China's economy may run in the middle of "U"

Liu Jingsong Liu Jingsong China's economy has seen the worst and is gradually improving. With the stimulus of positive fiscal policy and moderately loose monetary policy, the rapid decline of our economy has been curbed. Monitoring by the China Economic Boom Monitoring Center and the Goldman Sachs (Asia) monitoring and early warning system showed that the index had rebounded for 4 consecutive months since last December, with 97.4, 98.0, 98.6, 99.1 and 99.7 respectively from November 2008 to March 2009. China's manufacturing Purchasing Managers ' Index (PMI) has rebounded for 5 consecutive months, with 38.8, 41.2, 45.3, 49.0, 52.4 and 53.5 in April last November, according to data released by the National Bureau of Statistics and the China Logistics and Procurement Federation. In January-April this year, the size of the new credit was as high as 5.17 trillion yuan, and at the end of April, RMB loans grew by 29.72%. Broad money supply over the normal growth, April reached 25.95%, the narrow money supply growth rate reached 17.48%. In the first quarter, the growth rate of fixed asset investment reached 28.8%, real growth was 19% higher than last year, and the total retail sales of consumer goods grew by 15%, and the real growth rate was 3.6% higher than that in the same period last year.　　The rally, the housing market, and the market's performance exceeded expectations: All this suggests that China's economy is showing signs of recovery. But it should be noted that this does not mean that the economy will soon enter a new boom, and that the current upturn is in contrast to the worst, the upturn in economic growth from 14% to 6.1%. And there is no chance that economic growth will return to an average growth rate of 9.8% over the past 30 years.　　And in terms of the highest growth rate in the future, it will become increasingly difficult for the Chinese economy to reach two-digit growth, and the average growth rate in the past 30 years is likely to be the highest growth rate of the next economic rise. China's economic upturn will not be yimapingchuan, there may be repeated during the next few months to run the "U" in the middle part of the possibility of large, after a period of recuperation, the Chinese economy will accumulate a new round of boom period of energy. The reason: First, the recovery in the US economy takes time. Despite a marked slowdown in the US economy, there are signs of a recession coming to an end, but as companies, households, financial institutions and Governments repair their balance sheets, and as America's aging problem grows, the US economy is likely to grow at a slower pace and for a longer period of time.　　So it is in Europe and Japan.　　Second, even if there are some factors conducive to the improvement of China's exports, such as the increase in export tax rebate rate, the depreciation of the dollar, external need to return to normal levels, foreign trade sector contribution to economic growth to restore to the original level, it will take time. Third, the first 4 months of this year, the total level of consumer prices, industrial products, factory price of the total level of a year-on-year decline0.8%, 5.1%, indicating that China's overcapacity situation is still more serious, digestion of these capacity will take time.　　The first quarter industrial growth rate of only 5.1%, the employment situation is grim, tax and revenue negative growth, the use of electricity is still small decline, also explains the problem.　　Four, private investment in the gradual recovery, but the restoration of confidence there is a longer process. Its five, the real estate market after the Spring Festival is not sustainable. Real estate prices in the world generally fell, China's real estate prices did not fall, which makes China's real estate prices appear higher. February 2009 U.S. Second-hand housing sales price of the median is 165,400 U.S. dollars, new house sales in the middle price is 209,000 U.S. dollars. Domestic prices are basically catching up with America.　　Therefore, whether from the time, or from the space, this round of real estate market adjustment is not over. In six, the rally over 2,600 points is hardly sustainable. The 2,600-point stock market corresponds to a 31 times-fold P/e ratio, and the city's net rate is 3.3 times times. In terms of valuations, the world is already the highest. From the securitization rate (including Hong Kong), and the United States is equivalent. The ratio of circulation market value and resident savings balance is about 30%.　　Such stocks do not have a sustained rise in the base. Finally, the last round of the economic cycle of the rise of 8 years, and 2007 is the top of the economic boom (the symbol of almost all production factors are in short supply), so the adjustment can not be completed in just two years. Now many people worry that too much money will lead to inflation. I think the current worry is superfluous, and now it is about deflation, not inflation. Too much money will eventually lead to inflation, but not necessarily in the short term, there is a problem with the speed of currency flow. If the market subjects get the money, not to spend, but to deposit, not to invest in the real economy, but to speculate on the stock market, then, in the short term, the real economy, the speed of circulation is actually falling, it is difficult to form inflation. The United States will not, because more money in the United States to fill the financial institutions hole, did not enter the real economy. From the total supply and demand can also see this point, the external need to decline, the original production capacity to transfer to domestic sales, domestic supply increased, at this time the possibility of a comprehensive rise in prices is very small. The data have proved this. In the first 4 months of this year, the consumer price index fell 0.8% year-on-year, and the industrial product price index fell by 4.6%.　　It can be judged that there will be no inflation for at least a year. (The author is a researcher of Shanghai Academy of Social Sciences, Shanghai Institute of Development Research)