On August 15, 2019, Yuntai team held an internal discussion regarding China’s macroeconomic condition since last year and brought up a series of investment strategies to tackle the situation.

The theme of the discussion is risks and opportunities.

Team members had a brainstorming discussion about China’s current economic development statu-quo and the macroeconomic environment internally and externally. To summarize, the major mid-to-long term factors affecting China’s current economic growth include the following:

1.      Population structure: low fertility rate, aging trend, the dying of demographic dividend, and the increasing education gap between the urban and rural areas.

2.      Industry structure: over reliance on the property sector; the unproportionate development of the real and virtual economy, which gives too much emphasis on the virtual economy than the other way around.

3.      Economic structure: an under-mature market mechanism, the uneven development of the state and private sectors, and the loss of efficiency in the distribution of economic resources

4.      R&D: China still lags behind the developed countries in terms of R&D capabilities. Its creativity in inventing new business models and advanced technologies also needs improvement.

5.      The uneven development in regional economies: there is still a quite large gap in the economic development of the eastern and western regions of China. And the wealth gap is evident among different regions of China.

6.      Ecological environment: China’s ecological environment is fragile, and the environmental security problem hampers its sustainable growth.

At present, our country is faced with a difficult macroeconomic environment: there is unfavorable trade situation externally and is urgent demand of economic structure optimization internally. Under such circumstances, China’s real economy is not going well these days and the downward pressure is increasing in the foreseeable future.

Yuntai team focused on the discussion of the short-term factors affecting market expectation and investment environment, such as Sino-US trade fractions and HK issues. Meanwhile, Yuntai team made several assumptions regarding how such issues will develop in the future and influence China’s market. For instance, one of the assumptions are that Sino-US trade war will turn out to be a comprehensive one and affect Chinese market and citizens in all respects in the long run.

Based on the above analysis, Yuntai team revised the current strategies and thoroughly put forward a short-to-mid term investment strategies after hot debate and discussion. In the future, Yuntai team will carefully select a series of potential investment industry for deep study, so as to be well-prepared for potential gains and risks. At the same time, more risk regulatory measures will be in place for regular investment projects, and a smart and flexible post-investment management and exit arrangements will also be adopted.