China's Economy Can Not Be Viewed Benevolence

- May 16, 2016-

Recently, in April the central bank announced financial statistics caused widespread concern: new RMB loans 555.6 billion yuan, social financing scale in increments of 751 billion yuan, two-year data, the chain decreased significantly. While the central bank responsible person then has been described, but the market all kinds of speculation about monetary policy is still continued. Experts point out that short-term fluctuations in the overly sensitive individual data and interpretation, is a manifestation of economic transition period 'anxiety. To see that China's deepening reform and economic restructuring is a "long time to work" process, only Dialectically current achievements and challenges in order to properly understand the data and policies, and then grasp the general trend of China's economy.

Situation: There is a problem with the results
Idiom "elephant" story we are all familiar. Compared to the elephant, complex economic situation is often easier to generalize, but misjudged the economic situation will be affected in some way social expectations and policy development, is not conducive to fundamentally stabilize the economy take a good .
Niu Li State Information Center's economic forecasting department Macroeconomic Research Office, in an interview with this reporter said that at present China's economy is at a critical period of transformation and upgrading, the contrarian achieved good results, while still facing a lot of deep-seated institutional mechanisms contradictions and structural problems.
"This year China's economy in many physical indicators of consumption, prices of industrial goods, investment in fixed assets have appeared to stabilize and even rebound, which in the current global economic situation is hard-won. At the same time, there is the economic downward trend slowed down does not mean there is no problem, for example, three or four lines of urban real estate inventory is still high, rising labor costs, the trend did not significantly alleviate the camp changed to increase the force and other New Deal also take some time, and so on. "Niu Li said.

In fact, China's economic "achievements" and "problems" exist in many data are reflected. In the latest data on the 14th for example, on the one hand, in April total retail sales of social consumer goods grew 10.1%, higher than the growth rate 0.1 percentage points over the same period last year, and still maintained a double-digit growth, reflecting China's consumption power strong; on the other hand, in January - April private investment growth rate down 0.5 percentage points than the first quarter, it indicates that the current market demand remains weak, inadequate business investment willingness, market access restrictions needs to be further reduced.
Policy: strong stimulation useless
It is worth noting that the "elephant" thinking if used in the analysis may reflect policy "direction" of the individual data, causing more read too much, thereby affecting market confidence and expectations.
April RMB loans increased less is the latest case. The central bank responsible person at the time to analyze the reasons clear: First, the stock of debt of local government to speed up the replacement of a large impact. In fact, in April replaced LGP loans of not less than 350 billion yuan, and last year in April there was no replacement loan. The stock of loans to local government bonds is replaced with the corresponding offset the incremental loans, but not actually reduce the size of the financing. Secondly, a quarter of bank reserves tend to consume a lot of projects, but also easy to make the loan in April to become Satsuki traditionally. In addition, risk control and pressure to write off bad loans also have some impact.The official stressed that the next phase of the central bank will continue to implement a prudent monetary policy, maintain a flexible and appropriate, timely pre-tune fine-tuning to enhance the relevance and effectiveness, good management of aggregate demand and supply-side structural reforms to adapt, to create a suitable monetary and financial environment, and promote stable economic growth.
Experts remind that, in the analysis of China's economic transition period, we can not because there is a time to the good economic data is considered "normal", nor should see some deterioration of data to conclude that the Chinese economy "to die" but to recognize situation clear, objective, comprehensive, Dialectically.
"In fact, 'moderate expansion in aggregate demand at the same time, focus on strengthening the supply-side structural reforms' is already clear central policy tone. This means that we neither engage in so-called 'strong stimulation', will moderately increase the demand end management for the entire economic transformation and upgrading to create the necessary environment. "Niu Li said, if we can understand the institutional mechanisms for reform and economic transformation and upgrading is a systematic project, and the external environment facing China is different from the 2008 global financial crisis, It would not have been "strong stimulus" disenchanted.
Trend: rainbow after the storm

Reform of the release of a powerful driving force transformation and upgrading do not rely on strong stimulation. Compared with the traditional economic statistics in the aggregate indicators, some structural changes tend to be more able to explain the characteristics and trends of the transition period.
According to the National Bureau of Industry Division Senior Statistician Jiang Yuan introduction, China's economic restructuring continues to make positive progress in the current, high-tech manufacturing growth has accelerated, supporting industrial transformation and upgrading of the high-end segment of the industry is still rapid growth, partly in line with the consumer to upgrade new product direction rapidly. For example, in April, China's pharmaceutical manufacturing industry increased 10.7%, aviation, spacecraft and equipment manufacturing grew 28.6%, 16.5% growth in industrial robots, optoelectronics 16.3% .
Microscopic point of view, more and more new body also is growing as Chinese economy "rainbow after the storm." For example, Shanghai Baosteel combined with years of experience in waste management, based on the disposal of waste circuit board recycling the remaining substrate depth processing, successfully developed a road enhancer, a listing on gain market acceptance. Again, ants gold dress's "Alipay" by providing convenient financial services for small and micro enterprises and the general public, to achieve rapid growth, which represents the Chinese third-party payment is Citibank called "another banking system", the current covering about 200 countries and regions, more than 22 million overseas users.

"In the future, China's economic transformation focuses on the timely introduction of the specific reform measures and implement the plan, rather than dependent on policy stimulus wanted to see the difficulties. The good news is, in the first quarter of 6.7% economic growth for the whole year laid a good basis, to achieve the desired goals confidence will grow stronger. "Niu Li said.

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