Decoding China's economic puzzle

This is the most complicated moment for the Chinese economy. On one side is the CPI, which has spiked after the credit binge, and worries about the two dip under the European debt crisis. Wandering at the crossroads of inflation and deflation, the "troika", which drives China's economy, is in the middle of a three-way drive.　　China's macroeconomic policy is in a delicate observation window.　　In the middle of June, the "financial countries weekly" in the representative or typical significance of the region, the field, launched a "troika" of China's economic growth of the special investigation, and to try to forecast the future trend of China's economy to provide some reference to the basic facts.　　Research shows that relying on the traditional "Tiegangki" project to pull GDP is declining, the demand for durable goods such as automobiles has been basically released under the stimulus policy, the economic downward pressure will increase with the gradual withdrawal of stimulus policy.　　The research also shows a resilient side of China's economy: Local governments have taken the initiative to restructure their investment structures, and have begun to introduce private investment into the "national community"; the rebound in the US and emerging markets has kept export orders rising and placed exports in the second half of a stable framework. Thus, the downside risks of China's economy should not be interpreted as a precursor to two of probes, more like a recuperation after a strong recovery.　　That may be the cornerstone of policymakers ' recent push for two changes and the start of export tax rebates.　　In the long run, whether the adjustment of economic structure can be reasonably completed makes the "troika" more balanced and coordinated to the Chinese economy, which will fundamentally affect the future trend of China's economy.　　This is particularly critical for China's economy, which is at the end of the decade-heavy industrialization cycle. "Local Investment Survey" "Tiegangki" low tide macro-control, so that the local government to expand infrastructure investment in the pursuit of no thought. Structural fine-tuning of government investment, began to introduce private investment into the "national common" industry to Wen/"Financial national weekly" reporter Wang Yuquang xie Ying If there is no accident, a "BYD" named the Urban Secondary road, will soon appear in the Changsha Yuhua District, Hunan Environmental Science and Technology Park. The road, which is 30 meters wide and nearly 3 kilometres long, is built for local government investment.　　and BYD Road cross-cutting, there are Kyu Bai Lu, Xing ' an road, such as several new roads. According to the local general engineering cost calculation, each construction of 1 kilometers of such a matching road, the funds required about 40 million yuan.　　Conservative estimates, the above several roads cost nearly 300 million yuan, all funds from bank loans. The dense road center is the planned Changsha BYD Automobile city, according to the Assumption, the automobile city occupies an area of about 2500 acres, the next three years also has 3500 acres reserved land. This will produce all BYD brand models, especially the electric bus for the "signature dish." Once this "Golden Rooster" began to "lay eggs", the next 3 years, each year to achieve 1.2 million units of production and sales, the annual output value can break 30 billion yuan, the annual tax revenue of more than 2 billion yuan, but also will drive a whole car industry chain stationed, solve tens of thousands of local employment。 Government investment fine-tuning before all else was conceived, there had been capital to restrain the impulse to cut the cake--opposite BYD Automobile City, the total building area of 340,000 square meters, can accommodate 40,000 students of the Changsha Vocational Education City Project, most of the school has been completed, September will usher in the first batch of freshmen.　　In the next two or three years, most vocational schools in Changsha will be relocated here to make this a "city". "These professional technicians are specially developed for BYD, and they will go to work in the opposite direction when they graduate."　　"Hunan Environmental Science and Technology Park Management Committee construction Bureau deputy director Yin Shenglin said." The vocational Education City project is also invested by local government, with a total investment of about 1.6 billion yuan.　　Changsha, director of the Project Investment Authority of the Development and Reform Commission, Peng Jianliang said that according to the state's incentive subsidy policy for the development of vocational and technical education, each school will receive a corresponding subsidy of 1500 yuan per student. Hunan Environmental Protection Science and Technology Park CMC Construction Bureau director Tao that Hunan Local auto industry has been not strong, there is no leader. BYD round Hunan's car dream. "So the project is not only Changsha, but also the focus of Hunan province."　　Provincial and municipal leaders of two of times on-site guidance, office, build a dedicated "green channel."　　One of the details is that BYD set up Changsha to create a "Changsha speed": From demolition, land expropriation, to "three-a-level", and then to enter into the construction and some of the plant capping, only half a year, more than the year to make BYD entrepreneurs proud of the "Shenzhen speed." In addition, the local government also intends to provide 300 million yuan industrial fund to support BYD's research and development business. "Annual payment of 40 million yuan per year."　　