See bottom quick rebound slow "Bao eight" still hope

The author believes that China's economy has reached the bottom, but the natural growth momentum is still very weak, the overall possibility of an L-shaped growth trend, that is, "see bottom fast, pick up slow." With the pace of new capital formation and real estate investment likely to rebound, the three quarter GDP growth rate will be significantly accelerated, "Paul VIII" there is hope.　　However, long-term potential growth could fall to 6% to 7% if the new growth drive cannot be nurtured through "restructuring and reform" over the past two years. -Tente since April, as China's macroeconomic bottoming has become a consensus, many people are starting to have overly optimistic expectations about the economy, and some are starting to worry about so-called inflation and calling for monetary policy to turn. We believe that China's economic trend in a long period of time will be "L" shape, that is, "see bottom fast, recovery slow."　　Although the latest indicators have stabilised, the power of an independent recovery is still weak, and the "L"-shaped tail will have to wait at least three quarters, and it is uncertain whether the "U" shape can evolve. The contribution of investment declined in the 6.1% growth in the first quarter, according to statistics from relevant departments, consumption contributed about 4%, investment contributed about 2%, and net exports contribution was negative 0.2%.　　It is worth further exploring that investment has contributed about 5% per cent growth in the past few years, while fixed asset investment in the first quarter of this year has soared 28.8% in the 2008-year high level of investment, and how the contribution of fixed asset investment to GDP growth has suddenly become only 2%. The key is the relationship between fixed assets investment and new capital formation. In the first quarter of total investment in fixed assets, new projects accounted for a large proportion of these new projects in the acquisition of land is not counted into the formation of new capital. A part of the fixed asset investment is the formation of liquidity, before the completion of the project, also do not count into the formation of new capital. More importantly, the industry went to inventory at a very fast rate, with the growth rate of finished products taking only three months, from the end of last November's 25% to 11.7% of this year's February.　　It is the above reasons that in the background of the fixed assets growth of 28.8%, the actual growth rate of total new capital formation is only about 7%. According to the logic above, if the process of inventory is over, new projects enter the construction period, and the speed of capital formation increases, the contribution of investment to GDP will increase rapidly. But we still cannot expect the contribution of investment to GDP to return to 2007 levels.　　The main reason is: although in the financial investment and bank credit support, railway, road, airport and other infrastructure investment rapidly increased, but industrial enterprises expanded reproduction investment growth has fallen sharply, while the real estate industry in the case of rising sales, investment is also falling rapidly. As far as the status of expanded reproduction of industrial enterprises is concerned, not only the short-term impact of inventory size is too large, but also long-term impact of overcapacity. China's last round of economic expansion period of 5 years, the annual large-scale fixed asset investment productTired of great capacity. At present, domestic spare capacity includes not only the backward and low-end capacity that needs to be eliminated, but also the advanced and high-end capacity for export service. In the first quarter, the absolute scale of industrial finished goods still has 1.98 trillion yuan, and the absolute numbers are still high.　　Under the influence of overcapacity and total inventory size, the growth of manufacturing investment in the first quarter fell by 4.6% Year-on-year, and the trend of decreasing growth in the future will continue. From the real estate sector, the short-lived sales data rebound has not stimulated the industry's investment enthusiasm. January-April, the National commercial housing sales area of 176.25 million square meters, an increase of 17.5%, but real estate investment is still depressed: first quarter real estate investment growth of 8%, down 26.7%, lower than the social fixed asset investment growth of 20.8%.　　In addition, the construction area, housing new start area, the completion of the area of housing, real estate enterprises and land acquisition area Although the chain stability, but a significant decline in year-on-year. In short, from the role of investment in economic growth, on the one hand, financial investment and credit support has led to the acceleration of infrastructure capital formation, on the other hand, the expansion of enterprises and real estate investment continued to slump, even if real estate investment can be gradually active in the three quarter,　　The growth of new capital in the whole society is likely to return to a relatively high level at the earliest three quarters. Consumption growth is still low in the first quarter after the rapid inventory, if domestic and foreign consumer demand to maintain the level of the first quarter, industrial enterprises should be at full throttle production. However, the April electricity consumption is not increased, the industrial value continued to maintain a low level of 7.3%, the CPI fell 1.5%,ppi year-on-year decline of 6.6%, indicating that domestic and foreign consumption demand growth has not improved, but has declined.　　