Source: Business School Magazine

Although China’s financial industry is confident to cope with the policy shock caused by the Bank of Japan’s turn, China’s financial institutions must take precautions, adhere to the principle of macro-prudence, and accelerate their business and digital transformation.

Text | Yan Jiajia Shi Dan

ID | BMR2004

The "boots" for the Bank of Japan to raise interest rates for half a year finally ended on March 19th this year. The Bank of Japan announced that it would raise the benchmark interest rate from -0.1% to 0~0.1%, and at the same time cancel the yield curve control (YCC) policy. Realized the first rate hike in Japan’s macro-monetary policy in 17 years, ending "Abenomics"Eight years of negative interest rates.

The world’s three major central banks (Federal Reserve, European Central Bank and Bank of Japan) have finally achieved nominal unification of interest rate policy direction (interest rate increase) after the US subprime mortgage crisis. At present, the world’s major economies, only China is in the stage of interest rate cuts. This also reminds China’s financial industry that it must be fully prepared and carefully handle the policy fluctuations of the three major central banks in the world, so as to maintain the prosperity and stability of China’s financial market, the internationalization of the RMB system and the stability of the RMB exchange rate.

So, what are the considerations for Japan to raise interest rates this time? What impact will Japan’s interest rate hike have? What is the future trend? How is it related to the upcoming shift of the Fed’s monetary policy? For China’s financial market, what should be the focus of Japanese interest rate hike?

01

Driving factors of Japan’s monetary policy shift

Japan’s low interest rate policy has been maintained for 25 years. As early as 1998, Japan’s interest rate fell to 0.25%, but it has not yet fallen to zero and negative interest rates.

"Japan’s long-term failure to raise interest rates can be traced back to 40 years ago. In the early 1980s, the bilateral trade friction between Japan and the United States continued to intensify, and the trade war gradually escalated into a currency war. The United States, Japan and other countries signed the famous Plaza Agreement, which triggered a sharp appreciation of the yen and accompanied by the rapid expansion of asset prices, which also led to the bursting of Japan’s bubble economy, which in turn triggered a sluggish domestic economy in Japan. At first, the Bank of Japan implemented a zero interest rate policy. By the end of 2012, Shinzo Abe came to power for the second time and began to implement the "Abenomics". Since then, the Bank of Japan has implemented a negative interest rate policy, which is known as the "different-dimensional" monetary policy. In other words, private banks in Japan have to deposit money with the Bank of Japan, not only without interest, but also with management fees. This is enough to show that the Japanese government and the Bank of Japan want to stimulate economic growth through active financial easing policies. " Dr. Dou Shaojie, a researcher at the Global HRM Research Center of Waseda University in Japan and a researcher at the SME Management Research Center of Tongshe University, told the reporter of Business School.

Chen Jia, an independent international strategy researcher and former researcher at the International Monetary Institute of Renmin University of China, said, "Before Shinzo Abe took office and began to focus on promoting the’ Abenomics’, Japan had been trapped in the’ lost decade’: the population was aging and the young people were flat; Weak investment in the real economy, low efficiency of enterprises and stall of scientific and technological innovation; Repeated shocks of the yen, rampant cross-border arbitrage, etc. Although previous Japanese prime ministers saw the problem, their targeted strategies were ineffective and were repeatedly bounced back by public opinion, which led to giving up halfway. Since Shinzo Abe took office, he has drastically implemented reform measures in the financial and social fields, especially the implementation of the’ Abenomics’ in macro-financial and monetary policies, aiming at vigorously stimulating Japan’s deep economic fundamentals. "

Gu Qinhua, a member of the North American Doctor of Laws Club, once worked in a Jewish international law firm as a cross-border transaction and investment consultant and lawyer, told the reporter of Business School that Japan has been in a low interest rate or even negative interest rate environment, with the aim of jumping out of the middle income trap. The government has adopted a monetary policy to continuously stimulate the economy, in which the negative interest rate policy is to make the funds not be deposited in the bank, but become idle funds. Not only Japan, Europe, the United States and other countries have also implemented negative interest rate policies, which is the performance of loose monetary policy to the extreme. Abe’s "Three arrows"(monetary easing, fiscal policy and growth strategy), through the way of" helicopter money ",that is, during the economic depression, through the maximum easing policy to stimulate the economy.

