分类： sangna

Core view

In the second quarter, the three conditions of interest rate reduction may have marginal changes, which in turn will push interest rates down. (1) According to the market expectation, the Federal Reserve may start to cut interest rates in June, and the domestic wide monetary space may be gradually opened. (2) At present, domestic real estate investment and sales are still in a deep adjustment range. In the first quarter, the financial strength was less than expected, the issuance of special bonds was slow, the growth rate of infrastructure may be restricted, and the weak economic fundamentals may need further care from the broad currency. (3) From a medium-and long-term perspective, in the process of resolving local debt risks, for the needs of steady growth and reducing the cost of bond swap, or the cooperation of the central bank with a wide currency, and the real estate cycle has not yet reached an equilibrium level, the wide currency is still needed for support. Under the combination of "wide currency+weak fundamentals", interest rates may usher in new catalysis.

abstract

Since the first quarter, the interest rate of 10-year treasury bonds has continued to consolidate after falling to around 2.3%.It is difficult for the interest rate to exceed 2.3% in the short term, mainly because of the following two reasons: 1) The interest rate of 1)10Y national debt has implied the expectation of 20BP interest rate reduction, but at present, under the restriction of exchange rate, the probability of short-term interest rate reduction in China is low; 2) On the economic fundamentals, most macro data in January and February were better than expected, and the bond market was adjusted back due to the recovery of sentiment in the equity market and the seesaw effect of stock and debt. If the subsequent interest rate is to go down further, it may need the guidance of MLF to cut interest rates. What are the conditions for the next rate cut? We answer this question from overseas, domestic and medium-and long-term perspectives.

Condition 1: the exchange rate restricts interest rates and waits for the Fed to cut interest rates.

The exchange rate and interest rate have once again reached their respective low levels, and the supervision faces a dilemma, or it may need to wait for the Fed to cut interest rates.There are two main reasons for the recent depreciation of the RMB exchange rate: 1) In 2024, the resilience of the US economy is still strong, which is manifested in the stubbornness of inflation and the resilience of employment, and the Fed’s interest rate cut is expected to be delayed. Judging from the bitmap of the interest rate meeting in March and the expectations of the futures market, the Fed may cut interest rates at least three times in 2024 and start to cut interest rates as early as June. 2) In addition, in the early period, the Bank of Japan’s monetary policy turned, and the exchange rate of the yen was favorable, and the yen depreciated. As the second largest weight in the basket of currencies of the US dollar index, the yen led to the appreciation of the US dollar and the passive depreciation of the RMB.

Condition 2: The economy still has hidden worries, and it still needs wide monetary care.

1-2Most macro indicators in June were better than expected, but the performance of high-frequency indicators such as real estate and infrastructure was still weaker than the same period of last year, which needed the care of a wide currency.In January and February, most macro indicators such as CPI, industrial added value, investment in fixed assets, export and consumption were better than expected, but credit indicators such as social financing were lower than expected, and high-frequency indicators in real estate, infrastructure and other fields were still weaker than the same period of last year. Specifically, 1) although real estate investment converged to -9% in January and February, other related indicators of real estate (such as newly started area and sales area) are still in the double-digit decline range; 2) The growth rate of infrastructure investment in January and February was at a high level of 9%, but the rate of construction site resumption after the holiday was weaker than that in the same period of last year. The issue of special bonds and the net financing of urban investment bonds in the first quarter were not optimistic, and the growth rate of subsequent infrastructure may slow down.

Condition 3 of interest rate reduction: to solve the two major risks, it is also necessary to cooperate with a wide currency.

Looking back at history, risk resolution needs substantial support from liquidity.For example, during the period of 2015-2018, in order to cope with local hidden debts and high inventory of real estate, China issued a total of about 12 trillion replacement bonds, 2.65 trillion new special bonds, and 3 trillion net PSL, with a total scale of nearly 18 trillion, which is about 26% of GDP in 2015. At the same time, the one-year LPR quotation was reduced by 120BP.

Risk 1: In the process of localized debt, infrastructure investment may be under pressure, and the pressure of debt service will rise, which requires the cooperation of a wide currency.Under the current background of localized debt, the expansion of local debt, especially implicit debt financing, may be restricted. From the perspective of capital correlation, local implicit debt has the greatest impact on the growth rate of infrastructure. In 2024, infrastructure investment may be under pressure, and from the perspective of steady growth, it still needs the support of a wide currency. In addition, from the perspective of interest payment pressure, the balance of government debt is expected to increase by 13% in 2024, while the growth rate of generalized fiscal revenue and expenditure in 2024 is only 2.5% and 7.9%. In the case of no obvious decline in interest payment cost, the pressure of government interest payment may rise further. From the perspective of reducing the pressure of government debt repayment, it is necessary to cooperate with a wide currency.

