Macro Data for Q1 2021 Expected to Exceed Expectations: CITIC Securities Report

According to reports, the latest research report from CITIC Securities pointed out that the upcoming macro data for the first quarter is expected to exceed expectations as a whole, and the market’s expectations for fundamentals are constantly being revised. It is expected that the Political Bureau meeting in April will carry out targeted policy hikes in some weak areas of the economy. The economy is moving from a partial recovery to a comprehensive recovery, and there will be no deflation. The improvement of the external geopolitical environment and clear liquidity inflection points will enhance market risk appetite, The A-share market is currently in the second key long window of the year, and the importance of the current financial reporting season performance has significantly increased. The main rotation has begun. It is recommended to continue to avoid pure AI themed speculation and return to the main performance line, cutting high and low between industry sectors and within the digital economy.

CITIC Securities: The economy will not experience deflation

Over the past year, the world has witnessed an unprecedented economic downturn caused by the COVID-19 pandemic. However, as vaccine rollouts continue and economies begin to reopen, the focus has now shifted to the speed and strength of the global economic recovery. In this article, we will examine the latest research report from CITIC Securities, which highlights the potential outlook for China’s economy in Q1 2021 and beyond.

The Current State of China’s Economy

The pandemic has undoubtedly taken a toll on China’s economy, and the country’s GDP growth rate fell to a record low of 6.8% in the first quarter of 2020. However, despite this setback, China has swiftly rebounded, with GDP growth rates of 3.2% and 4.9% in the second and third quarters respectively. The country’s robust recovery has been attributed to several factors, including a swift response by the government, successful containment measures, and massive stimulus packages.

CITIC Securities’ Latest Report

According to the latest research report from CITIC Securities, the upcoming macro data for Q1 2021 is expected to exceed expectations as a whole, and the market’s expectations for fundamentals are constantly being revised. CITIC Securities analysts suggest that China’s economy is now moving from a partial recovery to a comprehensive recovery stage. This shift is being driven by the steady improvement of domestic and external factors, such as a later than usual Spring Festival holiday, a low base last year, and strong export growth.

Targeted Policy Hikes in Weak Areas

The report also highlights the fact that the Political Bureau meeting in April will carry out targeted policy hikes in some weak areas of the economy. This policy is aimed at providing a boost to sectors that are struggling to recover, including small enterprises and industries hit hardest by the pandemic. This targeted stimulus is likely to play a significant role in boosting the country’s overall economic recovery.

No Deflation Expected

The report also adds that deflation is not a concern at present. This is due to the fact that the economic recovery from the pandemic is being supported by fiscal and monetary policies that are focused on boosting domestic demand. Additionally, the pent-up demand caused by the pandemic-related restrictions is expected to provide a significant boost to the overall economy.

Improved Geopolitical Environment

The report also suggests that the improvement of the external geopolitical environment and clear liquidity inflection points will enhance market risk appetite. This is likely to result in increased investments, driving the overall economic growth of the country.

Financial Reporting Season

The A-share market is currently in the second key long window of the year. Therefore, the importance of the current financial reporting season performance has significantly increased. The main rotation has already begun. As a result, it is recommended to continue to avoid pure AI-themed speculation and return to the main performance line, cutting high and low between industry sectors and within the digital economy.

Conclusion

In conclusion, the CITIC Securities report is very upbeat about the prospects for China’s economy in Q1 2021 and beyond. The report suggests that the current macro data indicates steady growth, and the country is moving to a comprehensive recovery. Additionally, targeted policy hikes, an improved geopolitical environment, and stronger risk appetite are all likely to boost the economic growth of the country.

FAQs

Q1. What is the biggest driver of the Chinese economy’s recovery from the pandemic-induced downturn?
A1. The Chinese government’s swift response, successful containment measures, and massive stimulus packages are the biggest drivers of the country’s economic recovery.
Q2. What are the weak areas of China’s economy that require targeted policy hikes in April?
A2. Small enterprises and industries hardest hit by the pandemic are the main areas that require targeted policy hikes.
Q3. What should investors be cautious about during the current financial reporting season?
A3. It is recommended to avoid pure AI-themed speculation and return to the main performance line, cutting high and low between industry sectors and within the digital economy.