Jin Shangjun: The Chinese economy is walking towards Old Road in Japan

Jin Shangjun

"China's economy and Japan are more and more similar in Japan 30 years ago." Many people have this view.In fact, there are similarities and differences.Observation of the same and differently, it is conducive to looking forward to the trend of China's economy in the future.First list three similar points.

1. Development of declining childization

Regarding the overall fertility rate of China, the government report shows that the same is the same as Japan, but it has fallen to 1.16 according to the statistical results of the United Nations.With the improvement of income and high education, the phenomenon of enlightenment is not only in Japan, but also a common problem in East Asia.This is different from Japan and other countries. Now the speed of declining childization has exceeded Japan.However, it is an exaggerated view that "the reduction in the labor population brought by the declining childization" is an exaggerated view.Because China has one hand.If you extend the retirement age of men 60 years old and female 55, they can make up for the reduction of the labor population.This is similar to that women who have encouraged their children to grow up in the past 20 years, and men who re -hired men who retire their age to make up for the reduction of the labor population.

2. Real estate bubble

Four years ago, a Chinese real estate operator once said: "China's market value of China's real estate is estimated to be about $ 65 trillion (about S $ 86 trillion), which exceeds the sum of the United States, Europe, and Japan."The Japanese in this sentence felt that "this is exactly the same as Japan 30 years ago."

The real estate prices in major cities in China exceed 10 times the average annual income of the workers, and the investment rate is not half the interest of the mortgage. No matter from which indicator, house prices are too high.This not only aggravates the burden of rent -free, but also the burden of repayment of home buyers, but also accelerate the concentration of wealth to the wealthy class with a large number of housing, becoming toxins that hinder economic development.

The Chinese government attaches great importance to its adverse effects. After the real estate bubble broke out again in 2020, it strictly tightened the capital chain for developers.However, this method of tightening funds has led to the unprecedented sluggishness of real estate since 2021, exactly like Japan's economic bubble economy in the 1990s.Japan's overstatement measures have caused the bubble economy to collapse and open the door to "lost 10 years".

In this way, it is inevitable that some people will worry that the real estate market in China will also follow Japan, but one thing is different from Japan.Because the Chinese government monopolizes land supply and strongly involved in the real estate market, it is difficult to break the real estate bubble.In the 10 years after Japan's peak in 1991, the land price fell to a quarter of the original, and it was difficult to imagine that China would have the same foam collapse.

Nevertheless, it is too early to feel at ease.The bubble economic collapse is just like the human body is to lift the accumulated toxins in the body.The bubble economy does not collapse, the burden of rent and loan repayment is still heavy, and wealth will continue to continue to hinder economic growth to the wealthy class.Regardless of whether real estate prices continue to rise or fall sharply, the Chinese government has fallen into a dead end without a way out.

Three, the fiscal deficit and government debt have increased sharply

China has made up for the gap in economic downturn through public investment and tax cuts, which has increased the fiscal deficit, which is similar to Japan.

Especially serious local finances.According to data from the Ministry of Finance in January, the general budget revenue in 2022 was 2%compared with the previous year, but it decreased by 6%compared with the original budget.In addition, 30%of the total local fiscal revenue, the revenue from the sale of land was 23%compared with the previous year.Due to economic downturn, tax reduction and large -scale tax reduction measures, and high expenditures such as the huge nucleic acid inspection costs caused by the zero -clear policies of the crown disease. For local finances, last year was a year of worsening.

Last year, in order to support economic growth last year, the central government further issued special local bonds in the dilemma to carry out infrastructure construction.The new issuance of special local bonds is 3600 billion yuan (RMB, the same below, about S $ 698 billion) in 2020, 3600 billion yuan in 2021, and 4 trillion yuan in 2022.In the past three years, it has issued more than 2.1 trillion yuan of special bonds.

In addition to the formal debt of local debt, local governments must also be responsible for the hidden debt of the financing platform.According to the International Monetary Fund (IMF) report announced in January, the local debt (local debt balance) and local debt that hidden debt was 350 million yuan in 2016, and 920 million yuan in 2022, five yearsThe increase is nearly twice, and it is expected to increase further by 50 % in 2026 to 1.435 billion yuan.The growth rate of this drama reminds people that Japan's foam economic deficit accumulated in cope with the economic and financial crisis after the bubble economic collapse of the 1990s.Moreover, unlike Japan, which has long maintained zero interest rates, China's long -term national bonds and local bond interest rates are close to 3%, and the interest rates of hidden debt will be higher.This is different from Japan.In this way, the local government of the Chinese government only needs to bear more than 5 trillion yuan in interest in 2026, and debt may continue to expand like a snowball.

If you look at local finance alone, people worry about whether the Chinese economy will have no way, but this is also worrying.Because the central financial deficit accounted for about 3%of the GDP (GDP) in 2022, from the perspective of the state treasury expenditure exceeding the national treasury income (net deficit), it was only 5%to 6%, which was still healthy.In other words, the burden of local governments such as social security is increasing, but the central government does not provide enough financial resources, causing local finances to be in trouble.Local fiscal relying on land revenue is also for the same reason.

The Xi Jinping regime, who entered the third term, faced the Japanese economy of the Chinese economy, and should start the fundamental reform of the sustainable development of local fiscal fiscal as soon as possible.Otherwise, it will only have a huge negative impact on the national life and financial system.

The large amount of issuance of special bonds in the past two or three years is mainly based on local finances, but the actual situation is the "national policy" implemented to support the prosperity, so the central government should also be repaid.Regarding the pension, it is also necessary to change the status quo of wealth from a wealthy area to a poor place.

If such reforms are carried out, the central government's fiscal deficit will increase sharply and it will have to issue a large number of government bonds, but at least a period of time, the economy will not fall into a deadlock.Because China now holds huge foreign pure assets, even if the issuance of government bonds can be fully digested in China, the central government will not go bankrupt for a considerable period of time. Japan is an example.

Under the trend of declining childization and aging, China's central government has continuously accumulated deficits and debts. It is the most worrying way to go to Japan.Chinese often say "learning Japan's (failure) experience", but has taken the same bad path. What is going on?

The author is a guest researcher at the Institute of International Issues of Japan

Modern China Research Expert