Good medium-term to short-term capital market uncertainty

 Liu Yuanchun: the capital market in China from the macro point of view, medium to good, but with a strong short-term uncertainty.
Liu Yuanchun: mainly from the mid-cycle perspective, our entire economy is still in a boom, so The boom should be said that more than three years, in the short term should be said that the present example, the past few months, we often from the perspective of macro-control, short term more than a quarter to a year, this range.
Liu Yuan Chun: The recent uncertainty has several strong aspects, the first from the short-term macro-economic point of view, this uncertainty is reflected in the main one is the problem of overheating and inflation has begun to show, but on the other hand, we can see that our external environment on the whole the negative economic trend with a strong role. from the current January and February data on the whole is concerned, especially the foreign trade surplus, this decrease is particularly great. And this big, in China to very important to talk about the stock market is a very important financial support surface, it is the whole problem of excess liquidity, while the excess liquidity comes mainly from our foreign exchange reserves. the current situation changes in the external environment, a substantial trade surplus is down, another one, the flow of international capital is likely to occur a reversal.
Therefore, the result of the foreign exchange reserves this year, that is, a period of two to three months may see a lot of turbulence. and this the fundamental instability of our financial support base may have a great impact, of course, the surface of the funds to support our overall atmosphere of the entire stock market will have a huge impact, this is the first aspect I speak.
Liu Yuanchun : Second, the current January and February, particularly in the credit volume above, and the operating rate of the projects under construction this project, as well as the recently announced higher CPI and PPI, the state and further strengthen the determination of further tightening . The signals given during the two sessions was very clear. So which depend on further tightening of the equipment is now under the leadership of the central bank and related are talking about, the number may be from the original type, that is raising the deposit reserve payment rate, the interest rates for this. interest rates and cash flow in terms of their will to have a huge impact, that we just talked about, the whole of China's foreign trade surplus, the total amount of foreign exchange reserves may affect our overall supply of funds total, another, the interest rate adjustment will affect our capital structure changes, which will lead to changes in the total.
these two aspects for us in terms of the stock market, these two aspects of macro it In the short term is a bad news, this may be we are more concerned about a problem.
But another, we just talked about some uncertainties, it is important that we have from the entire 2007 and 2008 This month the macroeconomic fundamentals, is still very good. our entire 2007, including two months, we have a large number of listed companies, its performance is very good throughout the year we average .07 The profit growth is 35%, a majority of listed companies in which more than 50%, and even some double, in a way that a data value from the pure investment terms,cheap UGG boots, should be said that the investment value of Chinese enterprises is very good.
and such a trend may continue in 2008 should continue, although there are some basic example, we are talking about raw materials and agricultural products, and so the negative effects of rising prices, but the entire Chinese macro-economy, it We often talk about the whole economies of scale, scope, deepening the division of labor, and our institutional changes in the overall economy, this effect following its profitability and competitiveness is improved significantly, and in recent years have witnessed a qualitative changes.
Liu Yuanchun: first because in fact the reversal of global liquidity in the end the impact of China's capital, in the end what? we generally think that in theory there are two possible, one may, the risks of investing in the United States big, so his search for new investment sources, to China, but if the sub-prime crisis triggered by the global changes that affect the entire world all the investment risk, then the global funds may be looking for safer investments, The investments are generally developed treasury bills, rather than developing and emerging market equities.
Liu Yuanchun: the initial impact of the subprime crisis is to go out of its funds, but it is a great influence on the sub-prime crisis then, it will cause global funds to the state for recycling centers. I just provided a very important message that the emerging stock markets from the point of view, but also from our national data, go to the back.
Liu Yuanchun: one is of course the entire credit amount in January, January the total amount of heavy volume 800 billion of credit, 800 billion is a concept? in China, we generally speaking, in 2007 our entire money supply is 3.8 trillion, an average of more than 2000 billion per month, but we have about 800 billion in January, of course, where there is a side crunch as reasons for the fourth quarter is not on-line, but even if we removed it out, this is not normal. So this two factors added together, I think it is the monetary authorities are determined to further tightening, and this time the release of a strong signal, it is necessary to guide the investors,UGG boots clearance, including the stock market.
Liu Yuanchun: I have this to say concerning the , the price coupled with investment issues, and then raised the interest rate is very determined, very determined in the short term. Of course the second aspect,UGG boots, Bao comes between the stock and housing market, through our research last year found that in the whole of China Prior to 2001, our stock market and the housing market is showing a seesaw effect, that is a party to the other party by up to
bounced, they were to exercise, but in fact since 2005 the interaction between them formation mechanism, the interaction mechanism is that we talked about through the wealth effect, and then through the chain investment and so these measures to make housing and stock prices double lift of this phenomenon. this phenomenon in terms of course a very important background, that is, excess liquidity, and the revolutionary changes in the structure of wealth, caused the two.
Liu Yuanchun: This problem seems to follow the stock market, although that seems a bit remote,bailey UGG boots, but in fact may still be a close linked. It is very important there, that the foam in the treatment There is a basic criterion, that we have to digest the bubble, but can not pierce the bubble, which is a basic.
Liu Yuanchun : Overall, China's stock market is in a growth stage, growing adjustment is inevitable, such as a sharp correction in emerging market countries is inevitable and essential.