China's economic slowdown

Economic slowdown, this is the price of structural adjustment must pay "New century" weekly reporter Zhang HuanYu Horosheng summer, the Chinese economy continued to "slow down."　　In addition to the export hyper-expected growth, July investment and consumption of the two major internal engine growth has fallen.　　A number of analysts believe that the July slowdown in economic growth is expected, the Chinese economy is gradually from the second half of 2009, the strong stimulus of the high growth towards a "soft landing." In the coming months, policies such as cleaning up local government financing platforms and real estate regulation will continue to be targeted for last year's economic stimulus byproducts, and energy-saving cuts and obsolete capacity are almost impossible to relent in the final months of "Eleven-Five" planning.　　The Fed's postponement of a quantitative easing of monetary policy and a downgrade of the Bank of England's economic growth forecasts for the next three years cast a pall over the prospects for a global economic recovery. If the internal active adjustment and the external uncertainty superposition, brings the Chinese economy growth rate to continue to fall, whether will bring the regulation policy the variable?　　Are the restructuring and growth patterns that are being pushed forward smoothly? "A modest slowdown in growth is the best environment for structural adjustment, and policy should not always take into account short-term economic fluctuations, but to prepare valuable time for long-term growth in the future."　　Wang Xiaoquan, a researcher at the decision Consulting department at the National Administration College, told our correspondent. In the process of structural adjustment, the short-term pains of economic growth are unavoidable. China's economy has continued to grow at close to 10% per cent over the past decade, but the process of structural adjustment and industrial upgrading has been slow.　　How to find a balance in the policy objectives of economic growth rate, managing inflation expectation and adjusting economic structure is the biggest test that policymakers face. The effect of regulation in July, China's industry above the size of the increase in the value of year-on-year growth of 13.4%, the increase fell 0.3% from June.　　Investment growth rate is also significantly lower than expected, from January to July, the urban fixed assets investment growth rate of 24.9%, compared to the previous six months fell 0.6%. The breakdown of industry data, the July industrial production growth rate fell, mainly six high energy-consuming industries caused by the slowdown.　　Laiyun, a spokesman for the National Bureau of Statistics, said at a news conference August 11 that this is mainly because the Chinese government has increased its supervision and elimination of energy saving and emission reduction in the two quarter, which has a downward impact on industry. The slowdown of investment and production in high energy consumption and polluting industries can be verified from the orientation of bank credit placement. The head of a state-owned bank loan management Department told our correspondent now the restructuring has just begun, banks to the backward production sector loans more cautious and wait-and-see attitude, not in line with the national energy-saving emission reduction standards of the new project will not do, has been on loan projects, if not meet the standards, even if the current efficiency is better,　　Also to gradually exit, after all, can not be maintained for a long time. Worries about investment are not confined to energy-saving emissions, and the "drug" of the New deal is slowly appearing in the field of real estate investment. The first pressure is real estate sales. July, real estate sales fell 15.4%, May and 6The month fell only about 3% year-on-year. Real estate New start area and construction area in July year-on-year still strong growth, respectively 66.5% and 43.6%.　　Investment in real estate development has also remained high, from January to July year-on-year growth of 37.2%. But that was more affected by the lower base of the same period last year. "In the next few months, the new area of real estate and the overall construction activities will be further weakened, to 2010 years of New start area may appear year-on-year decline."　　"Wang Tao, China's chief economist at UBS Securities, predicts. Zhangjian, senior economist at the Asian Development Bank, argues that real estate development investment is slowing down, on the one hand, it is related to the lag of the influence of policy on real estate development investment, and is also the embodiment of policy regulation direction. "The government now stresses that developers can not cover the land, in the policy to encourage real estate developers as soon as possible, in the unhealthy bubble squeezed out, but also to straighten out the real estate supply and demand relationship." In addition, the Government is also increasing investment in affordable housing.　　Zhangjian to this newspaper reporter to say. The government remains optimistic about the pace of investment growth.　　Laiyun that the government's strict control of new projects, in principle no longer increase, which led to a certain decline in fixed asset investment, but the Chinese government has some follow-up investment plans, such as the 2010 Western Development, regional economic development plan, will lead to investment growth. At the same time, the power of private investment is also gradually enhanced.　　Laiyun introduced that from January to July this year, private investment rose 31.9%, compared with the growth rate of urban fixed assets investment increased by 7%. "The growth rate is normal, do not fall back to have problems."　　"Wang Xiaoquan that GDP growth of about 8%, 7%-9% are normal, very good, conducive to structural adjustment." From the data of July, the effect of structural adjustment focusing on medium and long term is still not ideal.　　It is noteworthy that consumption growth has fallen, the July total retail sales of consumer goods rose 17.9%, the increase was 0.4% lower than in June. Zhangjian said that if the price of inflation is considered, the decline in consumption in July is more obvious, a little worried, it is necessary to attract attention. China has always wanted to expand consumption and boost consumption's contribution to economic growth, so there is a need for vigorous reform, such as raising the minimum wage and the introduction of the income distribution reform programme.　　