Li Wo Wall: ＂Six Stability＂ is Chinas difficult challenge

Author: Lee Wo Wall

The first wave of trade in China and the United States began on July 6, 2018, and officially announced that imported goods imported from about $ 34 billion, including machinery, electronic products and high -tech equipment, and cars.EssenceChina also declared war immediately to impose 25%tariffs on 545 items such as agricultural products, automobiles, and aquatic products native to the United States, and about $ 34 billion.Although the trade war is not a soldier, it is a war that kills without blood. Its impact expansion and political and economic levels.

The impact of the trade war

I feel this, the President of China ... When presiding over the Politburo meeting at the end of July last year, he pointed out that the current economic operation has changed steadily, the economic downward pressure has expanded.Exposed.Pay great importance to this, enhance forestry, and take countermeasures in time.It is necessary to do six stable work such as stable employment, stable finance, foreign trade, stabilizing foreign capital, stabilizing foreign investment, stabilizing investment, and stable expectations. At the end of the year, the Central Economic Work Conference held again and reiterated that it changed the game.

In fact, in the vast stability, there is six unstable need to be stable.I. Employment: Due to the impact of the Chinese economy in the trade war, many enterprises have closed down, and foreign capital withdrawal has led to an increase in laid -off workers.In addition, 8.34 million college graduates reached a peak in history last year, and the employment benefits were severe.According to UBS estimates, affected by the trade war, the potential unemployment population of China's export -related industries may be as high as 1.5 million.

2. Financial In terms of finance: In the whole year of last year, the fluctuations in the RMB were extremely intensified, and many times on the verge of breaking the 7 levels; A -share decline was the world's largest and foreign capital withdrawal;It can be described as dark clouds.

3. In terms of foreign trade: According to data released by China Customs, the export growth remained stable after April last year, especially due to the export of exports from September to October, the annual growth rate of exports rose to 14.5%and 15.6%.The performance was extremely strong; but in November, the influence of the trade war appeared, falling sharply to 5.4%, and a decrease of US exports by 25%.Immediately afterwards, both imports and exports announced in December dropped.Among them, imports fell 7.6%, the largest decline in the two and a half years; exports fell by 4.4%, which was also the largest decline in two years.Exit first, then suffering, slowing down the annual economic growth.

4. In terms of foreign capital: Thailand's foreign -funded enterprises in China are mainly exported by products; many foreign investment has transferred production bases and withdrew from China due to concerns about the upgrading of the trade war and the deterioration of China's business environment.The withdrawal of foreign investment has made the Chinese financial and foreign exchange market worsen.

5. In terms of investment: For a long time, investment has been the heaviest economic growth engine in China GDP; but since 2010, fixed asset investment growth has fallen rapidly, the main reason is from serious overcapacity; coupled with the reform of state -owned enterprises, it has led to the reform of state -owned enterprises.Private enterprises have difficulty borrowing loans, and private investment willingness is not ahead.The government -led infrastructure and real estate investment, it is difficult to effectively improve the overall investment.

6. Expectation: What does the current economy look like?What is the running trend?What should I do next?In other words, judging whether the prosperity direction is correct and whether it is expected to be rational and accurate, it will affect economic decision -making.

Multi -arrows are fully fought

In the face of six instability, the central and local arrows are issued, and the fiscal and monetary policy are both pronounced.Including the recently introduced measures for stable employment in various parts of the country, and the number of people and banks have 5 consecutive reductions in the liquidity, stabilizing financial and RMB exchange rates, tax cuts and fees, expanding local bond issuance stable investment, and open market stable foreign investment.Qi Fa, comprehensively fighting.

In the past, facing the global financial tsunami or Asian financial turmoil, China can show high -efficiency governance capabilities, which is better than the response performance of countries around the world.In the face of Trump launched a trade war against China, its challenges are not in the previous global financial tsunami. Whether China can show its excellent governance response ability again and stabilize the six unstable and be concerned.

(The author is a professor at the Department of Finance and Finance of Tamkang University and deputy director of the Cross -Strait Financial Research Center)