"Three Key Words Set the Tone for China's Economy; Analysis of the Post-Pandemic Era in Two Seminars

Three Key Words Set the Tone for China's Economy; Analysis of the Post-Pandemic Era in Two Seminars

- Successful Conduction of the 2020 North America Mingde Forum by the Renmin University North America Alumni Association

"Mingde" means setting a moral example and embracing diverse perspectives. From December 11th to 12th, in Eastern Standard Time, the Chinese People's University North America Alumni Association held a successful online seminar, the "North America Mingde Forum" as part of its brand activities. Vice President Liu Yuanchun represented the alma mater in congratulating the successful convening of the forum and delivered a keynote speech on the outlook for China's economy in the post-pandemic era.

The "North America Mingde Forum" is an open and international platform established by the North America Alumni Association, balancing both academic and practical aspects. It was launched in October 2015 in New York and officially named in November 2016. The 2020 annual meeting marked the sixth consecutive year and was the first attempt to hold it in the form of an online seminar during the special period of the COVID-19 pandemic. It broke the constraints of offline forums and greatly expanded the regional coverage of participating alumni, achieving ideal results.

The theme of this year's annual meeting was "Economic Outlook and Venture Opportunities in the Post-Pandemic Era." Four senior executives from the financial investment industry, including Li Shanquan, a 1978 alumnus and Senior Portfolio Manager at Invesco, Zhu Ning, an 1989 alumnus and Managing Director of MacKay Shields, Ji Mo, a 1995 alumnus and Chief Economist for Greater China at AllianceBernstein, and Cen Ming, a 1997 alumnus and Investment Strategy Director at Vassalou Capital Management, conducted in-depth analyses of the global economic prospects and asset allocation in the post-pandemic era. Discussions on entrepreneurial investment were enriched and lively with the participation of Li Deshun, President of Benimax Investment Group and a 1978 alumnus, Wu Gang, Chairman of DoubleBridge Group and a Peking University alumnus, Hu Bo, Associate Professor at the School of Finance and Finance at Renmin University of China and a 1994 alumnus, Liu Quan, Chairman of Beijing Guolian Video Information Technology Co., Ltd. and a 1994 alumnus, and Liao Junxia, Managing Partner of Yixin Private Equity Fund and a 1995 alumnus.

Wu Yafeng, President of the North America Alumni Association, and Liu Jing, Executive Vice Chairman, respectively moderated the two discussions. Yue Jingsheng, Chairman of the North America Alumni Association, delivered the opening speech.

Three Key Terms for China's Economy in 2021

In his keynote speech, Vice President Liu Yuanchun stated that three key terms need to be understood for the outlook of China's economy next year.

The first key term is "recovery." It is highly probable that China's economy will enter a process of normalized recovery next year, assuming that the COVID-19 situation can be further well-controlled. Liu mentioned that economic acceleration in the fourth quarter has already been observed, and the internal driving forces for the first and second quarters of next year have emerged. Simultaneously, due to the presence of the second wave of the pandemic externally, the strength of external demand is better than anticipated.

Moreover, policy factors play a significant role. By continuously implementing the policies of "six guarantees" and "six stabilizations," the scale of policy withdrawal next year may be smaller than expected, ensuring the overall economic recovery in the first half of next year. "Looking at the growth rate next year, we expect it to be around 8.1%," said Liu Yuanchun.

He said that although there will be some uncertainty regarding the overall global economic recovery and the relationship between China and the United States next year, the reversal of the global economy will still have a significant impact on China's external demand support. He mentioned that once the pandemic is over, countries will reconfigure their industrial and supply chains, leading to a new wave of deglobalization. China's new development pattern, which focuses on domestic circulation, is important for hedging against this trend.

Regarding the China-US trade conflict, he stated, "This story may be much better for China's resilience than what people overseas perceive." He expressed a cautious optimism regarding the impact of future China-US relations on the Chinese economy, emphasizing that China has clear strategic layouts in various aspects.

The second keyword is the "exit" of unconventional policies. He mentioned that many extraordinary measures were taken this year to deal with the pandemic, and they had their role during the special period. However, the long-term use of these policies will inevitably bring a series of aftereffects. Therefore, in 2021, as the economy continues to recover, the discussion revolves around policy exit.