Behind the largesse of "government investment" to BYD, Tao, such as a "Yang Seek" is: the use of new energy vehicles this card, declared "National New Energy Vehicle demonstration base", so that now less than 4 square kilometers of "Provincial development zone" upgraded to 12 square kilometers of "national development Zone." Tao said, Hunan Environmental Science and Technology Park (formerly known as Yuhua District Industrial Park) in the past has been "grassroots park." Can introduce BYD new Energy vehicle project, during the hard untold. And once the expansion of the region, upgrade success, all efforts are not in vain.　　After all, the "National development Zone" means more land use indicators and greater policy space.　　In the consideration of Du Haixia, deputy director of Changsha Development and Reform Commission, it is the strategic need to accelerate local industrial upgrading and economic restructuring by supporting large enterprises to settle down in Changsha with the government's industrial funds. In the 2010 investment mentality, the Changsha development and Reform Commission made it clear: "The restructuring must be accelerated in the insistence on expanding government investment." "The government should, on the basis of maintaining the investment scale of infrastructure construction, increase its support to equipment manufacturing, High-tech industries, modern services and other fields, and promote market investment to follow up the transformation of industrial structure." "For 2010 years of government investment structure, the Changsha NDRC proposed:" Infrastructure investment accounted for 30%, social development investment accounted for 12%, industrial investment accounted for 58%. "According to the new government voteCapital Guide catalogue, with BYD electric car city and broad residential environment-friendly standardized housing project as the representative, a group of new energy, Low-carbon concept of industrial projects, following the "Tiegangki", became Changsha government investment "new darling".　　Not only can these industrial projects be promoted by government investment support, but they can also benefit from land use, taxes and government subsidy funds.　　"Tiegangki" as the central city, Changsha government investment structural fine-tuning, and macro-control is closely related to the strict.　　2009, under the impetus of 4 trillion yuan investment stimulation plan, the Changsha investment reaches the historical high level: the whole year completes the fixed assets investment 244.1 billion yuan, the year-on-year growth 30.3%. In 2010, Changsha government investment continued to run high.　　Subway projects, crossing channels, Xiangjiang Changsha integrated hub, greenhouse modification project, such as a group of investment up to billions of yuan or even tens of billions of important infrastructure projects have started.　　Swarmed Government investment projects, the local financial resources constitute a huge test.　　Changsha at the beginning of the 2010 draft of the National Economic and Social Development plan, it has been vaguely felt that "continue to maintain high investment growth is facing greater pressure." With this in mind, the Changsha NDRC recommended that the total fixed asset investment in 2010 be guaranteed to be 293 billion yuan, 20% per cent, and 305 billion yuan for 25%.　　The growth forecast for this investment has been cut by 5%-10% per cent from last year's 30.3% growth.　　The slowdown in government investment is not just on the forecast level. The latest data from the Hunan Provincial development and Reform Commission showed that 2010 1 ~ May, Hunan province's state-owned investment (including government investment) grew by 13.8%, well below the 2009 period of 41.6%; Hunan Province plans to ensure the investment of about 940 billion yuan　　But the first 5 months actually completed investment of 265.3 billion yuan, less than one-third of the plan. It is understood that the investment-driven economic characteristics of Hunan province is obvious. In the "troika" of investment, exports and consumption in 2009, investment contributed the most to local GDP, close to 70% per cent. The dominant government investment in 2009 grew at 4th place in the country. From the angle of the policy, Hunan Province 2010 National Economic and Social development plan, put forward, "to maintain investment sustained faster growth." The current good economic development momentum depends mainly on investment support, in the future longer period, still want to expand investment as must stick to the important measures.　　"But for now, the speed advantage and the policy determination have faced real challenges." Take Changsha as an example.　　