Since 1989, Japan has raised interest rates five times in a row in order to curb the rising real estate prices and economic inflation in Japan at that time. However, the consequence was that the "hot money" that poured into Japan was evacuated one after another, and the bubbles in Japan’s stock market and property market burst, and it was not recovered until the subprime mortgage crisis in the United States in 2007. From a macro perspective, after Japan’s economic bubble burst in the 1990s, it fell into a typical ".middle income trap"At the same time, the Great Depression appeared in political economy, and the phenomenon called deflation appeared in the development of national economy. As a result, Japan has made up its mind to solve the problems of economic depression, overcapacity and deflation that are easy to occur in the middle-income trap.

Gu Qinhua believes that there are three steps to solve the "middle income trap" globally. The first step is to let companies and individuals with overcapacity and debts jump out of the "trap" and enter a promising foreign market. If these enterprises toss in the "trap", they will only get deeper and deeper. The way for Japan to get rid of the trap of depression, deflation and middle income is to jump out of the Japanese market and play a role in other markets full of opportunities. Take Toyota Motor Corporation of Japan as an example, its overseas output is rising steadily, which is about twice the domestic production value. It is not difficult to understand that building a car overseas requires huge amounts of money, and Japan’s loose monetary policy can allow huge amounts of money to support Japanese companies to go to sea. Enterprises that make money can continue to feed back the country and pay off debts.

The second step is to clear the sludge caused by debt in the "trap". The third step is to spend huge sums of money to directionally polish and cultivate more promising and competitive new products and fields. Any one of these steps can not be separated from the stimulus and support of the government’s massive cheap funds. The nature of capital and capitalist is profit-seeking, and the cheap yen gave birth to the yen carry trade. This kind of transaction using spread arbitrage is not a major means for financial products to jump out of the "trap" and enter other markets to make money.

Judging from the actual use of cheap yen, the proportion of foreigners borrowing money in Japan and investing overseas in places with higher interest rates is relatively small. Most of the funds were used by the Japanese in three aspects: on the one hand, overseas expansion. Toyota and other auto companies go to sea and even invest in American technology companies and new markets (such as China); The second aspect is to invest in the largest foreign exchange market. For example, there is a powerful force in the foreign exchange market called "Mrs. Watanabe". In Japan, men earn money, and women do housework at home. Over time, women begin to take charge of financial power. This special group of people is a fresh force in the foreign exchange market, and they hold a lot of dollars and other currencies. Foreign exchange trading has given birth to Japan’s great progress in computer, quantitative trading software, High-Frequency Trading (HFT), communication, artificial intelligence and artificial intelligence industries. The third aspect is overseas investors. Mainly American investors and hedge funds, but also some European and Asian investors, such as the interest rate increase of the Japanese yen, will have an impact on the property market, stock market, foreign exchange market and bond market in China Mainland and Hongkong.

Japanese investment banks are the main force in the financing of China’s state-owned enterprises and private enterprises. For example, Softbank has invested in many high-tech enterprises in China. These investments come not only from project financing and equity financing, but also from the Japanese government, various financial institutions and investors. However, Softbank may have recovered its capital out of pressure (transferring its shares and replacing them with Japanese yen to pay its debts).

It is worth noting that Japan’s low interest rate policy of not raising interest rates for a long time came to an end because of two kinds of pressures.

The first pressure comes from inflation. Japan’s financial sector has achieved the rise of its balance sheet after years of "struggling for a living". Japan cleared its debts in the 1990s, and the economy began to brew new momentum. Japan’s inflation used to be imported inflation. Now wages and stock market are rising, and the inflation rate is also rising. Therefore, both the traditional financial school and the post-financial school believe that the monetary interest rate should be normalized. Otherwise, the Bank of Japan, the core management institution of the government, will fail in its important position of regulating the effective, orderly and organic development of the domestic economy through monetary policy.

The level of inflation tolerated by Japan’s domestic economy, like the United States and European countries, is basically set at around 2%. If the actual inflation rate in Japan far exceeds 2%, then wages, labor insurance and welfare for the elderly should be adjusted and increased according to the inflation rate. Once inflation goes up, the pressure on government spending will increase significantly. Coupled with the severe aging of Japan’s population, most of Japan’s fiscal expenditure is spent on the elderly, so the ideal state is no inflation and no need to increase expenditure. If there is inflation, we must adjust the welfare of the elderly. In the past, Japan did not raise interest rates because most of the previous inflation was external.Imported inflationIt is not caused by internal reasons, but now that internal inflation is rising, the central bank has to raise interest rates.

