Source: Ming Pao
Author: Yin Ruilin
Once upon a time, China's high -speed development was regarded as an excellent student of the global economy, but in just a few years, China's economic development has slowed rapidly.If this is due to the crown disease epidemic, it deserves to decrease with the epidemic situation, and the economy is expected to recur, but this is not the case.On the contrary, reality is that the national real estate and property market still declines on a large area, severe unemployment, dull exports and investment, and the recovery of the central and local fiscal revenue.China ’s authoritative theory magazine seeks the content of the speech of the mainland government’ s General Secretary of the Mainland Government Earlier, entitled “Several major issues of current economic work” at the end of last year.The implementation of the strategy of expanding domestic demand and taking more powerful measures to enable social reproduction to achieve a virtuous circle. "
If deep analysis of the countermeasures, the fear of fear is half -effective
The expansion of domestic demand strategy proposed is to put the expansion of consumption in priority, to motivate the whole society through government investment and policy to motivate the whole society, and to play the support of exports on the economy.These policy directions are really opposite, but if you lack deep analysis of deep reasons that cause consumption and investment, the countermeasures of headache doctors will only have more than half of the effort, and even bring the opposite effect.Generally speaking, the main reason for consumption and investment is a large number of nationals, families, and enterprises. In the face of unemployment, layoffs, salary reduction and building prices, or even the newly purchased buildings, "bad tails" are also required.Repay the debt by the loan amount before the bubble explosion.
Furthermore, in the face of individuals and families in these dilemmas, if you still need to repay car loans at the same time and pay high education fees for children every month, it is inevitable that you choose "lying".choose.Furthermore, failure to repay debts from financial institutions in time, it will still be negatively scored by the "social credit" system in China. At that time, even buying tickets may face difficulties.It can be said that China is currently facing the sequelae of excessive relying on real estate credit expansion in the previous stage.Because of this, the current dilemma of the Chinese economy is different from the Grand Start of the US economy in 1929, which is closer to the actual situation of the Japanese bubble economy.From the perspective of historical experience, the former's solution is to increase government expenses to prevent the economy from falling in the economy, so that the social reproduction production will achieve a virtuous circle; but for the latter, the situation is much more complicated.
Traditional economics is based on the assumption that individuals and corporate economic activities are pursuing "Maximization of Profits". However"(Minimization of DebTs).As mentioned earlier, in the face of economic slowdown in the face of unemployment, layoffs, salary reduction, and sharp decline in building prices, the debt to be repaid is to repay the loan amount before the real estate bubble explosion.Therefore, in the face of revenue and unclear income at the same time, try to reduce consumption and investment as 100 % rational choice.
The change of profit to minimizing debt
Furthermore, due to the unstable real estate market market, it also affects banks to provide loans as mortgages; at the same time, individuals and enterprises have hesitated to borrow money again, and the effects of interest rate reduction on stimulating consumption and investment are not obvious., Everything is conservative.In this way, you can understand that in the 1990s, the Japanese economy, which was once like the Japanese and heaven. After the bubble was broken, the economic power turned instantly, becoming weak, and then fell into a period of adjustment for more than 20 years.In this way, you can realize that in the early days of the return of the return of the bubble economy, he was trapped in the hardships of individuals, families, and companies that were in assets.At that time, Hong Kong's rapid recovery was benefited from the open and free travel of mainland China. A large number of tourists from mainland to Hong Kong drove demand, and the business opportunities brought by reform and opening up to Hong Kong, such as the financial industry.Today, where are the needs and opportunities that are facing the crushing economy of the bubble economy?
Also, people tend to avoid debt litter, under the drive of minimizing debt.Japanese experience shows that even if the interest rate drops to near zero, it is difficult to stimulate people's new debt.In China, even the economic phenomenon of "analogy" is "anomalous".In addition, under the drive of minimizing the same debt, "asking for money or not" will realize the inventory as soon as possible to repay the debt, which is also reasonable.The vortex drives to the further decline (see Gu Chaoming's great decline, Shanghai University of Finance and Economics Press, 2019).
The constraints of "driving the whole society"
When private consumption and private enterprise investment failed to create effective social needs, Xi Jinping's speech mentioned that "effectively driving the entire society's investment through government investment and policy incentives" is important.However, there are two constraints that cannot be ignored.
First, the large area of wealth and liabilities of the central and local governments.Taking the "urban investment bond" as the main body of local governments as an example, Chinese media reported that the scale of China's urban investment bonds in 2022 may reach 65 trillion yuan (RMB, the same below).Urban investment bonds are an important way for local governments to raise urbanization funds through local financing platforms. It is an invisible debt.
Another constraint factors are that after the introduction of the 4 trillion yuan stimulus plan in 2009, the investment infrastructure projects in various places have successively launched, but under the Law of Diminishing Returns, the newly revenue project is getting he getting.Come less.Therefore, the demonstration of the newly added proposed projects needs to be more prudent and strictly monitoring.This is the same to the mainland and Hong Kong.
Different superposition factor crack down on China's economy
The burst of real estate bubbles is the main reason for constituting China's economic dilemma today; at the same time, the market and scientific and technological restrictions of Western countries led by the United States, and the impact of the impact of the three -year crown disease epidemic, are all from fromDifferent aspects exacerbate the blow to the Chinese economy.The import restrictions on China's imports and the "decoupling" of the global supply chain in the United States and other places have expanded from imports from Southeast Asia, India, Eastern Europe, and Mexico, replacing Chinese products, and naturally affecting the labor force and factory demand of mainland China.In addition, foreign capital evacuating China has also caused similar effects.According to data from the State Administration of Foreign Exchange earlier, it shows that foreign companies invested in factory construction in China from July to December last year to invest 42.5 billion US dollars, such as the decrease of 73%compared with the same period of the previous year.
The biggest impact of the United States' scientific and technological output restrictions on China is the goal of slowing down Xi Jinping's speech that "to accelerate the construction of a modern industrial system", which includes "accelerating new energy, artificial intelligence, biological manufacturing, green low -carbon carbon, Eremoors such as quantum computing and other cutting -edge technologies "and a series of related strategic emerging industries.As for the three -year epidemic and huge anti -epidemic expenses, it has put major pressure on the financial and local governments' finances, which has caused the recovery work that is urgently needed today.
Xi Jinping's first sentence of the above speech is the "economic work" in 2023.In fact, this also tells the current situation of China's economic dilemma.It is true that the solution of the problem also involves more complicated geopolitical factors, so that many issues such as state -owned enterprise reform and food security.The purpose of this article is mainly based on the observation of Japan and Hong Kong after the economic bubble economy is crushed. While sorting out an analytical structure, it reflects the severe level of China's situation today and hopes that the official response measures will be more targeted.
The author is a master's degree in Shangzhi University in Japan.