2010, Changsha to ensure that the government investment of 41 billion yuan, and according to budget arrangements, if the city's local revenue can achieve a smooth 13% growth, can complete 45.881 billion yuan revenue. But local financial growth faces a lot of uncertainty. Changsha NDRC in the "2010 National Economic and Social development plan" Blunt four challenges: first, the state to expand investment policy effect weakened, in 2009-year high cardinality, it is more difficult for the country to enlarge the investment greatly, the second is Changsha the large industrial projects are few, the industrial sustained and rapid growth lacks the long-term support; third, the private investment confidence performance is insufficient, the real estate, the industrial investment growth rate falls bigger than last year, the investment high growth is difficult to sustain;　　The proportion of non-tax income is large, and the foundation of financial income is not firm. Hunan Provincial development and Reform Commission, an official said that Hunan is not a slowdown in government investment cases, currently on a nationwide basis, there are signs of investment ebb.　　He offered to reporters a group of official data: January-May, although the country's urban fixed assets investment growth of 25.6%, but the month of the new project 32,894, the year-on-year decrease of 4,564. In his view, the low ebb of government investment is mainly affected by the regulation policy: "First, the state clearly controls the new projects, increases the audit of the allocation of project funds; second, the tightening of the real estate policy." Due to the constraints of land, capital and approval, the scale of new projects in Hunan Province has become smaller.　　Taking the major investment projects as an example, the total scale of the major projects under construction in the province is about 1.56 trillion yuan, but the average scale of the individual projects is only 171 million yuan. In January-April, under the newly-started project, billion of the following projects accounted for 32%. From the perspective of Changsha, the slowdown in real estate investment, as early as the beginning of the "most stringent regulation" has not yet appeared before the introduction: The city's 149 planned construction area of 300,000 square meters above the project, 70.3 million square meters did not start, accounting for the total of 75%; In addition, developers cautious wait and see, the willingness to purchase land　　The land market is badly depressed. With the rise of private investment in the slow ebb of government investment, private investment has a good growth momentum.　　Hunan Provincial development and Reform Commission, the latest data show that 2010 years ago 5 months, the country's non-state investment growth of 35%, higher than the state-owned investment of 21.2%.　　In infrastructure, people's livelihood projects and major industrial projects, private investment began to Jianfengchazhen, followed up gradually. A typical example is water works. Hunan Provincial development and Reform Commission officials said that several cities in Hunan province in recent years, water diversion, supply as the cause of livelihood to grasp, very early on social capital Open. "A waterworks project, government investment, subsidy 300 to 5 million yuan, enterprises to bot (construction-operation-transfer) of the way involved, through direct financing and bank loans, etc., can enlarge the investment scale to more than 100 million yuan." In the real estate sector, the impact of government investment on private capital is most obvious.　　According to officials from Hunan Provincial development and Reform Commission, the current local government investment structure, infrastructure, industry, real estate and other "three-point world", while in private investment, real estate investment in fixed assets of the whole society at 21.3%. Even in the name of "public welfare" to the people's livelihood in the field of government investment, but also to a certain extent, to stimulate investment, expand domestic demand, such as for urban housing-poor families to provide monetization housing subsidies.2009, Changsha Cumulative for the city 20,400 households issued more than 1.6 billion yuan of affordable housing monetary subsidy (to 80,000 yuan per household), all for the financial direct investment, this is still rare in the country. In this regard, the Changsha government has its own consideration. A local government official in the internal meeting to the departments to do ideological mobilization, said: "Do not care about this money, it will become a home purchase first payment plus a bank mortgage to come back." The background is that Changsha housing demand has been depressed for years, and prices are the lowest in the national capital cities.　　80,000 yuan per household monetary subsidy scheme, not only can stimulate the purchase of housing consumption, but also to stimulate building materials, decoration and other related industries. Such "money-making" would, after all, put pressure on local finances.　　"Finance and Economics national weekly" reporter learned that Changsha 2010 will be the housing subsidy to make the scale of control, plans to solve 10,000 families of affordable housing and 7000 low-cost rental families home subsidies. But the government invests more the value orientation, also is to pry the social capital to the industry investment.　　such as Changsha BYD New Energy Automobile City project, the local government spent billions of dollars in infrastructure construction funds and near zero land price concessions, and even promised to provide 300 million yuan industrial Development fund support, in exchange for BYD's commitment to "3 billion yuan investment" and "30 billion yuan annual output value." What will be the effect of "government-led + private investment"? Hunan Environmental Protection Science and Technology Park, director of the Construction Bureau of the Tao is still unknown, he is still waiting for superior to the development zone "expansion, upgrade" application of the reply. Tao told Caijing National Weekly reporter, the expansion of regional upgrading can be approved, "mainly to see whether BYD's capacity to meet the country's requirements."　　