So is America. Since the beginning of 2022, the United States has experienced a high level of inflation, which is caused by global supply chain problems, rising energy prices and tight labor market caused by the COVID-19 epidemic. In this case, the Federal Reserve has taken measures to raise interest rates to curb inflation and maintain economic stability. The purpose of raising interest rates is to reduce aggregate demand by raising borrowing costs and reducing consumption expenditure and investment, thus curbing inflation. Even if the national debt of the United States has reached $35 trillion, the interest rate on the debt will be very heavy after the interest rate increase, but the Fed has to raise interest rates, because fighting inflation is the first task of the Fed.

The second pressure comes from the currency appreciation caused by the trade surplus. Due to the great progress of Japan’s manufacturing capacity, foreign trade products and services and the long-term trade surplus, it will certainly be intimidated by other countries’ demands for currency appreciation. Just like the background of the Plaza Accord, countries forced the yen to appreciate rapidly through the Plaza Accord, because at that time, the United States and European countries all had pressure on Japan’s trade deficit.

Without the pressure of domestic inflation and trade surplus, the Japanese government is willing to keep easing, which is a big move for it to jump out of the middle-income trap.

Dou Shaojie said that at that time, "Abenomics" wanted to achieve the recovery and development of the Japanese economy, and set several indicators, the most important of which was the price index, which rose by 2% every year. But in fact, despite the Japanese government’s efforts, this 2% target has not been achieved until the outbreak of the COVID-19 epidemic.

This move by the Bank of Japan actually confirmed two indexes. One is that the price index has risen by 2% for two consecutive years, and the second index is that the wage increase rate has reached 5%. However, among these two indexes, the first price index has indeed achieved a 2% increase for two consecutive years, but whether the second index has really been achieved remains to be discussed. Because the wage increase rate of large Japanese enterprises did achieve a 5.2% increase for the first time in the "Spring Fight" in March this year ("Spring Fight" is a national labor-management negotiation held in Japan every spring, which plays a guiding role in the annual wage increase in Japan), but the wage increase rate of small and medium-sized enterprises, which account for 99.7% of the enterprises, has just exceeded 4.5%. Another suspense is whether wage increase and price increase have really achieved a virtuous circle. Because although wages seem to have increased, compared with the price index, the increase rate is not enough, and the real wage growth rate remains at a negative growth level (-0.6%, January 2024), and it has been negative for 22 consecutive months. It can be seen that domestic consumption in Japan has not really developed.

In fact, Kazuo Ueda, the president of the Bank of Japan, resisted Abenomics from the very beginning, and he held different views on the Bank of Japan’s continuous loose monetary policy. When he took over from former president Kuroda in 2023, there were many voices speculating that "will he cancel the negative interest rate monetary policy as soon as he takes office?" From the adjustment effect on March 19th this year, it can be seen that the Bank of Japan’s interest rate hike did not cause a sharp drop in the stock market, nor did it cause a large fluctuation in the yen exchange rate. This is obviously the effect that the Bank of Japan "released the wind" in advance and was digested by the market.

Generally speaking, the reason why the Bank of Japan adjusted its monetary policy is that the Japanese economy has achieved a moderate recovery on the one hand, and wages have risen moderately on the other. The adjustment of monetary policy is to make the virtuous circle between wages and prices more stable. On January 23, 2024, the Outlook on Economic and Price Situation issued by the Bank of Japan pointed out that the growth rate of women and the elderly participating in labor slowed down, the supply and demand of labor was further tense, and the pressure of wage increase would increase.

From the perspective of the supply side, women and the elderly have participated in the labor market in the past 10 years or so. These labors have increased supply and demand, and as a result, wages have not risen. At present, the growth rate of women’s and the elderly’s participation in labor is slowing down, and their wages are facing upward pressure. Just like migrant workers in China go to cities, the hourly wages of inexhaustible migrant workers will be very low, and the wages will rise rapidly when there is a shortage of migrant workers. This will bring the pressure of rising labor costs in terms of cost, and at the same time help to increase the purchasing power of families. At present, the Japanese government believes that it can withdraw from the negative interest rate and YCC policy and realize a virtuous circle of wages and prices.

