Xu Jin: How does the Chinese economy deal with external shocks?

Xu Jin: What does export mean for China's economic structure?What is the basis of the renminbi?Stable and non -radical policies will be the main points of the future.

In 2019, the tariff raising has become a foregone conclusion, and the impact of trade disputes is long -term and long -term.Under such circumstances, how can we deal with the deterioration of the external environment and from the perspective of doing my own work?

Comprehensively evaluate the impact of tariffs, knowing and knowing the other, I am afraid the first step.

At present, the tariff rate of US $ 200 billion in export products in China has increased from 10%to 25%.The Chinese Ministry of Commerce's statement is that the eleventh round of high -level Sino -US economic and trade consultation is in progress, hoping that the United States and China will be on each other.

The impact of tariffs on exports is currently involved in many research institutions, and the results are different.For example, Tsinghua University Ma Jun said in an interview recently that its negative impact on China's GDP growth rate was about 0.3 percentage points, which is a controllable range.

Jiang Chao Jiang Chao, a macro analyst at Haitong Securities, also pointed out that because China ’s exports of US goods with low profit margins, assuming that the increase in tax rates are reflected in product prices, and then assume that the export price elasticity is 1, then China’ s export to the United States will reduce an additional 30 billion yuan to 30 billion yuan.The US dollar accounts for 1.2%of China's total exports of US $ 2.5 trillion in 2018.According to the calculation of Wang Junjie (2012), the correlation coefficient between China's export growth and GDP growth is 0.18, which means that an additional 15%tariffs imposed on US $ 200 billion in Chinese export products will lead to about 0.22%of China's GDP growth rate.

The above judgment is generally similar, but it may be a bit optimistic.As a result, the conclusion may be very different through the setting of key parameters.For example, many studies have pointed out that China's export price of the United States is close to 2 instead of Jiang Chao's fake 1.At the same time, the impact of export reduction on GDP cannot simply calculate its related coefficient.Both aspects make more realistic assumptions, and the conclusions will be more pessimistic than Jiang Chao.

According to the principle of making military deployment, before the war, if the difficulty is more comprehensive, it should be a more secure approach.

What does it mean?

In addition to the value, more importantly, the structural impact of exports on China's economy.

From the perspective of customs data, in the first four months of 2019, China's imports and exports to major markets such as the European Union, ASEAN and Japan have increased. The EU is the largest trading partner.15.7%of the total foreign trade value; ASEAN is the second largest trading partner. The total value of trade with ASEAN is 1.28 trillion yuan, an increase of 9%, accounting for 13.4%of the total foreign trade value.

It seems that the United States is only the third largest trading partner. The total value of Sino -US trade is 1.1 trillion yuan, a decrease of 11.2%, accounting for 11.5%of the total foreign trade value.However, it is not possible to look at data through data, but should be analyzed in combination with economic conditions.

First, the importance of exports to US exports exceeds its surface value.On the surface, the proportion is not very high compared to China's huge exports.According to the data released by the General Administration of Customs, China exported 1.642 trillion yuan in 2018, of which 316 million yuan of exports to the United States, exports to the United States only accounted for 19.2%of the total exports.

However, from the perspective of trade surplus, China's surplus to the United States exports was US $ 324.4 billion in 2018, accounting for 92%of all trade surplus ($ 351.7 billion).If it simplifies the matter, it can also be said that through the integration of the industrial chain of other countries, China has formed its own export structure, and finally achieves a trade surplus through exports to the United States.In other words, the trade between China and other countries will eventually be difficult to achieve a surplus without using the United States as the final market.

Secondly, more importantly, the export industry of the United States can be said to be the leader of the Chinese export industry.Economic empirical research has found that in the economy of developing countries, the export department has the fastest full factor productivity increase. Some people have done a metaphor, saying that the export industry of developing countries seems to be on an automatic escalator. As long as it maintains the export, the export department will generalUnder the pressure of international competition and power, the automatic full -factor productivity improvement will be obtained.

Obviously, China is also in line with this law.

In fact, after China's economic performance after joining the WTO, it can be said that the export department's significant efficiency progress gap in the non -exporting department has supplemented the most powerful evidence so far for the above theory.

Taking the United States as the final market of China exports is conducive to China's huge industrial chain integration global factors. In an industry with the highest degree of transfer of technology, find a large market for China's rapid expansion of production capacity, and accept the above -mentioned automatic escalators improvement.EssenceIt can be said that for the largest and most competitive market production products, it constitutes the fastest part of China's export sector.

