Macroeconomic Regulation And Control Should "Feel The Way Across The United States"

On the afternoon of April 16th, the National Bureau of statistics officially released the macroeconomic trend in the first quarter of this year.

Li Xiaochao, a spokesman for the National Bureau of statistics, said that the national economy continued to develop steadily and rapidly in the first quarter, and is expected to develop towards the direction of macroeconomic regulation and control.

At the same time, he acknowledges that there is great uncertainty in the future no matter whether it is economic growth or price situation.

On the morning of the meeting held by the Finance Institute of the Chinese Academy of Social Sciences, Ha Jiming, chief economist of China International Finance Corporation, put forward his own view. In view of the external influence, China's economic trend and policy have great uncertainty.

Ha Jiming believes that the negative impact of the US subprime mortgage crisis on the global economy will be further revealed.

Us real estate prices are expected to decline further until 2009.

Affected by this, China's economic growth in 2008 will be between 9.5% and 10%, and it will further decline in 2009. The worst is probably the 8% target lower than the government's expectation.

"The worst time may not come yet."

Ha Jiming predicts that from an optimistic point of view, China's economy will grow by 10% and 9.5% respectively in 2008 and 2009.

From a pessimistic point of view, the growth rate in 2008 and 2009 will reach 9.5% and 7.5% respectively.

However, this situation did not take into account the premise of the National Bureau of statistics to increase the number of economic growth in 2007 (adjusted growth rate of 11.9% in 2007).

Since the reform and opening up, China's average annual economic growth has been close to 10%. The only exception is the impact of the Asian financial crisis. In 1998, the economic growth rate was only 7.8%, lower than the 8% target expected by the government in that year.

In 2009, China's economy may also have an extreme situation, less than 8% of the government's expected goal, because the impact of the US subprime mortgage crisis may expand.

Ha Jiming pointed out that the impact of the US subprime mortgage crisis on the world economy will last 2 years, which will lead to further decline in housing prices.

According to the financial crisis in the 70 and 80s of last century, the housing price dropped by 50%. At present, the US house price has dropped by only 17%.

The fall in US house prices has already affected consumption and investment in the US.

It also has a negative impact on the global economy, which is more obvious to some emerging countries such as China, mainly reflected in the decrease in US imports and the decline in China's export growth.

In the first quarter of this year, China's exports to the United States increased by only 5.4%, an increase of nearly 15 percentage points from the same period last year, and a rare decrease in China's trade surplus in the first quarter.

Ha Ji Ming pointed out that "the worst time may not yet come."

According to his calculations, each 1 percentage point drop in the US economy will cause China's economy to fall by 1 percentage points, and the profit growth of Enterprises above Designated Size will drop by 10 percentage points.

Therefore, considering that the US economic growth rate was about 2% last year, if China's economy dropped to zero in 2008, China's economic growth rate would be two percentage points lower than that of last year, or about 9%.

In the first quarter of this year, the profits of Enterprises above designated size increased by 16.5% over the same period last year, an increase of 27.3 percentage points year-on-year.

However, Ha Jiming believes that considering Olympic factors, China's actual consumption growth in 2008 will be higher than that in 2007.

In addition, after the snowstorm this year, post disaster reconstruction has accelerated investment and is also conducive to a certain economic growth.

"Tight money, anti inflation, loose finance and inflation"

Ha Jiming pointed out that although there is uncertainty about future judgment, it will also lead to policy uncertainty. But one thing is for sure: inflation pressure is still high.

He suggested that in the face of the inflation situation, fiscal policy should be given subsidies to some low income groups. In terms of monetary policy, the appreciation of the renminbi is also a desirable measure.

Despite the judgement that pork prices will drop in the second half of this year, Ha Jiming research found that the proportion of farmers scattered pig is still very high. Many farmers believe that the state's support for pig raising is still small, and the state needs to introduce a minimum pork purchase price.

According to his judgment, the price of grain will increase further by 10% - 15% this year, and pork prices will probably remain high in June this year. It is expected that the supply of pork will increase at the end of this year.

Therefore, the price situation of agricultural products this year is not optimistic.

The key is that China's prices are quite influenced by imported inflation.

Ha Jiming expects that the depreciation of the US dollar will slow down by the end of this year. It is estimated that the CPI growth in China will still exceed 6% this year, 8.5% in April, which will be higher than that in March.

He believes that the regulation of prices can take the way of "tightening money, preventing inflation, loosing finance and carrying inflation".

In tightening monetary policy, he believes that in view of the increase in foreign trade surplus, as well as the slowdown in credit growth and the US dollar interest rate reduction, "there may be no need to raise interest rates".

However, he opposed the idea of raising wages and lowering inflation.

Because of the rising cost of unit labor, wage increases have further pushed up the inflation situation, resulting in a spiralling rise in prices.

The best way is to subsidize the most affected groups, such as school students, retirees, registered unemployed persons, etc.

"The state's financial resources are available. The key is that such temporary subsidies will not increase prices."

He said.