02

Global monetary and financial markets may fluctuate.

Chen Jia said that as we all know, the Bank of Japan’s monetary policy, especially interest rate decision, followed the Fed for a long time after World War II, which is the famous phenomenon of "three central banks strike one blow and three earthquakes" in the global monetary history that we have observed in the past 40 years, that is, as long as the Fed raises interest rates, the Bank of Japan and the European Central Bank always "resonate at the same frequency". However, over the past year or so, the Federal Reserve has taken the initiative to raise interest rates in order to control the ultra-high inflation in the United States. In the same period, among the three major central banks in the world, only the European Central Bank maintained the general direction of following the Fed’s monetary policy for its own purpose of suppressing high inflation. Limited by its stagflation and Abenomics orientation, the Bank of Japan "parted ways" with the Federal Reserve for the first time in decades.

Focusing on more than a year before the Bank of Japan raised interest rates, the United States and Europe raised interest rates and China and Japan cut interest rates, which are the fundamentals of global macro-money. Most global financial centers with the US dollar system as the main trading system generally have high market interest rates, which leads to the widening gap between the benchmark interest rates in the offshore and onshore markets of China financial markets, and the benchmark interest rate in the offshore RMB market is generally higher than that in the mainland.RMB benchmark interest rateLooking back, the recent difference between offshore RMB and onshore RMB in deposit interest rate has become increasingly prominent, which is essentially a realistic response to the huge gap between the major central banks in the world in the direction of monetary policy.

Less than a year after the tentative introduction of YCC deregulation, the Bank of Japan finally returned to raise interest rates in line with global market expectations. On the surface, the "post-Kuroda era" policy changed course and followed the Fed again, but in fact, the top design core of Japan’s monetary policy has never changed. Once the Federal Reserve cuts interest rates, the Bank of Japan, the Japanese yen and Japanese bonds are likely to become a major source of fluctuations in the global monetary and financial markets in the future.

From the analysis of market data, there have been frequent chaos in the global currency and financial markets recently; The prices of non-interest-bearing assets have rocketed, and gold has fluctuated at a high price; Encrypted assets such as Bitcoin have been dormant for three years and then soared to historical highs again. Behind all this is the decline in the yield of interest-bearing assets relative to non-interest-bearing assets caused by the uncertainty of global monetary policy.

Under the condition that the market is so turbulent, the Bank of Japan can only try its best to maintain the stability of bond operations and prevent the Japanese yen hot money in the global financial market from using the Bank of Japan’s policy steering again for policy arbitrage. This is not only the main reason why the Bank of Japan indicated that it would make long-term efforts to maintain the balance between the volume and price of its bond purchases after it turned to raising interest rates, but also the fundamental reason why the yen exchange rate in the global market fell instead of rising.

03

Choice of the pace of Japan’s interest rate hike in the future

Chen Jia said that neither the economic base nor the superstructure in Japan has the objective conditions to tighten monetary policy quickly in the short term. Excessive interest rate hikes only increase the feasibility of international financial market arbitrageurs to increase their holdings of yen-denominated assets in the short term, which has spawned a Japanese stock market bubble. From the analysis of the benchmark of the fundamental operation of the central bank, the necessary conditions for the Bank of Japan to really have the opportunity to enter the interest rate hike channel must be based on the camera choice in the macro-economy of Japan, the return of the yield curve to normal, the expected high core inflation rate, and the majority support of opinion polls for interest rate hikes.

Gu Qinhua said that due to geopolitical reasons, Japan’s interest rate hike may have an interaction with the US interest rate cut. When the US starts to cut interest rates, Japan will raise interest rates. When the United States is not healthy, Japan will add very little or even nothing. There is no need to guess the timing of the Fed’s interest rate cut. It must be one of the following two opportunities: the first is that the inflation rate has been below 3% for many times in a row. If it is below 3%, it is still possible to revive, and it is easy to jump above 5%. The second is the financial crisis, such as bank failures and mass unemployment. The mass unemployment is due to the high cost, the business owners can’t afford to hire too many people, and they don’t have the funds to expand reproduction, so there will be a large number of layoffs, which is a sign of economic downturn. Another sign is the debt crisis, bank failures and so on. After the above situation occurs, the Fed will definitely cut interest rates.