In addition, the Government should increase spending on health care and secure investment in housing. Wang Xiaoquan is sceptical about the effects of the ongoing phase-out of capacity. "How many high energy-consuming projects last year can be pressed down?" "He's worried that if the economy is growing by 10% and businesses are making money, how could they be willing to turn it off?" "The best way to eliminate backward capacity is to moderate economic growth and naturally compete with the market for elimination," he said. "The head of the state-owned bank Loan management department expressed similar concerns to our correspondent," The recent list of companies that have eliminated backward capacity has been listed two or three years ago, but local governments are reluctant to turn it off. In addition, last year made a lot of infrastructure construction projects, steel, cement and other demand, will also increase the difficulty of elimination of capacity. "Inflationary pressureIn the process of economic deceleration, inflationary pressure still cannot be neglected. China's consumer Price Index (CPI) rose 3.3% per cent year-on-year in July, creating a New year high, mainly due to the tail-cutting factor and the sharp rise in food prices. In July CPI year-on-year increase, there are 2.2% factors, and the other 1.1% are affected by the new price factors.　　The increase in food prices contributed to the new price increases by around 70%. With the arrival of the food demand season, the negative effects of heavy rains and floods on the transportation and production of agricultural products are stimulating the price of agricultural products higher.　　The agricultural wholesale price index rebounded to 104% per cent year-on-year in July, according to the Ministry of Agriculture. The prices of agricultural commodities, including soybeans and wheat, have climbed recently in the international market.　　The negative factors of decreasing international food supply are gradually accumulating, which will also promote the domestic prices of agricultural products. Laiyun that, in spite of the current changes in agricultural prices there is some uncertainty, especially the international wheat production in the domestic market to produce a certain stimulus, but the impact of the CPI downlink factors are many.　　Overall, the power to curb prices may be greater than the impact of pushing up prices, the annual price is expected to maintain basic stability.　　According to the National Bureau of Statistics, after August, the end of the CPI effect began to weaken, June, July, the effect is 2.2%, the end of August factor will fall back to 1.7%, September continued to fall to 1.3%. Zhang Zhiwei, a macro analyst at China International Finance Limited (CICC), predicts that CPI may still face greater upward pressure in the coming months, but will gradually fall to around 3% by the end of the year. The main reason is that China's food reserves mainly rely on domestic supply, international food prices have little impact on the domestic market, the second half of the domestic economy is expected to gradually slow down, the CPI non-food parts may face downward pressure, the second half of the European and American economic challenges, the international commodity market price increase is less likely　　The risk of imported inflation has also been reduced. Of course, cautious worries exist as well.　　The spread of floods, resource price reform and wage growth in the second half of the year are some of the uncertainties that can push up the annual inflation level. Ms. Wang believes food prices are likely to rise further in the next two or three months, pushing CPI growth to a 3.5%-4% per cent annual high. "The price of service prices accelerated in July, which also reflects the conduction of inflationary pressures inherent in earlier credit expansions." "However, analysts say inflationary pressures will not trigger monetary policy adjustments." Wang Yu, JPMorgan's China chief economist, said the central bank would not raise interest rates until four, in view of the slowing growth and reduced input-cost pressures in recent months, despite the CPI's 3% per cent breakthrough.　　If the global economic recovery is clear in the four quarter and inflation expectations rise again, benchmark interest rates could rise by 27 basis points to curb inflationary expectations. Ms. Wang also believes that, as upstream price pressures decay and bank credit growth continues to be effectively controlled, the growth target for the year is eitheror monetary policy instruments, such as interest rates, will not be adjusted.　　Central banks are more likely to take administrative measures and accelerate the pace of renminbi appreciation slightly.　　The surprise "grab exit" is different from the internal driving force, and the external demand engine is stronger than expected. July, China's monthly export value and import and export values again record, import and export value of 262.31 billion U.S. dollars, an increase of 30.8%, of which, exports of 145.52 billion U.S. dollars, growth of 38.1%; imports 116.79 billion U.S. dollars, growth of 22.7%.　　July achieved a trade surplus of 28.738 billion U.S. dollars, the highest since February 2009, at a record high. After the seasonally adjusted, July exports, imports year-on-year growth of 39.4% and 27.3% respectively, the export chain growth of 1.2%, imports fell 5.6%.　　Export growth is higher than expected. Since May, China's exports have risen significantly.　　It is widely believed that this is caused by the anticipation of RMB appreciation and the adjustment of export drawback policy. From July 15 onwards, the Chinese government canceled some steel, non-ferrous metals and other goods export tax rebate. Compared with the same month last year, the policy raised the cost of related commodity exports in the second half of July, but also prompted companies to "grab exports" in the first half of the month.　　Customs data show that the July "grab export" effect exceeded the negative impact of increased costs. In the first seven months of this year, China's steel exports grew 92.4% per cent year-on-year, up from 9.2% in the first half, while the cumulative growth rate in the first half was 25.2% higher than in the previous five months.　　Steel "Rob Export" phenomenon is obvious. However, the future export situation is not optimistic.　　The new export order index has slipped for three consecutive months in China's manufacturing Purchasing Managers ' Index (PMI), released by the China Logistics and Procurement Federation.　　In China, HSBC's PMI, the new export Order index has been under the 50%-point demarcation line for two consecutive months. "China's export growth will still slow in the second half of the year" the research department of CICC believes that the leading indicators and the peripheral economy show high and low export situation, combined with the high base effect of the gradual recovery of exports in the second half of last year, the export growth rate is expected to drop to about 10% in the second half, but the risk of two dip in the global economy is less　　The impact of slowing external demand on China's economy remains manageable.　　The widening trade surplus has boosted expectations of a stronger renminbi. As long as China maintains a large surplus, the exchange rate will be a focus, Mark Williams at Mark Williams, a senior economist at the UK research consultancy, Economics.　　Although the central bank has announced a resumption of exchange for nearly two months, the best description of the renminbi is "pegged to the dollar". CICC expects that the three-quarter trade surplus will continue to be high as import growth declines faster, potentially pushing up expectations for a stronger renminbi.　　It is expected to appreciate 3% per cent by the end of the year and 6.62 for the dollar. Our correspondent Jing and Yu Hailong also contributed to this article