Since the fourth quarter of last year, under the influence of a series of national macro-control policies, China's economic operation has initially curbed the momentum of the decline in growth rate, showing positive changes in stabilizing and positive factors. So, how do you view the current direction of the Chinese economy? Relevant persons of the National Bureau of Statistics have made preliminary analysis on several current macroeconomic issues.
Basically, the economy has bottomed out. Q: Some analysts believe that China's economy has begun to bottom out. Is that true?
A: The cyclical fluctuations of the economy are generally divided into four stages: prosperity → recession → depression → recovery. Internationally, the fluctuations of GDP and other related indicators are usually used to determine the stage in which the economy operates, and GDP is the most comprehensive and important basis for judgment. Since agriculture and service industries are relatively stable, and GDP accounting only has quarterly data, measuring changes in economic cycles in China depends more on the changes in industrial production and related important products.
From the perspective of GDP operation, GDP growth in the first half of last year was 10.4%, and growth in the third quarter was 9%. The growth rate in the fourth quarter fell to 6.8%, and further fell to 6.1% in the first quarter of this year. According to the performance and trend analysis of the main economic indicators in the 4th and 5th months, the GDP in the second quarter is expected to be close to 8%, showing a relatively obvious trend of rebounding. From the quarterly GDP situation, the bottom of this round of economy should be in the fourth quarter of last year and the first quarter of this year. From the quarterly comparison of GDP estimated by the relevant departments, the growth rate was 2% in the third quarter of last year, 0.1% in the fourth quarter, 1.5% in the first quarter of this year, and an increase of more than 2% in the second quarter. Judging from this, the bottom of this round of economy should be In the fourth quarter of last year.
From the perspective of industrial production, the added value of industrial enterprises above designated size increased by 16% in June last year, and then declined significantly month by month. In November and December, they only increased by 5.4% and 5.7% respectively, and further slowed down to 3.8% in January and February this year. Since March of this year, it has shown a more obvious fluctuation trend. The growth rate in May basically recovered to the level of October last year. The trend of industrial operation shows that the bottom of this round of economy should be in November and December last year and January and February this year.
From the perspective of major industrial products, the national steel production in October last year was the lowest level in the whole year. From December, it began to show volatility. In May this year, it reached 1.848 million tons, the highest level since last year. The national average daily power generation has plummeted from the July high. Since March of this year, it has started to pick up, with more than 9 billion kWh in 3, 4, and 5 months, and nearly 10 billion kWh in early June.
In short, no matter from GDP, industrial production growth, or physical indicators such as steel production and power generation, if there are no major big accidents, it can be basically concluded that the current economic downturn in China has bottomed out, the most difficult time. Already passed, the next stage of the economy is expected to stabilize.
Insufficient demand is still objective. Q: What are the main contradictions in the current economic operation?
A: With the implementation of the central government's policy of expanding domestic demand, the contradiction of insufficient demand has eased, but the lack of demand is still the main contradiction in the current economic operation.
Under the circumstances that domestic demand is accelerating, why is the growth rate of industrial production still on a lower platform? The key is that foreign demand is seriously shrinking. From the current economic growth rate, there is still a big gap with the normal level. From the perspective of equipment utilization, the utilization rate of production capacity in many industries is low. In addition to the overcapacity of some industries, the current low production capacity utilization also reflects the objective existence of insufficient demand.
From the perspective of price level changes, whether it is CPI or PPI, the overall decline is still year-on-year, indicating that demand is still insufficient relative to supply.
The above situation shows that insufficient demand is still the main contradiction in China's current economic operation. In the next stage, we must continue to adhere to a proactive fiscal policy and a moderately loose monetary policy, and maintain the continuity and stability of macroeconomic regulation and control policies.
There are still three major obstacles to the steady recovery. Q: What obstacles still exist in China's sustained and steady economic recovery?
