论文部分内容阅读
What should people do for the economic index of China that failed to meet the market expectation? The PMI of China in August was further adjusted downward on September 3, showing the desire of enterprises launching the manufacturing activity has dropped to the lowest point in nine months.
The GDP growth rate this year might be lower than the 7.5% goal fixed by the Chinese government and hit the historical low in 20 years. The extreme pessimists even think that the Chinese economy is going to meet the anticipated breakdown. Others think that the Chinese economy is going through a more benign landing. Some people advocate letting go of this period for self-motivated development without distorting the economic situation by issuing new economic stimulus package. Other people are paying attention to the long-term task of rebalancing economy.
The several voices related with China’s economy remind people of that the slow Chinese economy is a result from the long-term structural change and the arrhythmic “expansion –contraction – expansion” policies after the 2008 financial crisis. Everything started from the US$ 60-billion stimulus package four years ago, which is followed by tight policies to prevent the overheating of economy. In the past half of the year, China adopted the mild expansion policy to deal with the Euro Zone crisis and the weak recovery of Chinese economy.
But the long-term structural change of China is like a sustainable change of development pattern. The pattern needs to be adopted to the maturing economies, say, it should be more innovative and less resource-intensive. The structural change should be started much earlier, but the stimulus package in 2008 pushed the economic growth rate of China back to the unsustainable two-digit level, even though it should drop to around 8% at that time.
This change is featuring the interrelated rebalancing process. The first one is the spatial rebalance of moving business activities from coastal areas to inland areas and from urban areas to rural areas. The second one is the rebalance of macro economy of moving the focus on international demand to domestic demand, which includes the shift from investment to consumption. This dual rebalance should not be considered as a target. Through comparison, we will see that the unbalance is usually related with successful growing process with different function and duration.
The spatial rebalance is a result of the growing middle class along with their growing demand in China, as well as the ageing of population shining against fast urbanization. These trends heightened the ratio between domestic and international demand. The more convenient transportation of some central provinces will make them play a more important role and function as bridges between trade-driven coastal areas and consumption-driven inland provinces. Then, due to the lower salary requirements and property cost compared with coastal areas, the central areas of China are more and more attractive for domestic economy and even some export-oriented industries.
The spatial rebalance goes well in every aspect. The economic growth rate in inland areas of China is higher than in coastal areas, an opposite to the 30 years’ situation. Inner Mongolia, Hunan, Sichuan and Guizhou and some other not-that-famous provinces saw their economic growth rate reach 14% or higher last year while coastal areas had to endure the decreasing orders in manufacturing.
When the coastal cities are gradually matured, this dual path attracted those foreign investors who were still longing for the 20% return. Those central and western cities become their ideal destinations. Hunan and Henan can each compete with any of the biggest country in the world in population, while Chongqing, a municipality like Beijing and Shanghai, equals Venezuela in population and is six times as much as in Singapore.
The rebalance of macro economy from foreign demand to domestic demand happened earlier than expected. This is because the grand economic stimulus package in 2008 absorbed most of the excessive savings, which generated the huge trade surplus from 2005 to 2008. Influenced by this, the ratio between China’s trade surplus and GDP dramatically decreased from over 8% five years ago to the present day’s 2% or so.
However, people are overly worried about the unbalance of low proportion of consumption in GDP and the high proportion of investment in GDP. This unbalance is somewhat attributed to the twisted statistical data about expenditure, including the underestimated housing service data in individual consumption and the exaggerated investment data. The proportion of consumption might be lowered by 10 percent. Another reason to call the excessive concerns is that individual consumption increased by 8%-9% annually despite the never-ending global financial crisis.
As the extraordinarily high investment from the 2008 stimulus package gradually fell back, the proportions of consumption and investment in GDP are going to be more balanced. Because the ratio of consumption against GDP in inland areas of China is higher than coastal areas and the spatial rebalance is going to promote the rebalance of expenditure. With the faster urbanization, this process will last over ten years.
Then, what China can and should do to deal with this situation.
The reality is that the depressed foreign demand and the inventory adjustment caused by slowed demand have already weakened the economic growth outlook. The decrease of economic growth rate is thus at least 1 percent higher than last year. As the inflation is eased, proper expansion policy is not that risky, but could function a little in that situation.
Making big changes to foreign exchange rate and interest rate will be on the opposite way of the longer-term goal. So they are not practical choices. However, the more flexible reform in recent times is an active measure. In addition, the policy of affordable housing and the easing of restricting labor force flow will be good for the spatial rebalance.
It is a wise method to initiate the financial reform that is good for enhancing the social service to relax the current economic depression. The private sector should be given more support with expanded financing channels, giving them a comparatively freer access to the economic fields dominated by state-owned enterprises. These measures are of great help to realize the structural change China has been expected for a long while.