Risk 2: the downward pressure on real estate is still great, and it needs wide currency support.Judging from the scale of real estate investment, the scale of China’s real estate investment in 2023 decreased by nearly 25% compared with the high point in 2021, while Japanese real estate investment peaked in 1996, with the highest cumulative decline of 54%. From the perspective of housing price, the price index of new houses and second-hand houses in 70 cities in China has fallen by about 5% and 10% respectively compared with the high point in 2021, while the average residential land price index in Japan has fallen by 47% compared with the high point. Judging from the level of residents’ leverage ratio, China’s residents’ leverage ratio is still consolidating, while Japan’s residents’ leverage ratio started rapid deleveraging in 1999, with the maximum leverage ratio of 12.6pct. To sum up, at present, the downside risk of China’s real estate is still large, which requires the support of a wide currency.

The following is the text

Since the first quarter, the interest rate of 10-year treasury bonds has been rapidly falling to around 2.3%, and it has continued to consolidate in the near future.It is difficult for the interest rate to exceed 2.3% in the short term. We believe that there are two main reasons: (1) Compared with the one-year MLF interest rate of 2.5%, the interest rate of 10-year government bonds has implied the expectation of interest rate reduction of 20BP. However, under the restriction of exchange rate, the Federal Reserve will not budge, so the probability of short-term interest rate reduction in China is low, and it may be difficult for interest rates to fall sharply again; (2) On the economic fundamentals, the macro data in January and February were disclosed one after another, among which the export, CPI, investment in fixed assets, industrial added value and other indicators were all better than expected, and the bond market rebounded due to the recovery of sentiment in the equity market and the seesaw effect of stock and debt. If the subsequent interest rate is to go down further, it may need the guidance of MLF to cut interest rates.

What are the conditions for the next rate cut? We answer this question from overseas, domestic and medium-and long-term perspectives.

Exchange rate and interest rate once again came to their respective low levels.Since the "811" exchange rate reform in 2015, the stages when the exchange rate and interest rate are at their respective relatively low levels are mainly from the end of 2016 to the beginning of 2017 and the beginning of 2020. The follow-up trend of the two stages is the upward trend of interest rate and the appreciation of exchange rate. The essential reason behind this is the improvement of economic fundamentals. However, at present, the domestic economy is still in a weak recovery stage, and the expectation of the Federal Reserve’s interest rate cut is delayed, so the supervision faces a dilemma between exchange rate and interest rate.

Is the American economy "soft landing" or "reflation"? When will the interest rate cut come?

The market had expected that the Federal Reserve would start to cut interest rates in the first quarter of 2024. In this regard, the US bond interest rate was expected to cut interest rates in advance and fell sharply in the fourth quarter of 2023; However, the recent expectations of the Federal Reserve to cut interest rates have been frustrated, and the interest rate of US bonds has also rebounded. The reason behind this is that the US economy is still resilient, which is manifested in the stubbornness of inflation and the resilience of employment.

From more perspectives: 1) American inventory cycle is at the bottom, and some industries such as retail and wholesale show signs of replenishment; 2) From the perspective of industry prosperity, both manufacturing and non-manufacturing PMI are at the bottom, and the consumer confidence index is obviously picking up. As the economy continues to exceed expectations and inflation is sticky, the market’s expectations for the US economy have shifted from a soft landing to re-inflation.

Cut interest rates at least three times in 2024, and cut interest rates as early as June. Judging from the bitmap of the interest rate meeting in March, the Federal Reserve expects to cut interest rates three times (25 BP each time) in 2024; Judging from the expectation of CME futures market, the market expects the Fed to cut interest rates as early as June. As the Federal Reserve starts to cut interest rates, the pressure of RMB exchange rate depreciation will be reduced, and the domestic wide monetary space will also be opened.

In addition, the shift of the Bank of Japan’s monetary policy in the previous period led to the depreciation of the yen and the appreciation of the US dollar, which is also one of the reasons for the recent depreciation of the RMB exchange rate. On March 19th, the Bank of Japan announced the adjustment of the monetary policy framework, decided to raise the short-term policy interest rate from -0.1% to 0-0.1%, and cancelled the yield curve control policy (YCC), and will guide the short-term interest rate as the main policy tool in the future. The yen’s exchange rate trading was full of benefits and depreciated rapidly after the monetary policy turned. As the second largest weight in the basket of currencies of the US dollar index, the depreciation of the Japanese yen makes the US dollar appreciate and the RMB passively depreciate.

1-2Most domestic macro indicators were better than expected in June.Judging from the data of the opening year, most macro indicators in January and February were better than expected, such as CPI of 0.7% (expected 0.4%), cumulative industrial added value of 7% (expected 4.3%), cumulative investment in fixed assets of 4.2% (expected 3%), cumulative social zero of 5.5% (expected 5.4%) and export (denominated in US dollars). However, credit indicators such as social financing were lower than expected. For example, in February, social financing increased by 1.5 trillion yuan (expected 2.4 trillion yuan) and the stock of social financing increased by 9% year-on-year (expected 9.1%).

However, some macro indicators deviate from micro high-frequency indicators, especially in the fields of real estate and infrastructure.From the perspective of high-frequency indicators, high-frequency indicators such as rebar output, cement delivery rate, cumulative transaction area of residential land in 100 cities and cumulative transaction area of commercial housing in 30 cities are still lower than the same period in 2023.

