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The relevant economic indicators in the first quarter show that China's macroeconomic operation is approaching the bottom or is completing its bottom. The situation of the main indicators in the second quarter is very crucial. We must make preparations for both "good" and "bad" directions. Combining historical experience with rough lines, China's current economic downturn is likely to continue for more than three years; and from the start to the release of macro-expansion policies, it will take five years to prepare.
According to the China Securities Journal’s report on the 20th, the statistical results of China’s first-quarter national economic performance indicators have been announced one after another. It should be said that this is roughly in line with the original expected situation.
First, the effectiveness of expansionary macroeconomic policies is already emerging. From the purchasing managers index, economic prosperity index and entrepreneur confidence index, to electricity consumption, car sales, housing transaction volume, railway traffic, port throughput, and industrial added value, investment, consumption data, all Well, it is conducive to restoring and enhancing confidence; the export situation is still grim, but the monthly decline has been significantly narrowed; credit increases are very high, while prices have been low, inflationary pressures have eased, and deflation is expected to be actively guarded against.
Secondly, from the perspective of GDP of "leading indicators," it is still "more ugly" and is at a relatively low level of about 6.1%, which is obviously different from the annual growth target of around 8%. However, the rate of decline has been reduced as compared to last year's decline from 13% to 6.8% in the fourth quarter. Fiscal revenue can be described as “very uglyâ€, with a cumulative decrease of 8.3% year-on-year from January to March (a year-on-year decrease of 132.9 billion yuan), which is far from the annual growth target of 8%. The specific analysis shows that fiscal revenue is still better than the month-on-month ratio. The reason for the larger cumulative decline is in addition to lower economic growth rates, lower corporate profits, and more policy-based tax cuts (including a significant increase in tax rebates for exports). The reduction in fiscal revenue at current prices and the higher proportion of income carried over from the previous year in the same period of last year. At the same time, it should be pointed out that in the first quarter of this year, there were also factors that led to a significant increase in the domestic consumption tax of 38.5% in the reform of refined oil products and taxes. If the incomparable factors in the first quarter of the previous year and the first quarter of this year are all eliminated, purely due to the reduction factors brought about by the economic downturn, the rough estimate should also be 700-80 billion yuan, highlighting the financial difficulties caused by the economic downturn.
Third, from the perspective of enterprise-level reflections, some large enterprises have improved their situation. The difficulties faced by ordinary enterprises, especially export-oriented enterprises, small and medium-sized enterprises, and private enterprises, have continued, but their expectations have improved.
In short, we can think that China's macroeconomic operation, which has been hit by the external financial crisis and slipped into the doldrums, is approaching the bottom or is completing its bottoming out. If there are no major accidents, when the expansionary policy hedge completes its own downswing inertia, The national economy is expected to shift from "low before" to "after high" this year, that is, after the bottoming out.
Prepare both hands in the second quarter
According to the latest developments in the world economy, the Chinese economy, which is unable to “go it alone†under the condition of high foreign trade dependence, still has “uncertainty†from the outside in the next stage. Although the “uncertainty†has not been as large as before, along with the signs of stabilization in the economic situation of major trading partners such as the United States, the original framework of China’s macroeconomic policies to regulate “camera selection†should not change. The situation of the main indicators in the second quarter of this year is very critical. It needs to be closely followed and observed, and be prepared for both “good†and “bad†directions.
First of all, from the "bad" direction, it is better to think of the next stage of the situation as bad, and the difficulty is bigger. Assuming that the situation in the second quarter is unsatisfactory, it is necessary to initiate a preplan and increase the number of expansionary policies that have been implemented. If necessary, this determination should not be set later than the end of June (at that time the relevant departments should have been able to estimate the general appearance of the main indicators in the second quarter and the first half of the year), otherwise it is too late.
Judging from our own regulatory experience, after implementing the budget adjustment program in 1998 to launch a proactive fiscal policy response to the impact of the Asian financial crisis, in 1999, when the data in the first quarter showed that the investment growth rate was obviously low, it had implemented a policy of expansion for the expansion. The budget adjustment plan raised the scale of the long-term construction of national debt of 500 billion yuan at the beginning of the year to 110 billion yuan. In 2000, when the negative impact of the bursting of the US “new economy†bubble was seen in the second quarter, it was implemented again. The budget adjustment plan for strengthening the expansion has increased the scale of the long-term construction of national debts of 100 billion yuan that was arranged at the beginning of the year to 150 billion yuan. This year, we also need to take preventive measures and do a good job of preserving the policy (of course, the means by which we need to use it is not necessarily a single issue of additional national debt).
Second, considering the “good†direction, if the economic operation in the second quarter shows that it can smoothly transition from “low†to “highâ€, it is no longer necessary to initiate a plan for an expansion of the expansion policy. It is therefore necessary to consider starting up without losing the opportunity. The reform plan to adjust resource tax burdens upward will implement the mid- to long-term transformation of development methods, promote structural upgrading, and increase the quality of growth. The necessity and long-term positive effects of the resource tax reform have been known to all parties. It is unnecessary to go into details here, but in terms of operations, efforts should be made to carefully design their efforts. (The tax burden should be increased so that most enterprises can continue to develop through hard work. With only a few companies being reorganized or eliminated in the “survival of the fittest,†it seems that it is necessary to wait for all parties (from the decision-making level, management departments, and the business community) to eat the economy after the rebound in order to “fixâ€. Timing conditions. If such conditions occur in the second quarter or later, they should take the initiative to seize the opportunity to advance the reform of the resource tax.
This round of downturn continues for more than 3 years
Judging from the global economic recession triggered by the subprime mortgage crisis in the United States, even if China's economy smoothly moves from “low before†to “post-high†this year, it does not mean that it will immediately re-enter a high stage.
Since the early 1990s, the period of economic upheaval and downturn has continued for five years (such as the high in 1992-1997, the downturn in 1998-2003, and the high in 2003-2008, and now it is in the doldrums); From the perspective of the interaction between China and other major trading partner countries since China’s reform and opening up, the curve of economic trends between China and the United States since the late 1980s is highly consistent. In terms of phase transitions, China lags behind the United States by six months to one year. Therefore, the downturn in the U.S. economy may continue for more than three years.
Combining these two "experiences" to make bold predictions, the time span for this phase of relative sluggishness in China will probably continue for more than three years, while the macroeconomic expansion policy of our country will be ready for five years before and after it starts and fades out.
Last week, a series of statistics on the national economic performance indicators in the first quarter of China were announced one after another. Since this day, this column has launched a series of articles entitled "I look at China's economic quarterly report", inviting domestic experts and scholars to talk about their views.
The author believes that the relevant economic indicators in the first quarter show that China's macroeconomic operation is approaching the bottom or is completing its bottom. The situation of the main indicators in the second quarter is very crucial. We must make preparations for both "good" and "bad" directions. Combining historical experience with rough lines, China's current economic downturn is likely to continue for more than three years; and from the start to the release of macro-expansion policies, it will take five years to prepare.