Gu Qinhua believes that the yen’s interest rate hike will put two conditions on the United States. The first is to lift the restrictions imposed by the United States on the increase of Japanese military spending after World War II, so that it can have the ability to protect its own achievements, not just the self-defense forces, but also its own army. In the meantime, the United States should strengthen its protection and transfer of armament technology. The second condition is not to interfere too much with Japan’s foreign trade surplus. Japan should organize a new Asian trade circle excluding China, and Japan’s trade volume should be weighted and averaged throughout the new trade circle. The United States cannot count the trade volume generated by Japanese enterprises established in the United States, which mainly recruit American employees, as Japan’s total foreign trade with the United States.

Every central bank’s interest rate hike is a process of returning capital. For example, money placed in American banks has a 5% interest rate, while Japan only has a zero interest rate or even a negative interest rate. If you deposit a certain amount of money, you have to pay management fees. Everyone will definitely want to deposit money in American banks, plus the Japanese yen and the US dollar can be freely exchanged without restrictions.

The reason for currency depreciation is that it is thrown a lot. Like stocks, if someone throws it, it will fall. Therefore, the depreciation of the yen is also due to the government’s issuance of additional currency, which continues to stimulate the economy. Because the yen arbitrage transactions are frequent, for example, the "Mrs. Watanabe" group does foreign exchange transactions, people can’t let the yen stay in the process of trading forever, and it needs to be landed. It is definitely the best to land in US dollars, and the US dollar is deposited in the bank with interest. As soon as the Bank of Japan raises interest rates, the cost of borrowing will increase, and the money will naturally flow back to Japan to repay the principal and interest and feed back the suzerain country.

Dou Shaojie believes that this move of the Bank of Japan can be said to be "the first step of the Long March", that is, from the abnormal state of "different dimensions" to the normal state, but what will happen afterwards, considering the interests of all parties, especially the reality of the Japanese government, it is estimated that the Bank of Japan will not take too radical measures.

After all, the Bank of Japan has been buying Japanese government bonds through YCC for a long time. By the end of 2023, the Bank of Japan held about 53.7% of Japanese government bonds, so the biggest creditor of the Japanese government is the Bank of Japan. If you borrow money, you have to pay it back, and you need to pay interest. In 2023, the debt interest that the Japanese government needs to pay is 8.5 trillion yen, accounting for about 1.4% of Japan’s annual GDP. If the Bank of Japan continues to raise interest rates at this time, the interest expenses that the Japanese government needs to bear will increase. The Japanese government, whose finances are already tight, is even more difficult, and may even raise the consumption tax again. Therefore, the Bank of Japan will also take a very cautious attitude towards the increase of interest rates. However, it is also very difficult for the central bank. If interest rates are not raised properly, from the perspective of foreign investors, Japanese interest rates will not be raised, and the yen may depreciate further.

04

Warning and Response to China

In Gu Qinhua’s view, monetary policy has two sides, both favorable and unfavorable, and every country is trying to avoid disadvantages as much as possible.

For example, one of the benefits of cutting interest rates is that it can reduce the burden on investors and the deficits of local governments, enterprises and ordinary people, but it will also be accompanied by concerns about the outflow of money, because money is as pervasive as water and difficult to stop.

For another example, lowering the deposit reserve ratio has both advantages and disadvantages. The advantage is to release liquidity and reduce it by 0.5 percentage point, which may create the effect of 1 trillion cash. Because banks have more money, they can support more repeated loans. However, the first disadvantage is that it creates an illusion of abundant funds and rising deposit interest rates. Although it seems to improve liquidity on the surface, it makes the amount of social financing and the deposits of ordinary people rise. In fact, the money is just idling inside the bank. When idling, there will be a problem. Assets that do not create assets are liabilities. This is also a very important point in monetary finance: no matter how big or abundant an asset is, it is defined as a liability if it cannot bring benefits.

The second disadvantage of interest rate cuts is that there are many "thunderbolts" now. The deposit reserve was originally one of the important tools for the central bank to cope with the "thunderbolts" of banks. When banks fail to meet their debts, they are used to subsidize depositors. However, if the deposit reserve ratio is low, the scope of protection will be reduced. In addition, it will also make depositors worry. For example, once a large real estate company goes bankrupt, depositors of the bank with the most loans will calculate the risks and may transfer their deposits to other banks, which is also a kind of idling of funds.