Specifically:

oneAlthough real estate investment converged to -9% in January and February, other related indicators of real estate are still in the double-digit decline range.In January and February, the newly started, constructed and completed housing areas were -31%, -11% and -21% respectively compared with the same period of last year. The national commercial housing sales area and sales volume were -25% and -32% respectively, and the real estate investment end and sales end were still in deep adjustment.

2From January to February, the growth rate of infrastructure investment (including electricity) was at a high level of 9%. However, judging from the situation of project resumption, the rate of post-holiday construction site resumption was weaker than that of the same period last year.According to the survey and statistics of Centennial Construction Network, as of March 12th, the rate of starting and returning to work and the rate of working on labor services in national construction sites were 75.4% and 72.4% respectively, which were 10.7pct and 11.5pct； lower than that in the same period of the lunar calendar in 2023. From January to February, the investment amount of the project also dropped by more than 40% compared with the same period of last year.

In addition, from the perspective of project funds, the current high growth rate of infrastructure may mainly come from the support of the trillion-dollar issuance of government bonds in 2023, but the situation of funds in the first quarter, especially special bonds and urban investment bonds, is not optimistic.

Credit funds increased slightly:In January-February 2024, the medium-and long-term loans of newly-added enterprises were 4.6 trillion yuan, 10 billion less than that of the same period of last year. If the proportion of medium-and long-term loans invested in infrastructure in January-February 2023 and January-February 2024 is estimated by using the proportion of medium-and long-term loans invested in infrastructure in Q1 2023 and 36% in the whole year of 2023 respectively, it is estimated that 167 billion yuan will be invested in infrastructure in January-February.

The issuance of new special bonds is slow:From January to March, 2024, a total of 634.2 billion new special bonds were issued, 722.6 billion less than the same period of last year, and the issuance progress was slow. Among them, the proportion invested in infrastructure (excluding infrastructure construction of municipal and industrial parks) is about 35%, which is slightly higher than the proportion invested in infrastructure in Q1 2023 (about 34%). The scale of special debt invested in infrastructure in January-March was about 237.9 billion less than that in the same period of last year, with a year-on-year growth rate of about -52%.

The net financing of urban investment bonds has been reduced:From January to March, the net financing of urban investment bonds was only 166.1 billion, a year-on-year decrease of 481.6 billion, with a year-on-year growth rate of -74%.

Generally speaking, the performance of domestic real estate is still weak, and infrastructure investment may also weaken under the background of localized debt. M1, the price level continues to run at a low level, and it still needs the active care of the wide currency to promote its low level recovery.

Looking back at history, risk resolution needs substantial support from liquidity.

During 1998-2004, faced with the impact of the Asian financial crisis and the high non-performing loan ratio in the banking industry, fiscal policy, on the one hand, issued a total of 210 billion treasury bonds for three consecutive years to expand government investment, on the other hand, issued 270 billion special treasury bonds to replenish bank capital. The total scale of the two debts accounted for 5.6% of GDP in 1998, and at the same time, monetary policy was greatly relaxed, and the one-year loan interest rate was reduced by 306BP.

During 2015-2018, the regulatory authorities actively solved the problem of hidden debts of local governments by "opening the front door and blocking the back door", and issued a total of about 12 trillion replacement debts, which made the local hidden debts explicit and gave local governments the right to issue bonds. During the period, they issued a total of 2.65 trillion new special debts. In addition, the regulatory authorities also realized the goal of real estate destocking through the monetization of shed reform, with a cumulative net investment of about 3 trillion PSL funds. The total scale of these funds is as high as nearly 18 trillion, which is about 26% of GDP in 2015. At the same time, monetary policy has remained loose during this period, and the one-year LPR quotation rate has been reduced by 120BP.

In 2023-2024, in the face of local debt risks and the downturn of the real estate cycle, it is estimated that 7.7 trillion yuan of new local special bonds will be issued, 1.5 trillion yuan of special refinancing bonds will be issued, 1 trillion yuan of additional government bonds will be issued, and 1 trillion yuan of special government bonds will be issued, and the accumulated PSL funds will be about 0.25 trillion yuan, totaling over 11 trillion yuan, which is about 9% of GDP in 2023. Since 2023, the one-year LPR quotation rate has been reduced by 20BP.

2024In 2006, we continued to face two major risks: local debt and real estate downturn. In the process of resolving the two major risks, we also need the cooperation of wide currency.

Risk 1: The local government debt pressure may still rise, which should not be underestimated.Compared with 2022, in 2023, the debt ratio of all provinces rose to varying degrees, among which the debt ratio of 12 high-risk areas was generally high and rose rapidly. In 2023, only the debt ratio of Beijing, Shanxi, Jiangsu, Shanghai and Xizang was within the warning line of 120%. In 2024, the scale of local special debt will still increase, but the pressure of local fiscal revenue is still there, and the debt pressure may continue to climb, and localized debt has a long way to go.

Risk 1: Under the background of debt conversion, infrastructure investment may be under pressure.Judging from the document "Measures for Strengthening the Management of Government Investment Projects by Classification in Key Provinces (Trial)" issued by the General Office of the State Council, the key debt-oriented provinces will strictly control the new government investment projects and strictly clean up and standardize the government investment projects under construction before the local debt risk drops to a medium or low level. Judging from the investment plan of major projects, the investment amount of key projects in 2024 in Inner Mongolia, Guangxi, Guizhou, Ningxia and other key debt-paying provinces and cities decreased significantly compared with that in 2023.

