China's economy is now just "pouring winter warm"

Over the past few years, China's excessive growth in investment has left a lot of excess capacity.　　I refer to the current situation of China's economy as "pour winter warm", we now like to say "LSC", I feel is "pour winter warm", the current short-lived recovery is only the beginning of winter warmer, cold winter is still behind.　　Inventory cycle adjustment is not a rebound signal for the first quarter of this year's data, our explanation should be very cautious. New loans in the first quarter of 4.58 trillion yuan, we think, through the credit pile out of the "stabilisation" can not continue? In addition, the adjustment of the inventory cycle can not be seen as a signal of economic rebound, there are other factors. One of the things that should not be overlooked is the investment cycle. GDP growth in the first quarter was mainly driven by government investment. But the 20% per cent increase in government-led investment has not led to production, and the industrial value is only 6.1%. 20% of all investment growth estimates are in stock. Over the past few years, China's excessive growth in investment has left a lot of excess capacity.　　The adjustment has not yet begun, so it cannot be said to be a bottoming out. America's economy has not yet been adjusted for the developed world, the worst is over for the financial system, and the danger of a system collapse is over, but the hardest thing to do is to restore financial institutions to their balance sheets.　　The financial system's non-performing asset ratios are still rising, and the task of financial restructuring is far from over. In terms of consumption, America's unemployment rate was 8.5% at the end of March, not the highest in history. The market is widely expected to exceed two digits in the US unemployment rate.　　Unemployment has not yet peaked, and consumption downward adjustment is not in place. The US economy is bottoming out, and asset prices are down to the bottom, and households and businesses balance their balance sheets.　　U.S. House prices are estimated to fall another 15%, 20% or so, at least half a year, to return to the historical average. America's savings rate, which averaged about 7% and 8% per cent in the past, was already near the 0 line before the financial crisis.　　Now the savings rate rebounded to 4%, 5%, but the historical average is still a distance, about a year or two of stable time.　　Although not yet in place, but the US market itself has made a big adjustment, rather than the government fiscal stimulus, so we are relatively optimistic about the U.S. economy, that the U.S. economy to lead the rebound. China's economic restructuring is just beginning to fail, and any recovery is unsustainable until economic imbalances have been adjusted. What do we do now? The US needs to "leverage" to reduce debt and reduce liabilities for businesses, households and the economy as a whole.　　China wants to "go to inventory", digest the stock of enterprises, reduce investment, increase consumption and reduce savings. The government's various stimulus plans, in my view, have slowed the adjustment. China's restructuring has just begun. Stock adjustments are only part of the problem; Because of the reverse operation of government policy, China's economic structural problems are more serious than in the past, investment ratio is higher than in the past, consumptionThe rate is further down. After the outbreak of the financial crisis, we have repeatedly said that we cannot rely too much on overseas markets, but are we adopting policies such as export rebates or encouraging companies to rely on overseas markets? Short-term actions of policy can cause short-term macroeconomic figures to look good and warmer, but not solve the structural problems of China's economy. It is time to encourage companies to move their markets from abroad to the mainland as quickly as possible.　　If these structural problems are not solved one day, a sustainable recovery is a hollow word. I do not think there is a shortage of demand in China, China is a developing country, our people's living standard is still relatively low, and the western countries can not compare, there is plenty of demand, do not need government money to create demand.　　What the government needs to do is to solve the people's worries, improve the social security system, give tax cuts to the common people, tax the enterprises, mobilize the power of the private sector, mobilize the power of the market, and release the huge demand of the folk. (The writer is professor of ceibs)