The third disadvantage of interest rate reduction is that it falsely creates an increase in social financing and deposits, making it difficult for decision makers to accurately determine the market capital situation.

It is difficult to explain whether banks should raise interest rates or cut interest rates in this complex market situation. Any policy has its internal and external causes, advantages and disadvantages, and needs to be judged and selected. In Gu Qinhua’s view, foreign investors should be gathered at this time, and interest rates should not be cut sharply. Some targeted subsidies can be taken to stabilize foreign funds.

In addition, we should learn from the successful strategies of Japan, South Korea, the United States and other countries to get out of the middle-income trap and seek development in overseas markets with real opportunities. Because the middle-income trap is a hurdle that all economies have to pass in the development process. When the economy develops, people tend to expand, get into debt, artificially push up assets and create some bubbles. These bubbles are not transferred by human will, and eventually there will be a low tide "trap".

Chen Jia said that since the exchange rate reform in 2015, China’s financial system has been optimizing the governance structure of the macro-prudential supervision system, especially in the governance of cross-border financial arbitrage. Although China’s financial industry is confident to cope with the policy shock caused by the Bank of Japan’s turn, China’s financial institutions must take precautions, adhere to the principle of macro-prudence, and accelerate their business and digital transformation. Taking the Bank of Japan as a mirror, it is the advanced realm of macro-prudential supervision system to do all the concrete work to prevent and resolve systemic risks and eliminate major risks invisibly.

Source | Business School Magazine, May 2024

On April 13th, 2025, the 5th China International Consumer Goods Expo (hereinafter referred to as Consumer Expo) was held in Hainan International Convention and Exhibition Center. period, CITIC think tank released the report "Eight Trends of China’s Consumption in 2025".

Jiang Ya, an expert of CITIC think tank and chief analyst of consumer industry of CITIC Securities Research Institute, and Yu Xiang, chief analyst of policy research, combined with macro-economy, policy orientation and technological changes, interpreted the consumption trend of China market around the supply and demand ends of consumer industry.

Trend 1:

Return to rationality, quality upgrading and consumption equalization go hand in hand

At present, consumer spending is rational, and in the long run, the internal upgrading trend of consumption will not change. Consumers pay more attention to "cost performance" in clothing and household items. This phenomenon is similar to the trend of clothing de-branding and beer degradation during the period of pressure on foreign consumption power. However, consumers are not limited to balancing the price when measuring the cost performance, but also pay attention to the additional added value brought by the products, such as mood and health. This trend shows that the pursuit of high-quality life by different groups of consumers is the common underlying logic. Under the same design and quality, more consumers choose domestic brands with obvious price advantages.

Trend 2:

Happy life, spiritual appeal drives experience consumption.

After the per capita GDP of developed countries exceeded 10,000 US dollars, the proportion of service consumption increased significantly, and the transformation of residents from material satisfaction consumption to high-end consumption, improved consumption and personalized consumption accelerated. China is also experiencing this transformation. About 260 million generation Z (born in 1995-2009), as the core promoters, have the characteristics of self-satisfaction and strong consumption power, and their consumption power is improving. At the same time, after 70 years of retirement age, compared with the previous generation of silver-haired people, their consumption concept is stronger and their emotional demands are richer. We expect that the consumption of fragrance, jewelry, beauty cosmetics, luxury goods, IP goods at the commodity end, and spiritual satisfaction such as leisure, entertainment and health care at the service end will show a clear upward trend.

Trend 3:

Consumption is new, and technology iteration promotes new directions.

Digital economy and biotechnology are giving birth to a new direction of consumption and challenging the traditional consumption pattern. Digital economy is the key word in China government’s policies to stimulate consumption, which will push technologies such as artificial intelligence, virtual reality, augmented reality and metauniverse into the consumption scene. In the field of biotechnology, the application of synthetic biology in agriculture, food and beauty cosmetics deserves attention.

Trend 4:

The cycle is open, and China’s consumption is at the right time

Following the traditional advantageous industries such as home appliances, automobiles and consumer electronics, the Internet and local consumer brand enterprises have also entered the stage of seeking increment at sea. In addition to the export-oriented industries, "water sellers" who provide supporting services for overseas enterprises, such as cross-border platforms, logistics, payment, marketing and exhibition services, will be the first to benefit. At the destination, Europe and America are still the main markets, but emerging markets such as the Middle East and Southeast Asia are emerging.