Risk 1: Infrastructure investment may be under pressure, and stable growth requires a wide currency.Under the current background of localized debt, the expansion of local debt, especially the financing of implicit debt, may be restricted, and from the perspective of capital correlation, local implicit debt has the greatest impact on the growth rate of infrastructure. At present, the proportion of hidden debts and infrastructure in 12 provinces is about 19% and 26%. In 2024, if the growth rates of hidden debt and infrastructure in 12 provinces are -5% and -5% respectively, and the growth rates of hidden debt and infrastructure in non-12 provinces are 8% and 10% respectively, the corresponding annual growth rates of hidden debt and infrastructure are 5.7% and 6.1% respectively.

Risk 1: the pressure of interest payment is rising, and wide finance also needs the cooperation of wide currency.In addition, from the pressure of interest payment, the interest payment expenditure of government bonds reached 1.9 trillion in 2023, accounting for 6.7% and 5.1% of the general fiscal revenue and expenditure, up by 0.4 and 0.3pct； year-on-year; In 2024, the balance of government debt is expected to increase by 13%, while the growth rate of generalized fiscal revenue and expenditure in 2024 is only 2.5% and 7.9%. Under the condition that the cost of interest payment has not decreased significantly, the pressure of government interest payment may further rise. Judging from the rhythm of bond issuance, the issuance of government bonds will start in May or will enter a peak period; Judging from the maturity of bonds, it is estimated that about 10 trillion government bonds will mature in 2024, which means that if the interest payment cost of new bonds after bond swap is reduced by 1BP, the interest payment will be saved by 10 billion. From the point of view of reducing the pressure of government debt repayment and reducing the cost of bond swap, wide finance needs the cooperation of wide currency.

Risk 2: Is the downside risk of real estate over? From the perspective of quantity.

From the perspective of housing demand,According to the calculation of Oriental Jincheng, the sales area corresponding to the demand for new housing in cities and towns in 2021-2025 is about 718 million square meters. Suppose that the center of China’s real estate sales area is about 1 billion square meters. Although the sales area of China’s real estate is close to the center level at this stage, the sales area of real estate above the center in the past decade or so has overdrawn some of the housing demand in subsequent years, and this part of the real estate bubble may take a long time to clear up.

Judging from the scale of real estate investment,In 2023, the scale of China’s real estate investment was about 11 trillion yuan, which was nearly 25% lower than the high point in 2021. Judging from Japan’s experience, Japan’s real estate investment peaked in 1996, and now it is stable at about 18 trillion yen, with a cumulative decline of nearly 40% from a higher point and a maximum cumulative decline of 54%.

Risk 2: Is the downside risk of real estate over? From the perspective of price.

From that perspective of house price,According to the data of Zhongyuan Real Estate, by the end of 2023, the prices of second-hand houses in Beijing, Shanghai, Guangzhou and Shenzhen had dropped by 17%, 19%, 18% and 31% respectively. The price index of new and second-hand houses in 70 cities disclosed by the Bureau of Statistics peaked in August 2021, and by February 2024, it had dropped by about 5% and 10% respectively. From the experience of Japan, the average residential land price index in Japan reached a high point in 1991, and then declined all the way. In 2023, the average residential land price index has fallen by 47% from a high point.

Residents’ income confidence is weak, and the expected decline in house prices accounts for a relatively high proportion.In addition, according to the results of the central bank’s questionnaire survey, in the fourth quarter of 2023, only 12.6% of residents thought that their income had "increased", down 1.2 percentage points from the previous quarter, and the residents’ confidence index for future income further fell to 47%; From the perspective of house price expectation, only 12% residents expect house prices to rise, while 20.2% residents expect house prices to continue to fall.

Risk 2: the downward pressure on real estate is still great, and it needs wide currency support.

Japan’s untimely policy response is one of the reasons why it has been lost for 20 years.The Economic White Paper issued by the Planning Department of Japan in 1992 holds that "the economic slowdown that began at the end of 1990 was mainly due to the influence of preventive monetary tightening and self-adjustment in the process of maintaining economic balance"; It was not until 1993 that the Japanese government realized that this economic downturn was different from the previous economic recession cycle. Japan’s discount rate changed from tight to loose in July 1991 and began to cut interest rates. In September 1993, the discount rate fell to 1.75%, which was lower than the lowest interest rate before the bubble burst, but it did not stop the downward trend of the real estate cycle. However, Japan’s land policy, which was tightened in the early stage, was not abolished until 1998. However, at this time, the impact of the bursting of the asset bubble on the behavior of residents and enterprises has been difficult to easily reverse, and the Japanese economy has fallen into a lost twenty years.

Judging from the leverage ratio of residents,The leverage ratio of Chinese residents has been consolidating at around 62% since it reached a high point in 2020; From the experience of Japan, after the bursting of the Japanese real estate bubble in 1990, the leverage ratio of Japanese residents was consolidating for a period of time. In 1999, it started rapid deleveraging and bottomed out in 2007, with a deleveraging rate of 12.6pct.

