Looking forward to 2021! Professor Jun Qian Attends Yi Cai Special Program Discussing Economic Trends and Investment Opportunities in the Year of Ox

Release time：2021-02-23    

China took the lead in reviving its economy after the global outbreak of COVID-19. By the end of 2020, China’s total output had returned to the level before the epidemic. In the year 2021, the traditional year of ox, comes the second half of China’s economic revival, and begins the 14^th five-year plan. How will China’s economy develop this year? How will it build a new engine under the strategic support of promoting dual circulation development? And what kind of “bull” or strong power will it be in the capital market?

The other day, Professor Jun Qian, Executive Dean of FISF, attended Brain Storm, a special program on Yi Cai for the year of ox, focusing on the economic trends and investment opportunities in 2021. Also present at the program were Yudong Yang, Editor-in-chief of Yi Cai, Delong Yang, Chief Economist of First Seafront Fund, Yi Shen, Board Chairman of Shanghai Shenyi Investment Co., Ltd., Fengwei Bian, Research Director of Research Department of Guotai Junan Securities Shanghai Branch, Rong Hong, Director of Hong Gong Lue Investment Research Institute, and a number of other renowned economic and financial experts, scholars and representatives of market organizations.

What can be China’s driving force and engine for its economic development in 2021? According to Professor Qian, China achieved a stable economic revival in 2020 with an annual growth rate of 2.3%, creating favorable conditions for the international community to resist the epidemic and economic recession. However, this number is still lower than China’s long-term average growth rate of 5.5%. Based on the business cycle theory, in 2021 China’s economic growth will likely exceed its long-term average growth rate of 5.5%. Looking back upon 2020, China’s industrial chain and manufacturing industry made huge contributions to import and export trades and acquired remarkable results. This manifestation of China’s stable status of being an influential link in the global industrial chain. A solid industry chain will be the strongest stimulant for economic growth in 2021.

In the coming new era, Internet, big science and new energy has come to the forefront of the capital market one after another. What will be the next growingpoint in China’s capital market? How should investors conduct proper allocations among asset allocation? As Qian analyzes, there are three significant aspects in investing in 2021. First, considering monetary policies, with the COVID-19 epidemic still going on, western countries will continue monetary easing policies. Second,  considering the capital market, in the past, well-performing Chinese enterprises, especially Internet giants, preferred to go public in the US or in Hong Kong. But now with the launch of the STAR market as well as its registration system, more and more excellent enterprises have chosen to return to the domestic capital market. The STAR market will be one of the best target markets to seek high-quality stocks and worthy to be closely watched. Third, as for global asset allocation, it is recommended to pay attention to the bi-directional volatility of exchange rates and decentralized asset allocations, not putting all assets into one currency.

In 2020, the capitalt market showed a slow bull trend as a whole. As divergence has become the new normal of the capital market, it is not easy for every investor can make big money. As the traditional Chinese year of ox arrives, how could investors make money in the capital market? In the near future when it is an era of all-round registration system, how should investors adjust their investment concepts? Professor Jun Qian stresses that China’s capital market, long featuring individual investors, is moving towards “institutionalization”. Even the most extraordinary investor struggles to make decisions. Therefore, the simplest investment rule is to choose a relatively steady product by comparing mid-term and long-term return rates. Specifically, investors should investigate the return rates of at least three years. If the product is able to exceed the overall stock market throughout all the three years, then it is a good investment target. In the meantime, Qian gives a warning to investors that 2021 embraces both investment risks and opportunities. In the current diverse and divergent situation, investors should keep calm and think carefully. They need to learn to rationally construct investment strategies applicable for themselves from all aspects and multiple directions.