Speed Up Structural Adjustment And Reverse Economic Downturn

Second half of the economic downside risk has not yet been lifted.

If the downward pressure on investment, consumption and exports persists, it is wrong to think that the economic growth rate will rise in the second half of this year.

In fact, there are still doubts about the two quarter of 7% this year, because both power generation and railway capacity are "zero", which does not match the growth rate of 7%.

In the first half of this year, China's economy maintained a 7% growth rate. After a continuous downturn in April, investment stabilized from May to 11.4%, exports rose from -2.8% in May to 2.1%, and consumption rose from the base of April 10% to 10.6% in June. So there are many analyses that the two quarter is the bottom of the economic downturn, and the second half of the year will be faster than the first half of the year.

I do not think this is a comprehensive understanding, or that some people who hold such judgement do not enter the field of analysis.

First of all, although the investment is stable, the investment growth trend in the future can not be seen in the amount of investment completion. This amount of data is more about the release of capacity, because after a general production project is completed, it will become a new capacity and join the market operation.

What China is facing now is

Excess contradictions, both factors of demand decline, and capacity growth factors, so the capacity growth has dropped from over 20% in the past three years to about 10%, which means that the peak of capacity release has passed, which is good for easing the current excess contradictions, but because investment generally accounts for half of the total demand in China, economic growth rate is mainly determined by the growth possibility of new investment.

The new investment mainly depends on the two indicators of total investment in new projects and total investment in construction projects. The growth rate of the former is only 1.6% in the first half of the year, and the latter is only 3.7%, which has been below 4%.

Generally speaking, this has decreased from two indicators to a drop in investment completion quota. For example, the total investment growth rate of construction projects in October last year was 11.5%, and the growth rate of total investment of new projects was 13.7%. In June this year, we saw a 11.4% growth rate of investment completion.

Therefore, if the growth rate of investment in construction projects and new projects in June this year is below 4%, the growth rate of investment will not exceed 5% in the first quarter of next year.

In this way, the decline of investment growth rate will not only touch the bottom but will lead to a further decline.

Second, look at exports.

Exports rebounded from -2.8% in May to 2.1% in June, and the rebound rate was nearly 5%, which should be said to be a strong rebound. However, I think this figure is false and has two reasons:

First, the stock market fluctuated sharply in June. The Ministry of public security is looking at malicious short selling and has obtained clues. The starting point is false export.

At present, China's monetary and financial market is not open, which limits the inflow of foreign capital from capital account. If there is a large amount of foreign capital flowing into China, China will be short of money.

We must draw on other channels of capital inflow.

Fake exports simply do not export goods, and use fake export contracts to allow foreign capital to flow into China from trade.

Export growth rate is only 0.9% in the first half of this year, but the trade surplus is 1 trillion and 600 billion yuan (6.2090, -0.0004, -0.01%). Of course, there is a normal trade surplus, but there may also be a large amount of offshore capital from fake exports.

Second, the illusion of exports can also be seen from the mismatch between export data and the growth rate of delivery value of industrial exports in industrial production statistics.

2012~2014 for three years, the annual export growth rate is 5.3%. The annual growth rate of the export value of industrial products is 6.1%. The two are very close, and the latter is higher than the former.

In May this year, the export growth rate was -2.8%, matching with the -3% value of the industrial export value, but in June, the delivery value of industrial exports was -2.8%, while the export of Customs Statistics jumped to 2.1%. The abrupt departure of the two data showed that it was abnormal. Combined with the Ministry of public security, it was found that the exit clues of foreign funds from fake trade could confirm that there was a big false factor in the recovery of exports in June.

Third, look at consumption.

The growth of consumption is based on economic growth. The downward trend of economic growth in the first half of this year is still continuing, so the recovery of consumption since April is difficult to explain by economic growth. But in the first half of this year, the stock market rose from 3200 to 5100, and 5 and June were the time when individual investors concentrated into the stock market. Therefore, the recovery of consumption is likely to be the "wealth effect" of the stock market. However, the sharp decline of the stock market since late June has made the wealth effect become a "reverse effect" in the second half of the year.

If the downward pressure on investment, consumption and exports persists, it is wrong to think that the economic growth rate will rise in the second half of this year.

In fact, there are still doubts about the two quarter of 7% this year, because both power generation and railway capacity are "zero", which does not match the growth rate of 7%.

As for this question, I have already put forward this question in the analysis of last year's economic situation. What I would like to stress here is that the average annual growth rate of investment is 22.4%, the export growth rate of RMB is 14.8%, and the growth rate of retail sales of consumer goods is 14.9%, which is significantly higher than that of the same period. The growth rate of investment, export and consumption in the past 3 years is 18.1%, 16.8% and 13.9% respectively. The growth rate of the same period is 7.6%, and the growth rate of three large demand is still significantly higher than that of the same period.

But this year, the export growth rate is only 0.9%, which has been significantly lower than that.

If the growth rate of investment falls below 4% in the first quarter of next year, it may only be 7% higher than the consumption growth rate, but it will not be too high. At that time, the growth rate of 7% will be very difficult.

Moreover, the economic growth rate is not a digital game, but the creation speed of wealth. If the economy falls to a certain extent, it is a large number of enterprises failing and a large number of employees unemployed.

Therefore, facing the downside risks, we have the right macro countermeasures.

The correct macro strategy is to seize the leading role of urbanization in opening domestic demand, and carry out large-scale structural adjustment as soon as possible.

At present, the government regards structural upgrading as the goal of adjustment. This choice is right, but we must clarify what is the correct direction of upgrading the industrial structure.

The historical experience of the industrialized countries has proved that in the heavy industry stage, it can be divided into two sections: heavy foundation and heavy processing. First, we must overemphasize the basic barrier, that is, to enrich the basic industries such as energy, pportation and raw materials, and then enter the stage of heavy processing industry.

Heavy processing industry, because of the long industrial chain, can greatly enhance the added value of products, so it will achieve high economic growth by promoting the upgrading of industrial structure. When the Japanese theorists summarize their experience in industrialization, they say that "the upgrading of industrial structure is the high value added of products".

For example, a ton of steel production bicycles can only sell about 10 thousand yuan, and the car can be sold to 100 thousand yuan, this is because a bicycle parts only a few dozen, processing chain is very short, but a car has tens of thousands of parts, need dozens of industrial departments to produce, the industrial chain is much longer than the bicycle.

At the beginning of this century, when China entered the current high-speed growth period, the basic sectors such as iron and steel, nonferrous metals, cement, electricity and coal all had more than 100% growth rate of investment. Today, these basic sectors have become serious overcapacity departments, indicating that China's industrialization is on the eve of the high growth period led by the heavy processing industry. Therefore, the so-called China's economic growth is shifting from high speed to medium speed.

Unlike Japan and South Korea, where the heavy and heavy processing industrial structure is changing, they were at the peak of urbanization. With the large number of rural population entering the city, huge demand for housing and automobiles was generated, which absorbed the capacity of heavy infrastructure industries and entered the era of rapid growth with the advent of high degree of processing.

Although China's per capita income has exceeded 7 thousand US dollars today, 870 million of the 1 billion 370 million population is still farmers, and the two yuan structure separated from urban and rural areas has not been broken with the increase of per capita income. This is why the domestic demand is strongly suppressed.

We now want to lead the overcapacity to overseas, and the export of steel has nearly 100 million tons, but we do not see that this is precisely the prospect of China's next round of high growth, which is a great misunderstanding.

Therefore, speeding up the pace of structural adjustment is the right way to reverse the downward trend of the economy, otherwise the downlink will not stop.