RRR). They all believe that the benchmark interest rate in this year will not change, and the central bank will not implement an overall reduction in RRR.
Economists expect the yuan to be traded at 6.64 per dollar at the end of the year -- the central parity rate of the yuan against the dollar on Nov. 30 was 6.6034.
The November official foreign exchange reserve data will be published this week. Economists expect the figure to be USD3,115.821 billion, higher than last month's released figure of USD3,109.2 billion, rising for 10 months in a row.
On November 22, the yield of 10-year quasi sovereign debt was 5 percent, and the 10-year Treasury bond yield was over 4 percent in the trading session. In the survey, 12 economists commented on the reasons for the recent weakening of the bond market. They believe that the concerns about market's liquidity shortage was brought about by two factors, namely, strengthening financial regulations and tight balance of the capital market. Two economists believe that the tightening of global monetary policy has also brought upward pressure on the domestic bond market yield.