A: Insufficient external demand is the main contradiction. As the world economic recession has not yet bottomed out, it is still in a deep recession as a whole, and there are still variables in the next stage. According to the analysis report of the International Monetary Fund on April 22, in addition to oil consumption, the current global economic indicators such as per capita GDP, consumption, investment, import and export, industrial production, employment and international capital flows have all fallen more than those since 1975. economic recession. The potential financial risks have not been fully exposed, the scale of non-performing assets is huge, and the default rates of credit card loans and real estate loans continue to climb. The overall situation remains complex and grim.
Due to the obvious slowdown in the world economy and the sharp decline in external demand, external demand has become the main force dragging down the economic slowdown. The contribution rate of net exports to economic growth rose from 1% in 2003 to around 20% since 2005 (of which 24.1% in 2005, 19.3% in 2006, and 19.7% in 2007), and the financial crisis in 2008. The impact fell back to 9.2%, and further changed to -2.8% in the first quarter of this year (compared with 6.9% in the first quarter of last year), driving the economy to -0.2 percentage points.
The second is the overcapacity of some industries. First of all, overcapacity will directly lead to the under-employment of some enterprises, increased competition, and falling product prices, which will ultimately affect the willingness of enterprises to invest, dragging down the recovery of relevant industries and the entire national economy. Secondly, overcapacity will add to the difficulties of production and operation in most industries, exacerbating the losses of loss-making enterprises, resulting in low overall efficiency of enterprises. Since the beginning of this year, although the company's profit reduction has been reduced month by month, it has generally declined substantially, which has seriously affected the ability of enterprises to expand production.
The third is that inflation expectations have risen. Although the current price level is still at a low level, due to the increase in the early stage of monetary credit, the prices of primary products in the international and domestic markets generally rose significantly, and the public expectation of inflation expectations may increase in the next stage. Once the price increase continues to accelerate, not only will the price increase continue to accelerate, It will increase the cost of micro-subject economic activities, and it will also reduce the space for macro-control. From the perspective of the international market, the prices of primary products such as major stock indexes, oil and non-ferrous metals have risen sharply, causing all parties to face possible inflation concerns. Once the price of primary products in the international market continues to rise too fast, it may increase the pressure on China's imported inflation. From the domestic market, the prices of resources and assets may rise further.
Basically, the economy has bottomed out. Q: Some analysts believe that China's economy has begun to bottom out. Is that true?
A: The cyclical fluctuations of the economy are generally divided into four stages: prosperity → recession → depression → recovery. Internationally, the fluctuations of GDP and other related indicators are usually used to determine the stage in which the economy operates, and GDP is the most comprehensive and important basis for judgment. Since agriculture and service industries are relatively stable, and GDP accounting only has quarterly data, measuring changes in economic cycles in China depends more on the changes in industrial production and related important products.
From the perspective of GDP operation, GDP growth in the first half of last year was 10.4%, and growth in the third quarter was 9%. The growth rate in the fourth quarter fell to 6.8%, and further fell to 6.1% in the first quarter of this year. According to the performance and trend analysis of the main economic indicators in the 4th and 5th months, the GDP in the second quarter is expected to be close to 8%, showing a relatively obvious trend of rebounding. From the quarterly GDP situation, the bottom of this round of economy should be in the fourth quarter of last year and the first quarter of this year. From the quarterly comparison of GDP estimated by the relevant departments, the growth rate was 2% in the third quarter of last year, 0.1% in the fourth quarter, 1.5% in the first quarter of this year, and an increase of more than 2% in the second quarter. Judging from this, the bottom of this round of economy should be In the fourth quarter of last year.
From the perspective of industrial production, the added value of industrial enterprises above designated size increased by 16% in June last year, and then declined significantly month by month. In November and December, they only increased by 5.4% and 5.7% respectively, and further slowed down to 3.8% in January and February this year. Since March of this year, it has shown a more obvious fluctuation trend. The growth rate in May basically recovered to the level of October last year. The trend of industrial operation shows that the bottom of this round of economy should be in November and December last year and January and February this year.
