Abstract China's economic operation has entered the "new normal" of medium and high-speed development, and the economic growth rate is also exploring the "bottom" of the new normal. From the perspective of macro data performance, this "bottom" is obvious...
China's economic operation has entered the "new normal" of medium and high-speed development, and the economic growth rate is also exploring the "bottom" of the new normal. From the perspective of macro data performance, this "bottom" has obviously not been found.
Yesterday's official China Manufacturing Purchasing Managers' Index (PMI) and HSBC PMI both fell in November, and they approached the glory line, indicating that the downward pressure on the economy has increased. Many economists interviewed by the Shanghai Stock Exchange said that economic growth will continue to decline next year. In the process of finding the bottom of the economy, in order to avoid economic ups and downs, macroeconomic policies will continue to exert strength. Analysts expect that monetary policy is expected to be further easing, and the space for RRR cuts has been opened, and there may be a RRR cut this month.
Loose policy is expected to increase
A coin has two sides, as does the PMI data.
The front of the coin is a ugly number. According to data released by the National Bureau of Statistics on the 1st, the manufacturing PMI fell to 50.3% in November, the lowest since March this year. On the same day, the HSBC manufacturing PMI in November also hit a new low in six months, and the final value of 50 was unchanged. Initial value, but fell by 0.4 from the end of last month.
“The PMI index continued to fall in November, indicating that economic growth is still in a downward trend.†Zhang Liqun, a macroeconomic researcher at the National Research Center, said that “the economy is still going to bottom out and it is expected that the economic growth rate will be around 7% next yearâ€. However, Zhang Liqun believes that the process of economic correction is expected to end next year.
Unlike Zhang Liqun’s point of view, Lin Caiyi, chief economist of Guotai Junan, and Zhu Jianfang, chief economist of CITIC Securities, believe that “it is yet to be seen whether the economy will bottom out next year.â€
"From the perspective of international experience, each country's growth rate during the economic transition period will drop sharply, and this range will fall by a quarter, and more than 50%." Lin Caiyi said in an interview with the Shanghai Stock Exchange reporter, "According to International experience combined with the current global economic environment, I believe that China's economic growth rate may fall by a third, which means that it may be around 6%."
Li Huiyong, chief macro analyst of Shenyin Wanguo, also pointed out that the "economic bottom" has once again been severely challenged. "From the current situation, due to the lag effect of real estate adjustment, the economy once again showed a downward trend of increasing pressure. Whether demand or supply, whether upstream or downstream, indicates that deflationary pressures have increased."
In the face of downward pressure on the economy, the country is expected to continue to adopt a steady growth policy, and monetary policy is likely to be further relaxed.
Li Huiyong suggested that because the interest rate is still high and the funds are tight, the central bank [microblogging] should decisively reduce interest rates through large-scale interest rate cuts and RRR cuts. "The space for lowering interest rates has been opened."
Lin Caiyi also predicted that in order to resolve the tight liquidity situation, the possibility of RRR cuts this month is very high, with a drop of at least 0.5 percentage points.
Structural adjustment
The opposite side of the coin is a very nice flower, just as the PMI decline may be essentially “de-capacity†in structural adjustment.
At present, the price of bulk commodities is sluggish, and the international oil price has fallen to 66 US dollars per barrel. Under this circumstance, enterprises have the psychology of “buy up and not buy downâ€, and the willingness to stocks has fallen, becoming passive “destockingâ€, which is reflected in PMI. On the index, the inventory index and the new order index fell.
"In the case of price downside expectations, companies are reluctant to buy more, but it does not mean that companies have no demand. Market demand is not as pessimistic as the number shows." Lin Caiyi said.
In fact, if many figures "peel the face and look at the lining", they will find that the economy is really not as pessimistic as it appears.
It can be noted from the statistics of the Bureau of Statistics that since 2011, the growth rate of the service industry has been higher than that of the industry. In 2013, the proportion of the service industry in GDP exceeded that of the industry for the first time, and the trend of increasing the proportion this year continues.
“The service industry is characterized by small output value, and small output value means that it can not bring more increments to GDP, but it can absorb more jobs. This explains why China’s economic growth rate is falling but it will not appear. The situation of massive unemployment." Lin Caiyi said.
From the current point of view, the job market is very stable. The target of 10 million new urban employment this year has been completed ahead of schedule, while the overall labor market is still less than demand. The wage level has been on the rise in the past three years.
The speed of the service industry will increase, and the increase in household income will inevitably lead to the prosperity of the consumer market. Experts expect that consumption will become the "locomotive" for economic growth next year if investment is not strong.
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