Generally speaking, the downside risk of China’s real estate industry may not be over yet, and it still needs the support of a wide currency.

In the second quarter, the above three factors may have marginal changes, thus pushing down interest rates.(1) From the market expectation, the Federal Reserve may start to cut interest rates in June, and the domestic RRR cut space may be gradually opened. (2) At present, domestic real estate investment and sales are still in a deep adjustment range. In the first quarter, the financial strength was less than expected, the issuance of special bonds was slow, the growth rate of infrastructure may be restricted, and the weak economic fundamentals may need further care from the broad currency. (3) From a medium-and long-term perspective, in the process of resolving local debt risks, for the needs of steady growth and reducing the cost of bond swap, or the cooperation of the central bank with a wide currency, and the real estate cycle has not yet reached an equilibrium level, the wide currency is still needed for support. Under the combination of "wide currency+weak fundamentals", interest rates may usher in new catalysis.

Authors: changjiang securities Yu Bo, Song Xiaoxiao, Jiang Jiazhen.,Source:Yu Bo’s Macro NotesOriginal title: "What are the conditions for the next interest rate cut? 》

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In order to prevent and reduce road traffic accidents in the jurisdiction, recently, the Traffic Management Brigade of Hepu County Public Security Bureau joined forces with township governments, police stations in the jurisdiction, transportation and other departments to carry out traffic order rectification actions for motorcycles and electric bicycles, focusing on investigating and dealing with traffic violations such as drunk driving, license-related, overload and overcrowding, fake license plates, failure to wear safety helmets, and overdue annual inspection. At the same time, it implemented "zero tolerance" for illegal personnel in driving without a license, investigated and detained them together, and driving without a license. Since October 20th, the Traffic Management Brigade has investigated and dealt with a total of 1,438 traffic violations on the spot, including 34 cases without a license and 2 cases of drunk driving. A total of 25 people were administratively detained, including 4 cases of drunk driving again and 21 cases of driving without a license, effectively eliminating road safety hazards and creating a good road traffic environment.

Exposure of traffic violations

What are the penalties for "second drunk driving"?

According to Article 91 of the Road Traffic Safety Law, anyone who drives a motor vehicle after drinking alcohol shall be temporarily detained for six months and fined more than 2,000 yuan in 1000 yuan.Those who are punished for driving a motor vehicle after drinking and driving a motor vehicle after drinking again shall be detained for not more than 10 days, fined not less than 2,000 yuan in 1000 yuan, and their motor vehicle driving licenses shall be revoked.

01

At 0 o’clock on October 19, 2022, the police of the traffic control brigade were on duty at the intersection of Dongjiaochang Road and Yan ‘an Road in Lianzhou Town, Hepu County. Zeng’s moped driving Gui EE89** was stopped on the spot by the traffic police on duty. After testing it with an alcohol tester, its breath alcohol content was45mg/100mlIt belongs to driving a motor vehicle after drinking. After investigation, it was found that Zeng was punished for driving a motor vehicle after drinking alcohol in April 2021.Driving a motor vehicle after drinking again. In the end, the police on duty will punish the driver for driving a motor vehicle for drinking again.Administrative detention for five days, fine of 1000 yuan, and revocation of motor vehicle driving license.Administrative punishment.

02

At 20: 57 on September 15, 2022, the police of the Traffic Management Brigade was on duty at 200m from Shangyang to Shagang Road in Xingdaohu Town, Hepu County. Yang was stopped by the traffic police on duty while driving Gui E856** motorcycle. After being tested by an alcohol tester, his breath alcohol content was20mg/100mlIt belongs to driving a motor vehicle after drinking. On the same day, after system inquiry, Yang was punished for driving a motor vehicle after drinking alcohol on December 10, 2019. He was punished for driving a motor vehicle after drinking alcohol. This time,Driving a motor vehicle after drinking again. In the end, the police on duty will punish the driver for driving a motor vehicle for drinking again.Administrative detention for five days, fine of 1000 yuan, and revocation of motor vehicle driving license.Administrative punishment.

Being able to drive does not mean being qualified to drive! !

"driving without a license" personnel either did not obtain a driver’s license, or revoked their driver’s license after being punished for traffic violations. These people drive on the road, subjectively lack respect for traffic safety laws and regulations, ignore traffic safety, and there are many traffic safety hazards, which can easily lead to traffic accidents.

According to Article 19 of the Road Traffic Safety Law: "To drive a motor vehicle, a motor vehicle driver’s license shall be obtained according to law." The traffic administrative department of the public security organ will, in accordance with Article 99 of the Road Traffic Safety Law,A fine of not less than 2,000 yuan in 200 yuan may be imposed, and a detention of not more than 15 days may be imposed.. At the same time, according to Article 99 of the Road Traffic Safety Law,If a motor vehicle is driven by a person who has not obtained a motor vehicle driver’s license or whose motor vehicle driver’s license has been revoked or temporarily detained, the traffic administrative department of the public security organ shall impose a fine of more than 2,000 yuan on 200 yuan and may concurrently revoke the motor vehicle driver’s license.