"It is important to note that policies will not be completely withdrawn. The core lies in transitioning from extraordinary expansionary policies to normalized expansionary policies," Liu Yuanchun stated. "In other words, the strategic orientation of many aspects, such as expanding domestic demand, will not change, but there will be significant changes in some tools and means."

The third keyword is the "implementation" of new strategies. Next year is the first year of implementing the "14th Five-Year Plan," and the core of the entire strategy is the new development pattern. This new development pattern has several important strategic pillars, including technological self-reliance and strength, the upgrading of industrial foundations, and the modernization of industrial chains. "Another important strategic point is the expansion of domestic demand," he mentioned. Compared to previous short-term expansions, the new round of expanding domestic demand will have significant differences in terms of method combinations. "At the institutional, mechanism, macro-policy, industrial policy, regional policy, and employment policy levels, a combination system will be formed."

"The story of the domestic circulation as the mainstay will be a protagonist in our future for some time," Liu Yuanchun said.

Liu Yuanchun also emphasized that next year will still face many uncertainties, including those stemming from pandemic control, the global economic recovery, the progression of the China-US conflict, as well as frictions and the pace of undertaking in China's economic strategy transformation.

2021 “Think Positively”

The four guests who participated in the first group discussion were all senior professionals in the financial investment industry. They expressed their views on the overall global outlook, particularly on the economic and market prospects of China and the United States. Liu Yuanchun's optimistic attitude towards the Chinese economy received support from the other participants.

Ji Mo, Chief Economist of Lombard Odier in Greater China, stated in the group discussion that China was "first in, first out" in handling the COVID-19 pandemic, leading the global economic recovery. She also mentioned that China's progress in developing COVID-19 vaccines has been smooth, and it should be able to achieve nationwide immunization faster than other countries, which "means that China's economy will still maintain its leading position in terms of recovery in 2021." She said that this would provide support for Chinese assets, and it is expected that investments in Chinese stocks, bonds, and currency would yield "very promising" returns.

"China plays a role model in the global context now," said Cen Ming, Head of Investment Strategy at Vassalou Capital Management.

Zhu Ning, Managing Director of MacKay Shields, believed that from the perspective of China-US relations, the Biden administration may still engage in strategic competition with China, but many of their approaches may be more positive and proactive. Therefore, to some extent, the risk premium of Chinese assets may be reduced. He stated, "We should consider Chinese and US assets from a positive perspective. Investors should focus on the future and think positively."

Li Shanquan, Senior Portfolio Manager at Invesco, expressed that while other countries struggle to control the pandemic and many places are still under lockdown, it is premature to talk about growth. In contrast, China has been minimally affected and he has a positive outlook on China. He said, "Compared to others, I have always been optimistic about China. The reason is very basic: China has the highest quality labor force in the world." He further added, "If this trend continues, emphasizing education, investment, and humanistic cultivation, China will definitely excel."

Regarding the policies and economic prospects of the United States, Zhu Ning stated that if the Republicans continue to control the Senate with a narrow advantage, it may be difficult for the Biden administration to execute key projects in its economic policies. Although it may not affect the current economic recovery significantly, this divided government will certainly bring more downside risks. As a result, the future monetary policy of the Federal Reserve may continue to be accommodative, and further balance sheet expansion seems inevitable. Future financial policies will continue to cooperate with the government.

Ji Mo also believed that, including the United States, the fiscal stimulus space is limited, and China's fiscal stimulus next year will be smaller than this year, which will impact the overall GDP. "When the space for fiscal stimulus is limited, the only effective support for asset prices in 2021 will be through monetary stimulus," said Ji Mo.

However, there are hidden concerns behind the stimulus. Li Shanquan, who has been engaged in investment management on Wall Street for nearly 30 years, said, "With such a large stimulus, if everything goes smoothly without any problems and achieves the expected effects, the rebound of the economy will be very strong." He emphasized, "However, it's important to remember the 'however.' With such a large stimulus, if there are any loopholes or if the expected effects are not achieved, it will be a disaster."

In the discussion on "Post-Pandemic Venture Capital Opportunities," three entrepreneurs, Dawson Lee, Wu Gang, and Liu Quan, shared their entrepreneurial experiences and insights with alumni. According to them, the key factors in the entrepreneurial process are a spirit of focus, an attitude of respect, and a mindset of learning.

