You Can'T Understand Chinese Bull Market.

The stock market has risen more than 40%, and has been on the long lost 3000.

It is undeniable that in the face of this round of market, some people think that this is only a big class rebound.

Obviously, in the current market environment, the real economy has not shown signs of improvement, and the cost of social financing remains high.

However, it is undeniable that, throughout the past twenty years of market trends, the most affected still can not be separated from two words, that is, policy.

The artificial bull market may be able to describe the current market.

At present, China's economic development is facing unprecedented difficulties.

On the one hand, China's economic pformation continues to deepen, but the high cost of financing is still outstanding. This has also brought some resistance to China's economic development. On the other hand, the marginal effect of China's investment in promoting economic growth is weakening, and the local reliance on the real estate market is also gradually decreasing.

Indeed, this will cause a direct impact on local debt repayment and even the growth of the economy.

In addition, due to the combined impact of factors such as the collapse of international crude oil prices, China's CPI growth has been running below 2% for many months.

According to the conventional analysis, CPI rose to a normal level between 2-3%, which is also conducive to the healthy development of the economy.

But when CPI rose for more than a month at 2% below or even below 1.5%, combined with the current economic fundamentals, it often meant deflation.

Deflation will have a great negative impact on the development of the economy.

In response, the government will adopt a number of stimulus policies to cope with deflation, so as to bring the economy back to normal level.

However, on the other hand, the analysis of bad economic fundamentals and the coming of deflation era often bring the expected room for growth to the stock market.

For the domestic stock market, large capital institutions are more interested in speculation.

While subdividing to specific stocks, large funds tend to screen varieties with potential to tap.

For those stocks that lack imagination, they will be treated for a long time.

Therefore, bad economic fundamentals tend to give market expectations of policy stimulus, and the stock market as a barometer of the economy will benefit from it, and it will rebound rapidly ahead of the economy.

As for the arrival of deflation era, it is easy to bring policy expectations to the market. For example, lowering interest rates and lowering relevant standards and coping tools are enough to create more room for speculation in the market.

In fact, over the past six months, the sharp improvement of China's stock market has been injected into the "international and political" color.

First, the situation in foreign countries is not clear, and neighboring Russia is subject to the sanctions imposed by the Western powers. China will be more or less affected.

The stock market, as an important place affecting hundreds of millions of Chinese people, is very important for the stability of the stock market.

Obviously, only under the premise of stability can we deal with crises at home and abroad flexibly.

Secondly, the internationalization of RMB is accelerating.

It is undoubtedly an important bargaining chip for China to accelerate the internationalization of RMB.

Among them, the "opening" of Shanghai and Hong Kong links has also created conditions for the A share to be incorporated into MSCI next year. It is undeniable that the stock market can go abroad and will directly promote the process of RMB internationalization.

Third, the artificial bull market is

Paving the way, and enhancing the direct financing function of the stock market will vigorously promote the process of economic pformation in China.

At present, it is the key time for the pition from the approval system to the registration system. Under the background of the high cost of social financing, the activation of direct financing channels such as stock market will create space for alleviating the financing difficulties of small and medium-sized enterprises.

However, in the weak market, the direct financing function of the stock market is difficult to carry out on a large scale.

And as the government pushes the bull market, the stock market can be activated, and its direct financing function will be further applied.

Facing the present

Only a small number of people can make money, while most people are on the sidelines or even full of positions.

What is more, the stock market simply does not understand, nor does it know where the future will go.

In this regard, the author Guo Shiliang believes that the current bull market in China is essentially a process of retail diversification, and directly boosts the overall influence of China's stock market in the international market.

Obviously, when most retail investors don't understand it, the stock market is still able to continue.

But when most retail investors are waking up and the number of people who understand them is increasing, it may be the stock market's initial stage.