03

At 8: 50 on October 21st, 2022, Ning Mou (male, 22 years old, from Taiping Town, ling shan) drove Gui E208** moped to 240km+200m of S207 Provincial Road in Changle Town, Hepu County, and implemented it.Driving a motorcycle without a motor vehicle driver’s licenseThe illegal act was seized by the police on the spot. After being summoned for questioning, Ning confessed to the illegal behavior of his motor vehicle in driving without a license. On October 21, the traffic control brigade made it according to law.Administrative detention for five days and a fine of 300 yuan.Administrative punishment.

04

At 10: 49 on October 20, 2022, Zhongmou drove the Gui E270** ordinary two-wheeled motorcycle to the intersection of Jiefang Road and Dinghai North Road in Hepu County, and implemented it.Driving a motorcycle without a motor vehicle driver’s licenseThe illegal act was seized by the police on the spot. After being summoned for questioning, Zhong confessed to the illegal behavior of his motor vehicle in driving without a license. On October 20, the traffic control brigade made it according to law.Administrative detention for five days and a fine of 300 yuan.Administrative punishment.

Source: Traffic Management Brigade of Hepu County Public Security Bureau

sequence726period ｜ 2022/01/20

"This is our slogan, reading lights up life." Fan Deng said, pointing to the words printed on his T-shirt.

Fan Deng’s own life was actually lit up by reading.

Recalling the period when graduate students just graduated into CCTV, Fan Deng was very confused at that time, and his work pressure was great, his ability was not recognized, and his enthusiasm was nowhere to be displayed. "What if the program was shot again? What if I can’t afford the rent? " Fan Deng’s anxiety and insomnia are weighed down by realistic difficulties.

Rereading The Analects saved Fan Deng. He found that all the pains of contemporary people can be answered from this classic. As a student, the master of science and engineering who firmly believed that "learning mathematics and physics well and traveling all over the world are not afraid" suddenly found the key to solving the pain of life. It turns out that ending exam-oriented education and taking up jobs is not the end of learning, but the beginning of lifelong learning.

Fan Deng Image source: Every reporter Zhang Jianshe

Later, whether it was parenting, starting a business or managing a company, Fan Deng felt that reading helped him avoid detours. He teaches leadership in EMBA class and earnestly "Amway" good books to students, but few people actually read them. Then tell the book to everyone, and those who are willing to listen will pay to join the group. As a result, he found this model very popular, which is the embryonic form of "reading in Fan Deng".

2022 is the ninth year of Fan Deng’s study. The number of APP users evolved from the book club has exceeded 50 million, and it is stable and profitable.

And Fan Deng, who is lit up by reading, can light up the readers by telling books?Learning and seeking knowledge undoubtedly benefit people a lot. Can you really make people learn and change by spending 365 yuan to buy a member to listen to a book for one year?

Fan Deng won the "Knowler of the Year" trophy.

Image source: Every reporter Zhang Jianshe

At the end of the year and the beginning of the year, Fan Deng came to the release site of "New Weekly’s annual cutting-edge list" to win the trophy of "Know the Molecules of the Year". After receiving the award, Fan Deng accepted an exclusive interview with a reporter from national business daily (hereinafter referred to as NBD).

Read books to others.

I knew it was a business model from the beginning.

In 1995, Fan Deng, a junior majoring in materials science at Xi ‘an Jiaotong University, attended a summer camp, during which a Hong Kong senior asked him, "Have you read The Analects?" Fan Deng said, "No, I’m afraid I can’t read it?" The senior recommended him to read The Analects of Confucius.

The Analects of Confucius does not talk about "learning from time to time" at the beginning, but "the origin of the world is light with two arms, so why bother to connect with the city in the world" (who would exchange losing his arms in order to get the world? The fame and fortune in the world, why do people take it so seriously? ）。 This book helped Fan Deng knock on the door of The Analects. Who would have thought that the Analects of Confucius later became a lamp to illuminate Fan Deng in the dark. He was born in science and engineering and worked as a CCTV host, and found his real enthusiasm and business opportunities in the lecture.

Reading lights up life, which is slogan who studies in Fan Deng.

Image source: Weibo, Fan Deng

NBD: As a person who loves reading, how did you first come up with the form of telling books?

Fan Deng:It is anxious to see others not reading. My own habit is to look for books to read when I encounter any problems. If I can’t host the program, I will read the books that host the program. Read books with children without taking them; Read leadership books without taking the team. "Studying in Fan Deng" is my first time to start a business. If I can’t start a business, I’ll read a business book.A question, after reading more than a dozen books, can basically be understood. I rely on reading for parenting, making money and management, and reading has benefited me the most.

Later, when I was a teacher in a university, I taught EMBA classes and found that the books recommended to students only bought and didn’t read. I will share the books I have read with them as PPT, but they don’t even read PPT, so I will start a WeChat group and talk about 50 books a year. The annual fee for joining the group is to press the voice button for 60 seconds and 60 seconds.

NBD: What node can it be found to be a business model?