Therefore, from the perspective of the overall economy, the importance of exports is that it brings the Chinese economy, not just a surplus and foreign exchange, but the overall iteration upgrade of industry and technology.Because of this, the effect of tariffs, if it is only initially reflected in 2018, after 2019, it will become more obvious and become a new trend.

After the tariff rate is improved, the decision -making effect of the enterprise will be gradually reflected.Judging from the survey of grassroots, 10%of tariffs were imposed before, and many companies were shaken, but most of them still maintained a wait -and -see attitude. If it was a 25%tariff, it was enough to let many companies start action.

I have recently met a friend who is developing a foreign trade enterprise to move out of Southeast Asia.This business used to be blank, but the trade dispute became a hot spot after.From the perspective of small and medium -sized enterprises, the most concerned is not geopolitics, but costs.In the Pearl River Delta, a labor cost is 6,000 yuan, and the labor cost of Cambodia is about 1,500 yuan.For some large companies, in addition to low tariffs, the local market is also a major feature, such as OPPO and other companies.For export -type enterprises, after the tariff rate is improved, the domestic cost disadvantages are becoming more and more obvious.

Clarifying the economic significance of data, from the combination of strategy and tactics, is conducive to making more comprehensive research and judgment for the next policy.

How to deal with China

From the perspective of great history, the growth of China's economy has mainly come from three major support in the past 40 years.That is, the institutional dividend and release of the reform, the demographic dividend of the liberation of the urbanization, and the open dividends brought by the WTO.It can be said that there is no last point, and the first two points cannot be played.Correctly understanding the context of the times helps to clarify the upcoming changes.

In contrast, the Chinese economy is no longer adolescent and has begun to enter a smooth -growth L type.Judging from the macroeconomic data in the first quarter of 2019, the first quarter of GDP increased by 6.4%year -on -year, and CPI rose 1.8%year -on -year.This has triggered market discussions. Previously, the nouns such as the new cycle have entered the dust of the times, and the trend of the Chinese economy has entered a new normal.

With the huge amount of Chinese economy, there is naturally there is room for moving space.For external shocks, the so -called economic toughness does exist.However, this space cannot be enlarged infinitely, and there are also difficulties in the family.In recent years, the reform of state -owned enterprise reform and local debt has caused finances to be stressful. In the future, the economy has declined. Even if it is stimulated, it is difficult to achieve past results.

Because of this, for the Chinese economy, in the change of changes, striving for economic stability rather than a large radical policy should be the focus of the future.

Outside the United States, it is obviously possible to fight for exports in other fields.In addition, increasing the pace of openness and facing reverse globalization with a reform attitude will be the main points of the future.In the internal, monetary policy is very important in policy response.On the one hand, with the stalemate of the Sino -US disputes, the pressure of the renminbi has increased. After MayThe looseness will obviously lead to the further increase of RMB pressure.

From this point of view, there are conflicts in these two aspects. Only by cautious response can we take this policy steel wire rope.The central bank's disclosure of large areas of water is not necessarily the best countermeasure. It should consider light and darker, directional and targeted looseness, as the tone of the future monetary policy.

What is the future of the RMB

Looking back, what is the basis of the renminbi?Whenever the renminbi falls, there is always a discussion of the RMB anchor. Some people say that it is manufacturing, and some people say that it is real estate.These views are popular, and the depth of their mistakes reflects the many paradoxes of the current economic issues.Frankly speaking, the renminbi is essentially no anchor, and modern currency does not require anchor.The essence of currency is the payment commitment, and whether the institutions related to issuance and payment keep their promises.

Because of this, the future of the renminbi directly depends on the choice of the central bank, indirectly, depending on the trend of China's economy.Most of the soft -class net worth is bound to real estate at RMB. The stable economic development is related to the greatest benefit of most people.

In the past 40 years, the Chinese economy has gone through countless twists and turns, won the second place in the world, and improves the life of more than one billion people within one or two generations.A more confident economic country, internal and external policies, undoubtedly sufficient capital to uphold the principle of rationality and solve problems in advance.

Because of this, the policy adjustment of China's economy should have a global consideration.In traditional wisdom, strategy and diplomacy are more important in international relations.

At the next stage of the Chinese economy, entering the new crossroads, we need to find new motivations.From an incremental perspective, the new exit direction and the new domestic demand are naturally the meaning of the question.However, the problem that should be faced should still face the turmoil and response caused by Sino -US trade disputes, which will eventually determine the next decade of the Chinese economy, or the future destiny of one or two generations.

Note: This article represents the author's own point of view. The author is also the founder of the Economy Reading Club.