China's current economic situation
Starting With.
- Posted:
4/9/2009
China's current macroeconomic situation
The current macroeconomic situation is unique, is different from the mid-90's serious inflation, but also different from previous years continued the trend of deflation. Although last year the consumer price index from negative to positive, the means of production of investment goods and some strong price gains last year, nine, in October after the more obvious trend of rising prices, but consumer prices rose in addition to fast food and other agricultural products, the other relatively weak, even downward. The overall consumer price index to see a reasonable range of movement also. Although China's investment in some industries due to the expansion of the more fierce, caused by some material such as coal, electricity, oil, supply planning, but our labor is not tight, and the unemployment rate is still growing; money is not tight. Very poor depositors; production capacity is not strained, most especially in the manufacturing sector, industrial consumer goods and even loose excess capacity. China's potential economic growth rate of about 9-10%. Now the actual growth rate and potential growth rate of only the lower limit before reaching the ceiling. However, bottleneck encountered should pay attention to, because it affects the overall development. Running from an economic point of view, both the current local overheating, especially the phenomenon of over-investment, and, in general, supply exceeds demand, the problem of insufficient effective demand. A few years ago, our country's macro-control policy, in essence, "from the song" economic policies, pro-active fiscal policy is expansionary fiscal policy, prudent monetary policy, sound speakers, in fact, at the same time increasing the money supply to prevent financial risks. Opportunity has been out of deflation now, the macro-control policy should be from "from the song" policy to "neutral" policy. From "from the song" to "neutral", that is, a moderate tightening of the requirements. Pro-active fiscal policy is gradually reduced intensity, the direction of the adjustment process in transition. Prudent monetary policy has to be some tightening, but not too tight. The so-called can not be too tight, that is, inflation can not control the use of some serious braking means. Consumption of some key hot spots and investment will continue to support, but also supports the expansion of employment; but excessive investment in low-level redundant to "Clipping" and "neutral" macroeconomic policies, in essence, is to "double prevention" , it is necessary to prevent the growth of signs of inflation, but also to prevent recurrence of deflation trends. To adhere to fine-tune from top to bottom: elastic moderate, which is central to the "stabilization policy, a moderate change" is the same.
To prevent the deflationary trend, although not urgent, but to be alert to its reproduction. Direction from the economic point of view, this year from last year is the trend of deflation into inflation trends. Therefore, the first signs of inflation pressure block, with particular attention to control excessive expansion of investment. To prevent the ups and downs, the key is to prevent a large investment from. Big ups and downs in the economy as a whole, often due to excessive expansion of investment. First of all, the law of investment expansion is caused by the expansion of demand for investment goods, and then cause the expansion of consumer demand, and then in turn caused the supply of production capacity and product expansion. Therefore, the track of price trends, and the means of production of investment goods is up first, after the rise of consumer goods; eventually lead to both decreased due to oversupply. Trends in the current round of price increases in China as well as product prices higher than the upper reaches of the downstream products. In accordance with General Orders, the lower reaches of the final consumer goods prices lag of about six months to a year. However, this round of price increases in China, will smooth the upper reaches of the products delivered to the downstream product prices, compared with the past, blocked a lot of factors. Such as the rapid expansion of the gap between people's income, employment growth lagged behind the economic growth, education and other social security spending is expected to lead to increased consumption, such as declining tariff reduction, abolition of import restrictions, as well as international deflation has not been the past and so the demand for final consumption by the above limit the impact of the means of production prices of consumer goods it is difficult to pass the final. As for the upstream products can increase the ultimate consumer through the cost-push price increases may not be so, mainly due to wage labor. Difficult because of the employment problem, do not go up, inflation that is a core mechanism of the round of wages and prices turned up, and now can not see the signs occur, it is now far away from the serious inflation. Under such circumstances, one or two years later, over-investment in some sectors, if not effectively control the formation of excess capacity. Will lead to deflationary pressure. Therefore, a new round of investment expansion caused by the excessive expansion of capacity to pay close attention to. Through the proper control of the investment scale, we can deter investment and lead to inflated prices of capital goods leading up to prevent inflation in the first signs of growth, but also caused by the construction of curb excessive overcapacity and prevent deflationary trends in reproduction, the realization of dual anti - purposes.
Now for the macro-control authorities are very vigilant to prevent inflationary pressures, and to that end has taken a series of measures to shrink the money supply and credit, it is very necessary. Money supply growth this year and the new arrangement the size of loans were lower than the actual level of the previous year, contribute to the excessive expansion of investment constraints, control of inflation trends, so that year-on-year CPI growth rate remained at 3%. But we do not exclude the development of the situation can not be expected to occur uncertainties shown in the credit policy of financial regulation and control enough not effectively control the scale of investment in upstream product rose rapidly to the downstream transmission of the final product, causing a sudden jump in inflation expectations, the bubble demand (including demand for the assets and products) of the phenomenon of the outbreak, escalation of inflation. If the CPI rose more than 5%. And lasted for several months, more than half a year, the situation in inflation, the need to consider the introduction of more strict regulation and control measures, such as substantially reduce the deficit bonds, an upward adjustment in interest rates, reserve ratio to further improve such means, but this is only for reference expected, and have a backup of. At least in the near future the possibility of less realistic.
People now feel reassured that a useful theory of inflation has greatly narrowed the gap in the market, we raised the alert to prevent inflation. Like in 87 years, the 88-year period of inflation, as inflation was solemnly policies conducive to economic growth as a policy recommendation in the People's Daily published by the incidents do not recur, and as currency in the 93-95 years expansion period was introduced as "double-digit inflation is not something frightening, double-digit economic growth, the idea was fun, it was advocated in response to what some people would no longer be there. The signs of inflation, certain interests Group on inflation expectations, and only the "hot-cold is not afraid of" the weak cry. However, the community and the government macro-control authorities more inclined to run on the macroeconomic response to explore the rational thinking, this is a very good phenomenon.
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