The GDP growth rate this year might be lower than the 7.5% goal fixed by the Chinese government and hit the historical low in 20 years. The extreme pessimists even think that the Chinese economy is going to meet the anticipated breakdown. Others think that the Chinese economy is going through a more benign landing. Some people advocate letting go of this period for self-motivated development without distorting the economic situation by issuing new economic stimulus package. Other people are paying attention to the long-term task of rebalancing economy.
The several voices related with China’s economy remind people of that the slow Chinese economy is a result from the long-term structural change and the arrhythmic “expansion –contraction – expansion” policies after the 2008 financial crisis. Everything started from the US$ 60-billion stimulus package four years ago, which is followed by tight policies to prevent the overheating of economy. In the past half of the year, China adopted the mild expansion policy to deal with the Euro Zone crisis and the weak recovery of Chinese economy.
But the long-term structural change of China is like a sustainable change of development pattern. The pattern needs to be adopted to the maturing economies, say, it should be more innovative and less resource-intensive. The structural change should be started much earlier, but the stimulus package in 2008 pushed the economic growth rate of China back to the unsustainable two-digit level, even though it should drop to around 8% at that time.
This change is featuring the interrelated rebalancing process. The first one is the spatial rebalance of moving business activities from coastal areas to inland areas and from urban areas to rural areas. The second one is the rebalance of macro economy of moving the focus on international demand to domestic demand, which includes the shift from investment to consumption. This dual rebalance should not be considered as a target. Through comparison, we will see that the unbalance is usually related with successful growing process with different function and duration.
The spatial rebalance is a result of the growing middle class along with their growing demand in China, as well as the ageing of population shining against fast urbanization. These trends heightened the ratio between domestic and international demand. The more convenient transportation of some central provinces will make them play a more important role and function as bridges between trade-driven coastal areas and consumption-driven inland provinces. Then, due to the lower salary requirements and property cost compared with coastal areas, the central areas of China are more and more attractive for domestic economy and even some export-oriented industries.
The spatial rebalance goes well in every aspect. The economic growth rate in inland areas of China is higher than in coastal areas, an opposite to the 30 years’ situation. Inner Mongolia, Hunan, Sichuan and Guizhou and some other not-that-famous provinces saw their economic growth rate reach 14% or higher last year while coastal areas had to endure the decreasing orders in manufacturing.
When the coastal cities are gradually matured, this dual path attracted those foreign investors who were still longing for the 20% return. Those central and western cities become their ideal destinations. Hunan and Henan can each compete with any of the biggest country in the world in population, while Chongqing, a municipality like Beijing and Shanghai, equals Venezuela in population and is six times as much as in Singapore.
The rebalance of macro economy from foreign demand to domestic demand happened earlier than expected. This is because the grand economic stimulus package in 2008 absorbed most of the excessive savings, which generated the huge trade surplus from 2005 to 2008. Influenced by this, the ratio between China’s trade surplus and GDP dramatically decreased from over 8% five years ago to the present day’s 2% or so.
However, people are overly worried about the unbalance of low proportion of consumption in GDP and the high proportion of investment in GDP. This unbalance is somewhat attributed to the twisted statistical data about expenditure, including the underestimated housing service data in individual consumption and the exaggerated investment data. The proportion of consumption might be lowered by 10 percent. Another reason to call the excessive concerns is that individual consumption increased by 8%-9% annually despite the never-ending global financial crisis.
As the extraordinarily high investment from the 2008 stimulus package gradually fell back, the proportions of consumption and investment in GDP are going to be more balanced. Because the ratio of consumption against GDP in inland areas of China is higher than coastal areas and the spatial rebalance is going to promote the rebalance of expenditure. With the faster urbanization, this process will last over ten years.
Then, what China can and should do to deal with this situation.
The reality is that the depressed foreign demand and the inventory adjustment caused by slowed demand have already weakened the economic growth outlook. The decrease of economic growth rate is thus at least 1 percent higher than last year. As the inflation is eased, proper expansion policy is not that risky, but could function a little in that situation.
Making big changes to foreign exchange rate and interest rate will be on the opposite way of the longer-term goal. So they are not practical choices. However, the more flexible reform in recent times is an active measure. In addition, the policy of affordable housing and the easing of restricting labor force flow will be good for the spatial rebalance.
It is a wise method to initiate the financial reform that is good for enhancing the social service to relax the current economic depression. The private sector should be given more support with expanded financing channels, giving them a comparatively freer access to the economic fields dominated by state-owned enterprises. These measures are of great help to realize the structural change China has been expected for a long while.