Fan Deng:From the beginning, I knew it was a business model, because it was completely in line with the structure of an enterprise, and the services it provided could help people solve problems. Its marginal cost of communication was very low, and there was a repurchase rate. The CEO of our company is an EMBA student in the first batch of WeChat reading groups.

NBD: You studied materials science in college, management science for graduate students, movies for doctors, debating competitions, being a host, being a university teacher, and now you are starting a business. It seems that every choice has not failed in the secular sense, and you are also very confident. Are these brought to you by reading? Or because of what?

Fan Deng:These are all after-the-fact interpretations, and they can also be understood as failures. You said that I had a smooth trip, which was just your projection, not the fact. The fact is that it doesn’t matter whether it is smooth or not, and there is no wrong choice. To understand the shaping of life by randomness. I was admitted to the university because of the family environment of science and engineering. My father instilled in me "learn math, physics and chemistry well" since I was a child. Graduate students are all graduate students with good grades, so I should take one. The doctoral degree is to solve the Beijing hukou. Are not designed in advance or particularly forward-looking.

Fan Deng, who played the debate in his early years. Image source: Weibo, Fan Deng

But one thing, I never gave up trying, never gave up studying, and never said, "Come on, I’ll just get along." When I entered CCTV, I couldn’t do many programs I wanted to do, but I exercised a lot of ability in the process of making samples.Therefore, life is not clear about success or failure, and it is good to enjoy your life.

Listening to books is unreliable?

It is the arrogance and prejudice of intellectuals.

Fan Deng believes in the power law. As long as 1,000 loyal members are willing to pay for his knowledge and recommend it to their families or employees, it will be a success. Some members have further become the agents of studying in Fan Deng. This company does not need to advertise, and people and word of mouth have become the natural distribution channels of knowledge products in Fan Deng.

NBD: Which is better, listening to books or reading by yourself?

Fan Deng:For most people, listening to books is much better than reading, because the books I talk about are basically books that are not easy for everyone to understand. Listening to books can sort out the context more quickly and enter this field.

When we were growing up, all teachers did one thing-telling books, but who spoke better. So you don’t have to be resistant to new things,Many intellectuals feel that listening to books is unreliable at first, and they think how good they are at reading. This is a kind of arrogance and prejudice.

Fan Deng, who is telling a book. Source: Weibo, Fan Deng

NBD: How did the price of 365 yuan a year come from?

Fan Deng:It’s easy to remember that 365 yuan is one yuan a day, and it’s not too much to charge one yuan a day. We have a product called "Fan Deng tells the Analects of Confucius", and we set up a punch-in training camp, that is, we pay 300 yuan to join the punch-in training camp. If we don’t stop punching once, we will refund the fee.

This is actually a charging mode, but the completion rate of this punch-in training camp can reach 96%, and almost everyone has to refund their fees in the end, but I am particularly happy because they followed me to learn the Analects from beginning to end. Many messages said that if you don’t punch in on the last day, you will find it useful to learn and don’t refund your fees. It shows that there are many people who are willing to learn, and it is enough for us to do business with these people.

NBD: Will this pricing change?

Fan Deng:I don’t know, maybe it’s free, but I don’t tend to be free. Free things just spend your time. And because it’s all free, you will only choose the part that interests you, but follow me, you can hear physics, entrepreneurship, history … and books that you think have nothing to do with yourself, and you won’t take the initiative to read.The essence of education is encounter with knowledge, and search and independent choice lose the possibility of encounter.

NBD: What are the criteria for choosing what books to talk about?

Fan Deng:We hope that more people will read better books and not make decisions based on the number of hits of this book. Because the user seems to vote with traffic, he thinks he likes listening to parenting books, but if he is pushed parenting books for a long time, he will not go with you, and he will feel boring slowly. We should explore the potential of everyone. People who like to listen to parenting can also understand philosophy and physics. This is what Confucius said, "A gentleman is not a tool", and our content is a completely anti-Internet algorithm.

Some time ago, we also put on the shelves the content of "The Power of Calculus". Many people think how dare you talk about such an unpopular content of calculus? I just think that it is precisely because there are few people who know calculus that we should talk about this book and let everyone know how important calculus is. The CEO of a big platform often chats with me, saying how do you sell serious content so well? Isn’t it just for entertainment and people who eat melons who like to watch it? I don’t think so. I think everyone has an upward pursuit. If I make those serious contents wonderful and easy to understand, someone will be willing to pay.

Fan Deng, who is telling a book. Source: Video screenshot

It’s good to be listed.

Can’t go public,It doesn’t hinder doing what should be done.

When you open a web page and search for the term "Fan Deng", the most common content that appears in your field of vision is "annual income of 1 billion yuan". In fact, this number is still increasing. In the "double 11" in 2021, Fan Deng made a membership promotion, and sold a total of more than 300 million membership fees a week. During the reading festival, the sales volume exceeded 400 million yuan. In any era, scholars who "will make money" are often the most able to stimulate the public’s nerves.

NBD: At present, the most praised by outsiders for studying in Fan Deng is that the annual income exceeds 1 billion yuan. Is this figure accurate? What is the revenue structure?