"In the process of entrepreneurship, you will encounter various difficulties. You must persevere, as Chairman Mao said, 'Be determined, fear no sacrifice,'" said Dawson Lee, President of Benimax. "You must persist to the end. Many entrepreneurs have the trait of not fearing hardship and persisting to the end."

Wu Gang, Chairman of DoubleBridge, also emphasized the importance of "focus" and other factors. He said, "If you want to do something, do it well and to the extreme. This is the most important thing."

Wu Gang also emphasized the importance of respect for the market, objective laws, partners, investors, and customers. He said, "If you truly respect them from the bottom of your heart, consider them as your partners, and solve the problems you encounter together, you will find solutions to all problems."

Liu Quan, Chairman of Guolian Corporation, values learning greatly. He mentioned that he has read Zhang Lei's book, "Value," three times. He said, "In the process of entrepreneurship, continuous learning and progress are very important. The learning process is an important part that accompanies us throughout our enterprise. In the process of growth, constantly absorbing the essence of others is a driving force for personal and corporate growth."

Hu Bo and Liao Junxia provided valuable advice to alumni who are planning to start their own businesses from the perspectives of industry researchers and professional investors, supported by extensive data and case studies.

Hu Bo, Associate Professor at the School of Finance and Economics, introduced the innovation and entrepreneurship support policies in China from the central to local levels. He summarized the national policies supporting innovation and entrepreneurship as investing early, investing in small projects, investing in technology, and investing for the long term. If alumni consider returning to China for entrepreneurship, they can plan their entrepreneurial projects based on these points. For example, returning earlier, doing projects related to technology or the application and commercialization of scientific achievements might lead to better investment opportunities.

Liao Junxia, Managing Partner of Yirentong Private Equity Fund, who has been involved in venture capital work, provided detailed insights into early-stage financing in China's private equity market, including industry classifications, educational backgrounds of entrepreneurs, entrepreneurial models, locations, sources of funding, and challenges. She provided three suggestions to alumni: choose the right industry and entry point, select the right entrepreneurial partners (including management teams and capital partners), and choose the right entrepreneurial location, considering social resources and industrial chains.

She particularly reminded alumni to carefully consider whether they should go "All In" in entrepreneurship. She said, "In this process, you need to have a more rational judgment of your industry leadership capability."

The "North America Mingde Forum" is a forum platform established by the North America Alumni Association of Renmin University of China, which balances openness and internationality, as well as academic and practical aspects. It has been successfully held for six sessions and has won widespread praise from alumni and various sectors of society.

With the successful conclusion of the "North America Mingde Forum 2020," alumni provided positive feedback and expressed their desire for the alumni association to regularly organize similar forums, salons, and lectures. They believe that through mutual learning and discussions, alumni can broaden their horizons and strengthen their bonds.

The alumni association will seriously consider the alumni's enthusiastic demand. In 2021, the alumni association will fully leverage the convenience of online platforms and organize more alumni activities. Specific plans are under discussion, and initial progress is expected in the near future.

Please stay tuned for further updates!

About "RUC NAAA"

The Renmin University of China North America Alumni Association (RUCNAAA) is a non-profit organization based on alumni relations. It was initiated and established in 2014, officially registered in June 2015, and obtained 501(c)(3) tax-exempt status from the U.S. Internal Revenue Service in March 2018. The headquarters is located in New York City, and its member network extends to major cities in the United States and Canada. The mission of RUCNAAA is to create a communication platform for alumni to connect with each other, share resources, and provide more opportunities and channels for mutual benefit and career development for alumni around the world. In 2018, RUCNAAA was recognized as an "Outstanding Alumni Organization" by its alma mater, Renmin University of China.

In December 2018, former U.S. President Jimmy Carter sent a special letter to RUCNAAA, stating, "It is hard to imagine that a Chinese elite university like Renmin University could have such an active and strong alumni organization in the United States. Through your alumni association, it is evident how much progress China has made and what achievements can be accomplished through investing in education."

RUCNAAA warmly welcomes the support of alumni and friendly organizations for the Renmin University of China North America Alumni Association.