From the perspective of major industrial products, the national steel production in October last year was the lowest level in the whole year. From December, it began to show volatility. In May this year, it reached 1.848 million tons, the highest level since last year. The national average daily power generation has plummeted from the July high. Since March of this year, it has started to pick up, with more than 9 billion kWh in 3, 4, and 5 months, and nearly 10 billion kWh in early June.
In short, no matter from GDP, industrial production growth, or physical indicators such as steel production and power generation, if there are no major big accidents, it can be basically concluded that the current economic downturn in China has bottomed out, the most difficult time. Already passed, the next stage of the economy is expected to stabilize.
Insufficient demand is still objective. Q: What are the main contradictions in the current economic operation?
A: With the implementation of the central government's policy of expanding domestic demand, the contradiction of insufficient demand has eased, but the lack of demand is still the main contradiction in the current economic operation.
Under the circumstances that domestic demand is accelerating, why is the growth rate of industrial production still on a lower platform? The key is that foreign demand is seriously shrinking. From the current economic growth rate, there is still a big gap with the normal level. From the perspective of equipment utilization, the utilization rate of production capacity in many industries is low. In addition to the overcapacity of some industries, the current low production capacity utilization also reflects the objective existence of insufficient demand.
From the perspective of price level changes, whether it is CPI or PPI, the overall decline is still year-on-year, indicating that demand is still insufficient relative to supply.
The above situation shows that insufficient demand is still the main contradiction in China's current economic operation. In the next stage, we must continue to adhere to a proactive fiscal policy and a moderately loose monetary policy, and maintain the continuity and stability of macroeconomic regulation and control policies.
There are still three major obstacles to the steady recovery. Q: What obstacles still exist in China's sustained and steady economic recovery?
A: Insufficient external demand is the main contradiction. As the world economic recession has not yet bottomed out, it is still in a deep recession as a whole, and there are still variables in the next stage. According to the analysis report of the International Monetary Fund on April 22, in addition to oil consumption, the current global economic indicators such as per capita GDP, consumption, investment, import and export, industrial production, employment and international capital flows have all fallen more than those since 1975. economic recession. The potential financial risks have not been fully exposed, the scale of non-performing assets is huge, and the default rates of credit card loans and real estate loans continue to climb. The overall situation remains complex and grim.
Due to the obvious slowdown in the world economy and the sharp decline in external demand, external demand has become the main force dragging down the economic slowdown. The contribution rate of net exports to economic growth rose from 1% in 2003 to around 20% since 2005 (of which 24.1% in 2005, 19.3% in 2006, and 19.7% in 2007), and the financial crisis in 2008. The impact fell back to 9.2%, and further changed to -2.8% in the first quarter of this year (compared with 6.9% in the first quarter of last year), driving the economy to -0.2 percentage points.
The second is the overcapacity of some industries. First of all, overcapacity will directly lead to the under-employment of some enterprises, increased competition, and falling product prices, which will ultimately affect the willingness of enterprises to invest, dragging down the recovery of relevant industries and the entire national economy. Secondly, overcapacity will add to the difficulties of production and operation in most industries, exacerbating the losses of loss-making enterprises, resulting in low overall efficiency of enterprises. Since the beginning of this year, although the company's profit reduction has been reduced month by month, it has generally declined substantially, which has seriously affected the ability of enterprises to expand production.
The third is that inflation expectations have risen. Although the current price level is still at a low level, due to the increase in the early stage of monetary credit, the prices of primary products in the international and domestic markets generally rose significantly, and the public expectation of inflation expectations may increase in the next stage. Once the price increase continues to accelerate, not only will the price increase continue to accelerate, It will increase the cost of micro-subject economic activities, and it will also reduce the space for macro-control. From the perspective of the international market, the prices of primary products such as major stock indexes, oil and non-ferrous metals have risen sharply, causing all parties to face possible inflation concerns. Once the price of primary products in the international market continues to rise too fast, it may increase the pressure on China's imported inflation. From the domestic market, the prices of resources and assets may rise further.
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