Fan Deng:We are a very transparent company, and we do not hide the company’s revenue figures.In 2020, it will be about 1 billion yuan, which will nearly double the growth during the epidemic.

We are actually a company that spreads knowledge with my personal IP brand as the core. In terms of revenue structure, at present, the biggest revenue segment of the company is definitely Fan Deng’s subscription products, "Listen to me for 365 days", with a large number of subscribers and a high renewal rate. Many users have followed it for 78 years, and this part of the revenue is very stable and has been growing slowly, accounting for 60%~70% of the total revenue.

In addition to my products, there is also "Extraordinary Intensive Reading", where experts from all walks of life are invited to give lectures, such as professors of philosophy department of Fudan University, parenting experts, partners of McKinsey and so on. In addition, we also have course business, publishing business and offline bookstore. We published about 100 kinds of books in 2021, and there are more than 200 offline bookstores nationwide.

Fan Deng’s famous reading teacher Image source: Fan Deng reading official website

NBD: Is this growth rate within expectations?

Fan Deng:Actually, it’s a little slower than I expected. Exponential organizations are growing very fast, and it is normal to reach hundreds of millions of users in almost three or four years, such as Tik Tok. Reading in Fan Deng is published by traditional education. Compared with these industries, it will appear that we are fast, but it is slow compared with the Internet.

NBD: In July, 2021, Shanghai Soybean Network Technology Co., Ltd., the main operator of Fan Deng Reading, completed the latest round of financing. Is it preparing for the listing plan?

Fan Deng:We just want to do the right thing, it’s good to be listed and we can develop further; We can’t go public, and it doesn’t prevent us from doing what we should do.

Personal IP growth will not slow down

Maintain anti-vulnerability and ensure sufficient cash flow.

Knowledge economy is like a besieged city. In the besieged city, countless fans regard Fan Deng as an idol of knowledge and are willing to pay for it; But outside the besieged city, once financing, it will always face the scrutiny of the capital market-how to eliminate the uncertainty caused by high dependence on personal IP and the sale of "non-standardized" products. When dealing with personal brands, some people make "retreat arrangements", while others choose "not to slow down".

NBD: For content companies that are highly dependent on personal IP, there will be many concerns in the capital market. What do you think?

Fan Deng:Our products are not personal IP products, but intellectual property products. If I don’t talk about new books now, the company’s income will also exist, because so many books I have talked about before are subscription products with long-term existence and long-term revenue.

Although we are a weekly program, there are 700 people in our team. In addition, personal IP is only the starting point of the company. Now we are developing a matrix product structure, with our own publishing business and offline bookstore, as well as our own shopping mall, curriculum business and vocational skills training school.

The rapid development of science and technology will replace many people’s careers. Since we see this trend, we should do vocational skills training. For example, it is difficult for take-away workers to deliver takeout all the time in the future, so we should create some jobs that are more valuable as they get older.

Offline Bookstore Image Source: Weibo, Fan Deng

NBD: With the development of other businesses, the revenue structure of the company will be more balanced?

Fan Deng:Although the income from listening to books accounts for the largest proportion at present, the growth rate of other sectors is very fast, and it is certain that they will exceed the income from listening to books in the future.

We will not deliberately slow down the growth of other businesses to cater to that ruler, nor will the growth of my own IP slow down.But we should also do other businesses faster, so that the company can develop healthily.

NBD: What do you think of the trend of knowledge payment?

Fan Deng:The market develops periodically, and it seems that knowledge payment is still a good track at present. While referring to the market, the company will also focus on the business it wants to do.

My wife runs a beauty salon. One day, she said that she saw an article analyzing the trend of the medical and beauty industry, so I said it was unnecessary. First of all, what you are doing is not the whole medical and beauty industry, and that trend has nothing to do with you; Secondly, that trend may not be accurate; Third, seeing more trends affects your initial heart, and the trend says that you don’t make money, then you are shaken?So we only do what we have to do, while maintaining anti-vulnerability and abundant cash flow.If there is a bigger black swan incident, which leads to a major setback for the company, we still have a larger choice and may even become better.

Reporter’s Notes |

When Lecture Room first appeared, there was also controversy.

The emergence of new things is always accompanied by controversy. When the lecture room appeared, there was a lot of controversy. Can serious knowledge be told in this way by laughing and cursing?

However, an intellectual said it well, whether talking about the Analects of Confucius or Historical Records, at least it stimulated more ordinary people’s interest in understanding and getting close to historical classics.

In the digital age, the ways of knowledge dissemination are becoming more and more diverse. Whether reading or listening to books, the effect of knowledge payment on everyone varies from person to person.

However, under the trend of entertainment first, it is a good thing that some people are willing to promote reading and serious reading, create diverse content and innovative reading forms, so that more people are interested in reading and users have more choices.

Reporter |Ding Zhouyang Wen Menghua

Edit |Dong Xingsheng Song Hong Cheng Peng Yi Qijiang

Vision |Shuai lingqian

Video editing |Zhang Jian

Typesetting |Dong Xingsheng Ma Yuan

| The copyright of this article belongs to"every headline"All |

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