In particular, the latest figures for CPI and PPI suggest that the decline in industrial production is not enough, and that domestic deflation and inadequate demand are still grim. In fact, even the growth of 14.8% per cent of domestic social merchandise sales has largely benefited from the effects of consumer subsidies. The latest social merchandise retail total statistics results show that April, furniture class growth of 22.8%, car growth 18.5%, building and decorating materials category growth 10.8%--These three biggest increase in the category is with home appliances to the countryside, the car to the countryside, real estate stimulus policy.　　Assuming there is no such policy, the natural rate of domestic consumption will be significantly lower than the 14.8% level. In terms of the current consumption decision model of Chinese residents, whether for urban residents within social security coverage, or for the vast majority of rural residents outside the social security system, there is a strong reliance on property income, such as savings, real estate, and securities, which has entered the era of "saving old age": Low deposit rates, The consumption of Chinese residents is unlikely to grow rapidly against the backdrop of a decline in savings income. In view of the change of the disposable income of the residents, although the current disposable income still maintains a high level of growth, the employmentExpectations of poorer and more general pay cuts are expected to reduce consumption growth in the current income of Chinese residents. Under such background, with the decrease of the effect of the consumption subsidy policy, the consumption growth rate determined by the economy's own power can not expect the big change.　　After a certain period of decline in national income growth, consumption growth will remain at a lower level, even do not rule out the possibility of a phased retreat.　　The need to nurture new growth drivers if the external economy recovers as a driving force for an economic recovery, it must not be expected. In terms of foreign circumstances, although U.S. financial markets have stabilized, unemployment remains stubbornly high and commodity retail sales are still falling.　　Japan's economy is heavily dependent on exports, manufacturing boom index hit the country's historic lows, its recovery is sure after the United States, the recovery of the European economy more slowly, the global economic recovery until at least 2010, China's import and export trade is unlikely to rebound quickly.　　In this context, China's exports in March 2009 to 90.17 billion U.S. dollars, April increased by nearly 1.8 billion U.S. dollars, down 22.6% year-on-year, the chain growth of only 2%, indicating that the export situation is still grim. At the same time, the power of domestic economic recovery is also weak, excluding the human factors such as fiscal investment, credit expansion and consumer subsidies. If credit growth remains at the same level as last year, M1 and M2 may still linger at historic lows and fixed-asset investment will not rise to 30%, with electricity, PMI, investment and consumption all a different picture.　　In fact, without a series of robust measures to increase growth, China's GDP growth rate may even be below 4% in the first quarter. Although in the long run, China's economic growth momentum is still very strong, but the economic growth of endogenous autonomy is indeed part of the weakening of the signs.　　These weakened growth forces include: the slowing of urbanization process and the attenuation of demographic dividend, the narrowing of the space for institutional reform dividend, the diminishing of land dividend, the restriction of consumption by the system of social security and income distribution, the restriction of innovation ability on enterprise's independent investment, and the bottleneck of resource cost. Looking to the future, we believe that, despite the bottom of China's economy, the economy's own natural growth momentum is still very weak. With the pace of new capital formation and real estate investment likely to rebound, China's GDP growth rate will increase significantly in the three quarter, the two-year "eight" there is hope.　　But if you can't do that in two years, promote reform "to nurture new growth momentum, then two years later when the massive financial capital of the infrastructure investment released, when the high credit growth gradually fell, when the subsidy effect began to decline, China's long-term potential growth rate will fall back to 6%-7% level. Finance Commentary Financial Commentary