new economy

　　

When communicating with domestic scholars and investors in the past one or two years, I can mostly feel that domestic investors are mostly optimistic about the U.S. economy, believing that the U.S. economy is recovering steadily and that high-tech enterprises and technological innovation are the core competitiveness that supports its growth; Most of Europe is not optimistic, not only because of the economic downturn after the European debt crisis, but also because of concerns about European political prospects, and the occurrence of the black swan incident of Brexit last year made European suspicion once again risen in the European Union. Realize this pessimism.

    However, although the U.S. economy continues to improve, it has been fully reflected by the market’s optimistic expectations, and even has an overestimation element. On the contrary, there are many bright spots in the European economy. As long as there is no black swan incident in the French election, the EU will not There is a possibility of recovery outside the UK beyond expectations.

    Indeed, the Eurozone’s economic growth rate in the first quarter of this year reached 2.3%, surpassing that of the United States; the manufacturing PMI index rose to 57.4 in June, a 74-month high; the unemployment rate fell to 9.3% in May, the lowest since March 2009 Level. In this context, the euro has appreciated by 10% against the dollar this year, and now it has reached 1.16. The European Central Bank is also discussing when to withdraw from the easing policy.

    From the perspective of member states, this recovery seems to be universal. The author visited 16 cities in Western Europe, more than 50 leading European multinational companies and some central banks. In the process of communicating with Spanish entrepreneurs and economists, they expressed that the Spanish economy is the most optimistic and is the new engine of European economic growth. Spain-This "European Five Pigs" country that was once on the edge of debt, through labor market reforms, now the economy has maintained rapid economic growth for four consecutive years. Last year's GDP reached 3.3%. This year, even the Bank of Spain economists predict that it will return to the second quarter. The expected growth rate of 4% is the best level since the crisis, and it must be surprising.

    In addition, the core country Germany is thriving, construction sites can be seen everywhere, and when communicating with local economists and entrepreneurs, most of them also predict that the German-French economy will reach the best level in six years in 2017.

    Affected by Brexit, more and more financial companies, such as Deutsche Bank, Standard Chartered, Nomura Securities, Goldman Sachs, Morgan Stanley and Citibank, have decided or considered moving their London-based operations to Frankfurt; in addition, Paris, France It is also actively working to win the financial center. For example, it has recently announced a series of measures to support financial development, including the cancellation of the highest level of payroll tax for banks and other companies that do not pay VAT, and the cancellation of plans to expand the scope of the stock transaction tax.

Political risks are drifting away

    Political risks are an important reason for domestic investors’ general pessimism towards Europe. The European debt crisis a few years ago highlighted the fundamental problems of the European Union’s monetary union and non-fiscal union. At that time, the overall debt ratio of the Eurozone was not high, or even lower. The United States and Japan, however, due to the three major contradictions in the Eurozone, namely, between the core countries, Germany and France, between the non-core countries, and even between the core countries and the non-core countries, there are conflicts of interest. Can the process of European integration continue? There are always voices of doubt in the market. Until last year's Brexit, European suspicion was unprecedentedly high on the European continent. For a time, the prediction that the road to European integration would eventually collapse was very popular.

    However, this year, the situation has improved significantly, and it can even be said to be a blessing in disguise. The European Union, especially Germany and France, are preparing for the departure of the United Kingdom, and are committed to strengthening the cohesion of core countries and promoting European integration. The European black swan incident that the market worried earlier has also been reversed. Since this spring, populist parties in the Netherlands, France and even Germany have encountered Waterloo one after another. In particular, the new French President Macron defeated Le Pen, who advocated against globalization and immigration. Frustrated the suspicious European camp. Now the German Merkel's approval rating has expanded to 40%, and it is extremely hopeful that she will win the German general election again in September this year. Since both Merkel and Macron are firm defenders of European integration, after the traditional "troublemaker" Brexit, the cohesion of the core countries of France and Germany will be further strengthened, which will help European integration return to the right track.

    The British side seems to be a little bit constrained. After the Brexit referendum, the pound fell sharply, the City of London’s business was hit, and the British economy was slowing down. In particular, household income and industrial performance were disappointing. For example, household disposable income fell for the third consecutive quarter in the first quarter. For the first time since the 1970s, manufacturing output fell 0.2% in May from the previous month, and industrial production fell 0.1%.

    On the political front, British Prime Minister Theresa May is also facing difficulties. Not only did she lose her majority party status, which made her vowed to achieve a complete victory, but she also had to spend a lot of money to rely on small parties to form a cabinet to stay in power. .

    In addition, a high-rise fire in London was unfavorable to deal with, and the successive terrorist attacks also caused the domestic popular support rate to continue to decline. In addition, the opposition in the party strongly questioned Teresa May's political leadership. It is not difficult to imagine that the Brexit negotiations without the support of the people and the party will inevitably be difficult to obtain a favorable position and negotiation advantage.

    The European economy is experiencing its best period in seven years, and the political black swan incident has not occurred. Instead, it is a blessing in disguise. Without the participation of the traditional "dissident" Britain, the road to integration may be further strengthened.

    From a global perspective, it seems that the anti-globalization forces that flourished last year have also suffered a serious setback. Trump's New Deal is blocked and the UK is overwhelmed after Brexit. All of these have provided warnings to more countries. At this G20 summit in Germany, it is not difficult to find that the Chinese leaders received warm hospitality at the summit, but there seems to be a gap in the originally close German-US relations. The countries that support globalization are closer, which will lay the foundation for the next Sino-European cooperation. Good foundation.