Trend 5:

Trade-in the old for the new, strengthen the expansion, improve quality and increase efficiency

In 2025, the trade-in policy will be more effective. In terms of funds, the amount of subsidy funds this year is 300 billion yuan, a substantial increase over last year; In terms of strength, the amount of subsidies for new energy buses and power batteries has increased from 60,000 yuan to 80,000 yuan, which is also significantly higher than last year; In terms of scope, three types of digital products, such as mobile phones, tablets and smart watch bracelets, have been added. It is estimated that in 2025, the amount of 300 billion yuan of old-for-new subsidies will incite 630 billion yuan of incremental sales, driving the total retail sales of consumer goods to increase by 1.3 percentage points.

Trend 6:

Increase income and reduce burdens, and improve residents’ spending power.

The policy layer pays more attention to the improvement of residents’ consumption power and promotes residents’ income increase and burden reduction. In the short term, measures such as raising the minimum wage standard, residents’ pension standard and the salary of financial support personnel are expected to be introduced. In the medium and long term, improving residents’ income should not only improve the wage growth mechanism of workers, but also further cultivate and expand more high value-added industries.

Trend 7:

Maternity allowance was extended from the pilot to the whole country.

In 2025, the National People’s Congress and the National People’s Congress clearly put forward the idea of "formulating fertility promotion policies and granting childcare subsidies". It is expected that the maternity subsidy policies in various places will gradually shift from pilot to full-scale, and at the same time accelerate the construction of all-round "fertility support" policy system covering the fields of nursing care, nursery services and educational support. In March, Hohhot released the detailed rules of local maternity allowance, in which the maximum single-child allowance can reach 100,000 yuan, which is significantly higher than the current pilot policy. Extrapolating the whole country according to the subsidy standard of Hohhot, it is estimated that the financial expenditure of maternity subsidy will be 287 billion yuan by 2030, accounting for only 0.2% of GDP, which is still far from other countries.

Trend 8:

Stock market, property market and asset price attach importance to upgrading.

Stabilizing the stock market and the property market was first written into the government work report in 2025. Real estate accounts for about 60% of China residents’ asset structure, which plays an important role in residents’ balance sheet. It is estimated that for every 1% increase in housing prices in China, household consumption will increase by 0.09%; For every 1% increase in share price, household consumption will increase by 0.02%. Subsequent house prices and stock prices have gradually stabilized under a package of policies, further promoting the stabilization of household consumption.

CITIC Think Tank is researched by subsidiaries of CITIC Financial Holdings Convergence Group, and is committed to building a platform for wisdom sharing and actual combat links, and creating a "practical" think tank.

■ The content of this article comes from CITIC Group, and its copyright belongs to the original author;If there is any infringement or the original author requests our company to stop using the content, please contact us to delete it.

Zhou Jinxi participated in the contest. Photo courtesy of the Mobile Detachment of Hainan Armed Police Corps

Photo courtesy of Zhou Jinqian’s mobile detachment of Hainan Armed Police Corps during school.

The honor won by Zhou Jinxi. Photo courtesy of the Mobile Detachment of Hainan Armed Police Corps

Zhou Jinxi’s pistol accuracy shooting results. Photo courtesy of the Mobile Detachment of Hainan Armed Police Corps

　　During the Spring Festival, the city’s public security organs, in accordance with the unified arrangements of the municipal party committee, the municipal government and the public security organs at higher levels, adhered to the standard of "foolproof, foolproof" and the style of "meticulous and exquisite", fully implemented the first-level response mechanism of high-level service and security, mobilized all the police, made every effort to implement all work measures strictly and conscientiously, successfully completed all security tasks during the Spring Festival holiday, and created a harmonious and stable social environment for the broad masses of people to celebrate the Spring Festival. During the festival, the overall situation of social security in the city continued to be safe and stable, and the public order in tourist attractions and crowded places was good, and no major influential incidents occurred, and the road traffic was orderly.