"The regulation of government investment in the process of government investment to industry, some of the worries began to emerge." Changsha An official said he had recently been concerned that industry experts were beginning to worry that the domestic auto industry would likely face overcapacity in the next few years.　　Public data show that 2009 China's car sales reached 13.6448 million vehicles, more than 2009 years in the United States 10.43 million annual sales.　　Caijing National Weekly has also reported that Xu Changming, director of resource development at the National Information Center, predicts that China's car sales will continue to grow by 20% in 2010 and will sell more than 15 million vehicles to become the global champion market for auto sales. "In this situation, will vigorously support the auto industry, whether to create a new round of overcapacity?"　　The official was slightly puzzled.　　Another concern is whether, with the help of government investment, the "expansion" of the new development zone will be out of control. A few years ago, the area set off the development zone geothermal was on the verge of losing control, the central government promptly issued a stop policy. But since the financial crisis, the 4 trillion yuan investment plan, the regional revitalization and industrial planning has been encouraged in disguise. April 2010, the National Development and Reform Commission issued a dispatch, the Provincial Park expansion of the area of approval to open up, to the conditional expansion of the area to support.　　This virtually ignited the expansion of the regional development of passion. In this respect, the country issued"Under the leadership of government investment, a new round of development zone geothermal has been formed," said Zhang Hanya, a researcher at the Commission's Investment Institute and vice President of the China Investment Association.　　Zhang Hanya that the recent listing of the "Liang Jiang New district" in Chongqing is a landmark signal.　　Public data show that, after Shanghai Pudong, Tianjin Binhai, Chongqing "Two Rivers" has become China's third state-level new zone (Deputy provincial), but also the only national-level new zone in China. Since 2009, the State Council has approved the promotion of the Pearl River Delta, the western coast of Fujian Strait, Jiangsu Coastal area, Liaoning Coastal 5.1 line area, Guanzhong-Tianshui area, the central region, the Qin area, TRADP, Huanghe Delta Economic Zone, Poyang Lake Ecological Zone 10 Regional development plans, The number of approvals exceeds the sum of the past 4 years.　　In addition, also approved the Shenzhen comprehensive reform package, promulgated the promotion of Shanghai to build an international financial center and Shipping Center policy advice. Zhang Hanya recently wrote an analysis, from the macroeconomic fundamentals, the "troika" to promote economic development has shown a rapid growth momentum, including the most obvious investment-"last year, the economic growth of 8.2%, this year is still the main driving force for sustained and rapid economic development."　　"What worries Zhang Hanya is that if local government investment" is too hasty ", it will generate new chaos, and" default on bank loans "may become a focus of government investment in the second half of the year. This coincides with the current policy winds in the region.　　Hunan Province is currently considering the introduction of local "Government investment project Management Regulations", the bill has been reported to the Hunan Provincial Legal office. A local official told Caijing National weekly "Government Investment project management regulation" will focus on solving three problems: first, to define the scope of access to government investment, the second is to deal with the relationship between scientific decision-making and democratic decision-making, standardize management procedures; The third is to be dispersed in various functional departments of the government investment projects "centralized management", "　　Concentrate on doing big things. " At present, there are some local cities before the national level has formulated the "Government Investment management measures." In the State Council's May 7 issue of the State Council on encouraging and guiding the healthy development of private investment in a number of views ("new 36"), the scope of government investment is also defined: "Government investment is mainly used in the relationship between national security, the market can not allocate resources effectively economic and social fields." Private capital should be encouraged and supported in the areas of infrastructure, municipal engineering and other public services that can be operated in a market-based mode.　　But the specialized document which regulates the government investment management has not been promulgated yet.　　The above-mentioned officials of the Hunan Provincial development and Reform Commission believe that standardizing government investment will become a hot issue in China's politics and economics in the second half of 2010. 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