Photo: network XI Jinping China is perfectly placed in long term
“The next 5 years will remain in a period of economic adjustment, especially in economic growth will slow down in the next one to two years. “JPMorgan Chief Economist Zhu Haibin, China on October 28 in the” Thirteen-Five “Outlook seminar said.
This is the Chinese Government first economic five-year plan in a clear downward path, so the market “Thirteen-Five” economic growth target is especially concerned.
Zhu Haibin believes that the ideal situation is not to talk about the digital target, reaffirmed by 2020 GDP doubled, which implied the average growth rate is actually 6.5%. Does not identify the specific benefits of a digital target is that for annual work can provide greater flexibility, formed in practice closer to the actual economic growth targets.
Prior to this, member Huang yiping of the Central Bank’s monetary policy Committee has also referred to a similar view. Yiping Huang pointed out that sound economic growth is stable at present, and if it continues to adhere to the “target” is likely to result in a passive situation. Future should really implement the proposed “regulation” framework to define the limit of growth of inflation, to defining the lower limit of growth in unemployment.
Economic growth in the third quarter, “the 7-” behind some changes worth paying attention to. Manufacturing and services accelerate the differentiation, and fixed asset investment continued to decline, the continuation has become the norm for some time. However, after the market fell in the third quarter, landing the expected answer has not been outside the financial services industry, which includes real estate services, retailing, catering and other services, in the indicator continued to rise in the third quarter.
In this regard, Zhu Haibin forecasting, financial services in the four-quarter decline will be larger than the third quarter, there will be some amendments to certain effects of the four quarters of growth in services. Manufacturing and Services Division is also likely to reverse in the four quarter.
In his view, because, especially in terms of investment in the four quarter fixed asset investment may improve, the key is related to a recent two-month economic policy adjustment and monetary policy on the one hand, and successive interest rate cuts drop, while fiscal months in which significantly more positive.
However, after going through a short period of correction, Zhu Haibin was not optimistic about the economic recovery in the next year or two. He predicted that this year’s economic growth could be 6.9% in 2016 and will continue to drop to 6.6%.
Mainly on the grounds that, first, go to the productivity process continues, not reached a new stage. Reflected in the key areas of industrial surplus, such as cement, glass, steel, shipbuilding, automobile and other industries, despite the drop in production this year with varying degrees of, but basically the oversupply situation change, capacity is expected in the next two years will continue the process.
Second, and related to real estate. Despite the rebound in house prices are nearly half of this year, land sales in September alone from negative to positive, but Zhu Haibin believes that this property is different than past recoveries are expected negative growth in real estate investment next year will be 2%. The reason is that this round of sales and house prices there have been reversed, but oversupply in the real estate market is still obvious, you might need to close to 5 years to clear off the current inventory.
More importantly developer attitude is different. “Although developers welcomed the current prices, but only a small number of developers said would buy again, and then developing new properties for sale. Most real estate developers of a mind to finish this round can go, exiting the real estate market. ”
Third, the policy adjustment is positive the last two or three months, all the monetary and fiscal policy in the near future to steady growth efforts. From the experience of the past few years, largely after the economic short-term recovery, monetary and fiscal policy will go back. If nothing else, will not see the expansionary fiscal policy in the coming years. Effects of fiscal policy on macroeconomic future depends mainly on PPP and quasi-fiscal measures how much. Monetary policy, reducing a larger space, rate cuts are very limited, October this rate cut is very likely to be the round end of the rate cut cycle.
However, Zhu Haibin says, “Thirteen-Five,” released during the reform dividend in four main areas, including land reform, technological innovation and industrial upgrading, market and continues to open up, once a breakthrough is likely to bring some long-term economic growth more obvious dividends.
18 after the session report, including financial reform, fiscal reform and various areas of reform, reform of State-owned enterprises have introduced specific content, but the land reform is not a global deployment, or stay at the 18 session of reports more broadly within the scope of this paper.
5-10 years in the future, a new round of land reform has the potential to be real reform of bonuses, or to drive China’s sustainable economic growth, coupled with economic restructuring.
Zhu Haibin judgment, this round of land reform and the last round of land reforms would have made a big difference. After the last round was 1998 housing reform, after a series of changes of land system in urban areas, including land line hanging system, land, financial support for infrastructure investment and so on, forming a bonus round on land reform.
And a new round of land reform, focuses on rural land circulation system corresponds to the concept of household registration system reform and urbanization in new. How to by way of marketization implement of rural collective land circulation and value, and the resulting cash flows may no longer be used for the Government’s investment, but to improve the social security system, including the farmers how to create jobs, how the provision of basic urban services, is the focus of the next round of land reform.
Corresponding, in new-type urbanization process, will provide employment opportunities in the process of industrialization, transformation is rooted in the city, rural people become human.
Zhu Haibin believes that once the breakthrough progress in the land, and successfully implemented, it could be driving China’s economy a driving force in the next round of economic growth is very strong.
In addition, Zhu Haibin believes that China is unlikely to rely solely on the consumer a horse can drive the growth of the economy as a whole. If you want to maintain a stable growth in manufacturing industry must upgrade. Therefore, structural adjustment and economic restructuring will no doubt be a theme of the next five years.
He pointed out that several years of innovation in terms of new business model than technology innovation much faster and not step on two legs, there is plenty of room for technical innovation. How to implement the “made in China” 2025 “, if there is some specific targets, such as spending on research and development, education, supporting the measures, and in the” Thirteen-Five “during focus.
Zhu Haibin believes that China’s manufacturing advantage still exists. After a technology upgrade from low-end to high-end development process, should recognize that Chinese competitors in the global market from emerging market countries, to middle and high income countries, such as Korea and the euro area, for them, costs or have big advantages in China.