Experts: Be Vigilant Against The Economic Imbalance Caused By The High Price Of Real Estate.

Rising housing prices and declining household savings ratio

Enterprises and governments are the main reasons for the high savings rate.

The government should speed up building housing for low-income people.

Changing market price expectations through regulation and control

From an international comparison, China's savings rate has indeed been at a high level internationally.

Therefore, academia and policy makers have basically reached a consensus that reducing domestic savings rates should be regarded as a way to reduce the current account surplus, thereby easing excess liquidity, curbing inflation and asset prices.

But the problem is not so simple.

It is true that China's savings rate has been relatively high, but the Chinese economy did not show any imbalance before 2001. This shows that our savings rate has only risen in recent years.

The statistics also support this view. The savings rate before 2001 has been around 40%, and it has increased to more than 43% after 2001.

But the conclusion seems quite different from that of the ordinary people. From the microscopic perspective, if the savings rate increases, the life of the residents should be more and more relaxed. But in fact, this is obviously not the same as this. Why?

In recent years, the ratio of household savings to domestic savings has been decreasing, but the savings ratio and government savings ratio are rising.

This shows that the reason why China's domestic savings remain high in recent years is not due to the high savings rate of residents, but because of the rapid growth of corporate and government savings.

Therefore, I think that the crux of China's economy is not simply the problem of high total savings rate, but rather closely related to the change of savings structure.

Why has the savings of government and enterprises been rising in recent years and the savings of residents have declined?

What changes have taken place in the economic structure, resulting in the redistribution of wealth among residents, enterprises and governments?

From time to time, the above structural changes occurred after 2001, which coincided with the rapid rise of real estate prices.

In my opinion, this is not only a coincidence in time, but also in logic.

The reform of China's housing system began in 1998 and ended in 2001.

With the completion of housing reform, urban residents need to buy houses in the market, which has greatly changed the consumption behavior of Chinese residents.

Before the housing reform, the expenditure of residents for housing is negligible, but after the housing reform, this expenditure increased rapidly.

Because of the extreme tension of urban residents under the planned economic system in China, after housing reform, the housing demand has been released rapidly for decades. Such demand release and housing prices have intensified each other, making China's real estate prices in the rising trend since 2001.

In the case of no change in the distribution of national income, such a process will inevitably lead to a continuous decline in household savings.

The housing system reform has reduced the production costs of enterprises. Although there are special housing subsidies in the wages (some appear in the name of housing provident fund), in general, the expenditure of employees on housing must be greatly reduced.

In addition, in the process of rising real estate prices, enterprises have gained excess profits by hoarding land and real estate development.

All these increase the savings ratio of enterprises.

The rapid rise in real estate prices has led to a significant increase in government revenue from land leasing and taxation from real estate development.

Therefore, in this process, the proportion of government savings is also rising.

Similarly, driven by the strong recovery of real estate, the prices of all resource commodities have soared. The result is the same as the result of the rise in real estate prices, which has further increased the savings ratio of government and enterprises, while the proportion of household savings has declined.

It can be seen that the housing system reform is the most fundamental reason leading to a major change in the distribution pattern of national income.

The cause of the problem has been found, but the answer to the problem is not simple.

It is unrealistic and meaningless to let the housing system go back to the old road.

This requires us to adjust the income distribution pattern of the whole society in the new environment. This is a complex project.

The author puts forward two suggestions:

First, the government takes more responsibilities in housing and education.

The cost of housing should be reduced or reduced in housing land that involves basic living guarantee for urban residents. The government should also use financial resources to build part of the housing for low-income groups.

Obviously, the government has done something in this respect, and many policies have been promulgated.

What I want to emphasize is that these policies are not short-term contingency plans, but policies that need to be implemented for a long time. They are the necessary policies to solve the internal and external imbalance of China's economy.

Second, through policy regulation to change the real estate market price expectations.

Let the people's expectation of housing prices change from rapid rise to stability, which can delay the investment impulse of the peaceful and real estate market.

Therefore, the author believes that the current policy and measures adopted by the government to improve the housing system and regulate real estate prices are completely correct. They can not only alleviate social contradictions, but also change economic imbalances.