　　The Municipal Party Committee and the Municipal Government attached great importance to the security work during the Spring Festival. Mayor Shi Zhijun, Standing Committee Member of the Municipal Party Committee and Secretary of the Political and Legal Committee Zhou Qing, Vice Mayor and Public Security Director Zhao Lihong went deep into the grass-roots units and duty stations to visit the frontline police and auxiliary police and encourage them to stick to their posts and perform their duties. Before and during the festival, the Municipal Public Security Bureau held video conferences five times to judge the hidden risks, strengthen the work deployment and promote the implementation of measures. The city’s public security organs strictly implement the system of dual-class leadership and 24-hour duty. The members of the Party Committee of the Municipal Public Security Bureau are responsible for the division of labor, and they are responsible for their duties. They go deep into the grassroots front-line supervision, compact their responsibilities, and pay close attention to implementation. Leading cadres at all levels have the courage to take the lead, and all police officers are on duty, faithfully performing their duties and fighting day and night. With the responsibility of "the masses are on holiday and the police are on guard", they are trying their best to protect the lights and protect Huai’ an.

　　The city’s public security organs carry out high-level patrol service, investing more than 4,200 patrol police officers and more than 440 vehicles every day, deploying 210 government police officers to support the grassroots front line, and coordinating more than 20 armed police officers to strengthen social patrol control; Around the tourist attractions, bustling business districts, "two stops and one field" and other key parts, 46 military patrol car groups will be deployed to be on duty at any time to deal with emergencies; Adhere to the integration of mobile, standby and patrol, give full play to the advantages of 18 police workstations in policing the street, carry out patrol and police handling, emergency handling and comprehensive services, effectively improve the rate of seeing police and handling affairs, and enhance deterrence and control. We will comprehensively strengthen the analysis of cases that are prone to occur frequently during the holiday season, severely crack down on all kinds of illegal and criminal acts, carry out in-depth centralized rectification of public security, and fully protect people’s lives and property.

　　During the Spring Festival, the city’s public security organs continued to strengthen public safety supervision, comprehensively strengthened the safety supervision of rented houses, dangerous goods, logistics delivery and other industries, set up 18 inspection teams, dispatched more than 1,700 people, and inspected 1,135 units, rectifying 339 potential risks; Actively cooperate with relevant departments to strictly investigate the illegal production, storage, transportation and sale of fireworks and firecrackers, increase the patrol of flammable fireworks, strengthen the publicity and guidance of the prohibition of burning and releasing, dispatch more than 7,800 police officers, post more than 172,000 copies of the Notice of Prohibition, hang more than 8,200 banners of Prohibition, and publicize more than 80,000 households; Strictly implement large-scale mass activities and safety management measures in scenic spots. Eight large-scale activities, such as "2023 New Year’s Eve Street" in Zhongzhou Island, Qingjiangpu, and burning incense and praying for blessings on the first day of Ciyun Temple, were held safely and smoothly. The number of tourists in scenic spots such as Westward Journey Paradise and Fangte Paradise reached 516,000, and the scene was orderly, happy and peaceful.

　　We will do our best to do a good job in traffic security during the Spring Festival holiday, pay close attention to the two peaks of leaving the city and returning, carefully formulate and dynamically adjust the traffic security plan, and dynamically invest more than 1,200 police officers every day, focusing on expressways, main trunk roads and scenic roads, and focusing on "two passengers and one dangerous side". We will comprehensively strengthen inspection and control, node guidance, and make every effort to ensure safety and smoothness. During the period, more than 7,300 vehicles with "two passengers and one danger" were inspected, and more than 2,600 illegal acts were investigated. The roads around domestic expressways, trunk highways and scenic business districts were safe and smooth, and there was no long-distance traffic congestion and no major traffic accidents.

　　The government service windows of public security organs in the city adhere to the needs of enterprises and the masses, and send three "holiday gift packages": offline window delay service, online service of network center and mobile service of convenience through train, and provide convenience for enterprises’ production, transportation and people’s travel life with the service measures of "not closing on holidays". The public security offline service window provides delayed service from January 25th to 27th (the fourth day to the sixth day), and provides emergency service for the rest of the time. The public security network office center is online for 7×24 hours, and the convenience service through train stops at Golden Eagle Shopping Center in Qingjiangpu District, RT Mart in Nanchang Road in Economic Development Zone and Wuyue Square in Ecological Cultural Tourism Zone from January 22nd to 27th (the first day to the sixth day), handling a total of 1,610 businesses. At the same time, Spring Festival travel rush Love Station was set up in duty stations and service areas of expressway toll stations to carry out service activities for the people and provide more than 2,700 people with convenient services such as directions, drinking water and first-aid medicines.

Source: Huai ‘an Police