On March 19, 2022, the Macro-Finance Salon (No. 176) co-hosted by the International Monetary Institute (IMI) of Renmin University of China (RUC) and the EMBA Center of the School of Finance, RUC, was held online and live streamed. The theme of this salon was “The Outlook for China’s Economy and Capital Markets in 2022”.

Guan Qingyou, Dean and Chief Economist of Reality Institute of Advanced Finance, delivered a keynote speech. This speech was commented on by Liu Yi, Founder and Investment Director of Yan Hang Investment; Xiao Geng, Dean of Institute of Policy and Practice, Shenzhen Finance Institute, Chinese University of Hongkong and Chairman of Hong Kong Institution for International Finance; Zhao Xijun, Co-Dean of Academy of China Capital Market, RUC; Zhong Zhengsheng, Chief Economist at Ping An Securities; and Zhou Guangwen, President of Ginkgo Global and President of gintong.com. The salon was presided over by Hu Bo, Director of the EMBA Center.

Guan Qingyou made a keynote speech entitled “The Outlook for China’s Economy and Capital Markets in 2022”. According to him, China is under relatively great pressure to achieve the 2022 GDP target of 5.5%. China needs to formulate more forward-looking macroeconomic policies and step up efforts to maintain steady growth. Faced with three black swans globally and three grey rhinos in China, China should pay more attention to domestic issues. The meeting held on March 16 by the financial stability and development committee under China's State Council is of great significance. This meeting not only boosts market confidence but also bolsters market stability by clearly responding to issues and policies of great interest to the market. Competent authorities should deal with phenomena in many sectors that are reflective of the fallacy of composition through policies. In addition to maintaining steady growth in 2022, two major suggestions were made by Guan Qingyou. First, control over the housing market should be relaxed with greater strength and at a faster speed while adhering to the principle that “houses are for living in, not for speculation”. Second, whether the restriction on car ownership should be lifted in eight cities including Beijing, Shanghai and Guangzhou should be thought over. In terms of policy options, we are still in a window period of expansionary monetary policy and loose credit. Inflation is the valve of monetary policy. As the producer price index (PPI) declines from its earlier peak and the consumer price index (CPI) remains at a low level, the monetary policy is being gradually eased. Regarding policy recommendations, China has sufficient instruments of monetary policy available and should adopt a more expansionary monetary policy. Given the window period of the reserve requirement ratio (RRR) cut in March and interest rates cut in April, it is highly likely that the reserve requirement ratio would be lowered recently. When it comes to asset strategy, the long-short game is fierce and structural opportunities should be seized. As the three major surprises are being rectified and the three major feel-good factors are being catalyzed, there is a market trend of short-term oversold bounce. Hence, Mr. Guan is optimistic about high prosperity growth, steady growth and reflation. As the price earnings to growth ratio (PEG) has entered a reasonable range and the Q1 report is to be released, there is still room to ease the monetary policy and high prosperity growth is anticipated to rebound under the catalyst of better performance.