The triple pressure of China's economy under the European and American debt crisis

Abstract China's economy may have six surpasses this year: the first is that the annual economic growth exceeds expectations, the economic growth rate is above 9%; the second is that the inflation rate will definitely exceed the government's target; the third is to raise interest rates, and there will be before the end of this year. Once; the fourth is the appreciation of the renminbi over 5%; the fifth is...

This year China's economy may have six surpasses: the first is that the annual economic growth exceeds expectations, the economic growth rate is above 9%; the second is that the inflation rate will definitely exceed the government's target; the third is to raise interest rates, and there will be another one before the end of this year. The fourth is the appreciation of the renminbi over 5%; the fifth is the pressure on the fiscal deficit, the local financing platform and the housing problem is actually a financial problem; the sixth is the housing price, this year can see the turning point of housing prices, this is also to exceed Market expectations.

Six transcendences of the Chinese economy

At present, the capital market faces three pressures: First, to what extent will the crisis in Europe and the United States evolve? Will the European and American economies see a double dip? Will the euro zone disintegrate? The second is that inflation is still high, and the National Development and Reform Commission very rarely admits that this year's goal will not be achieved. What will happen in the future? If inflation does not go down and liquidity is already tight, will it continue to tighten? This is the second pressure on the capital market. Third, is there a problem with the local financing platform? Real estate bubble problem?

Everyone is worried about the debt problem of the United States. The S&P downgraded the US sovereign credit, but the market reflected that the US dollar strengthened on the second day, and the US Treasury bond price rose. The US issue is not a national debt but a political struggle between the two parties. It is a question of leadership. The US fiscal deficit has risen sharply. One is not allowed to increase taxes. The other is not allowed to cut expenses. The only thing that can be done is to print money through the Federal Reserve. In fact, the Fed has given a signal. The August meeting is already talking about the basis and means of the third round of quantitative easing. In September, the United States is likely to continue to do quantitative easing. The continued depreciation of the US dollar and the continued rise in commodity prices are inevitable. It will also aggravate China’s concerns about the security of US assets held.

Inflation is the biggest problem

The biggest problem in China this year is inflation, which is even worse than this round in 2008. Because of the large amount of currency oversupply in 2009 and 2010, plus our energy saving and emission reduction, these three aspects are this round of inflation. The most essential driving force. On this basis, there are a series of factors such as imported inflation, QE2 of the US dollar, and then the rise of agricultural prices. Therefore, inflation is indeed the biggest problem this year.

The tight monetary policy is a problem for policy makers. If you don't see the turning point of inflation, you don't see the turning point of house prices. It is impossible to relax the policy. The local financing platform involves a reform of China's fiscal system. At present, one of the biggest contradictions is that local governments lack money. Banks have begun to clean up the loan problems of local financing platforms in the past two years, which has put a lot of pressure on local governments.

However, at the same time, we have seen that the construction of affordable housing, which has great support for the economy this year and next year, has a great downward pressure on housing prices. It is precisely the need for financing and the local government to pay. To resolve this contradiction, there is no way according to the existing system. On the one hand, banks must reduce their loans to the government. On the one hand, local governments have to raise funds to protect housing. This is a pressure and an opportunity, including the securitization of bank assets. The problem is to the point where it must be done. Compared with 2007 and 2008, when the global oil price reached 147 US dollars, it was very stressful for us. In this round, because the economy of Europe and the United States is not good, the oil price will not exceed 120 US dollars. If the US QE3 is launched, global commodities It may rise again, this is the biggest uncertainty in the future.

At the end of this year, if you see the turning point of inflation, see the turning point of housing prices, and then see that the momentum of a steady economic downturn has been established, especially if exports will be greatly affected, the policy adjustment at the end of this year will create good conditions for early next year. . Therefore, I feel that the triple pressure is actually a triple driving force to promote our more robust reforms.

Free exchange in RMB

Resolve the dollar

Finally, the issue of RMB convertibility is actually a fundamental solution to the problem of the US dollar. According to China's current system, not only does it have 3.2 trillion US dollars of foreign exchange reserves every year, but it is also at a rate of 200 billion US dollars every quarter. Increase, capital control, non-circulation of the renminbi outside the country, exchange rate system, and no market interest rate, these four aspects constrain the development of our financial industry, and also one of the most important reasons why we must continue to accumulate US debt.

The final goal of the renminbi must be the international reserve currency. In fact, the renminbi is already a convertible currency in Hong Kong, and the demand for renminbi overseas is very strong. In this case, it is actually a good opportunity to promote the reform of the international reserve currency system. By 2015, it may be possible. Seeing that the RMB is basically convertible and then becoming a reserve currency, this road will not be too long.  

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