External Demand Is Declining, Domestic Demand Is Unstable, And Economic Growth Is Increasing.

After March 2006, China's consumption demand has entered an accelerated growth stage.

In the 1~5 months of this year, the growth rate was 21.1%, a real increase of 13% from the price factor, the highest increase since 1997.

But at present, the growth rate of consumption is approaching the peak. It is unlikely that the cyclical factors will affect the growth again.

From the perspective of the law of domestic economic operation, the growth rate of consumption is maintained at around 13%, which can last up to the first half of 2009.

In particular, the two major consumption hotspots of housing and automobiles are facing adjustment. The possibility of adjustment of consumption demand will increase in the second half of this year.

The demand for real estate has entered a period of adjustment.

After two consecutive years of price inflation and demand expansion, this year's real estate demand has entered a period of adjustment.

1~5 months, the national housing sales area dropped 7.2 percentage points, housing prices also began to callback, Shenzhen, Wuhan and some other mega cities housing prices had a significant decline.

Due to a large proportion of investment demand in housing demand in the first two years, the prosperity of the real estate market is driven by speculative factors.

The expectation of house price pullback has forced the original investment demand into the current market supply, and the supply of the new housing market is increasing rapidly. However, some demand was overdrawn in the first two years. The housing market oversupply in the second half of the year will become more serious, and the housing price will probably have a larger pullback.

The reduction of housing prices is conducive to promoting rational return of housing prices and improving housing supply structure. However, under the expected effect of buying up or not buying, housing demand is likely to shrink further.

After years of rapid growth, auto consumption demand began to recede this year. In the first 5 months, the cumulative growth rate of passenger vehicle sales in China continued to fall (followed by 20.53%, 22.52%, 18.53%, 17.43%), and sales volume decreased by 6.6% in May.

After the increase in the price of refined oil, the growth of automobile demand in the second half of the year will further decline.

The real estate industry and automobile related industries are numerous, which are the key industries supporting the rapid growth of consumption and economy.

If there are huge turbulence or contraction in the real estate and automobile market, consumer demand will be callback in the second half of the year.

The stability of economic growth in the second half of this year will face severe challenges under the combined influence of the slowdown in exports and investment and the adjustment of consumer demand.

3. the negative effects of slowing economic growth are beginning to show.

At present, the negative impact of economic slowdown on economic and social development has begun to appear.

First, it is difficult for small and medium-sized enterprises to operate.

Due to the decline of economic growth and the impact of tight monetary policy, many enterprises, especially small and medium-sized enterprises, are very prominent in financing difficulties and shortage of funds, as well as the influence of RMB appreciation and the reduction of external demand. Many export oriented small and medium-sized enterprises, such as textile, clothing and shoes, have ceased to be produced or closed down.

Small and medium-sized enterprises are the main force to absorb social employment and also an important carrier of scientific and technological innovation.

In the current environment of imperfect investment and financing mechanism and excellent social capital preferences, how to solve the financing and development problems of SMEs under the tight monetary policy needs great attention.

The two is the risk of instability caused by "hot money".

Under the stimulus of the unilateral appreciation of the RMB exchange rate and the huge risk free arbitrage opportunities created by the spread of the Sino US interest rate, a large amount of hot money has flowed into our country, hiding in various fields such as deposit, stock market and housing market of our commercial banks and waiting for the opportunity to move. Once the international market is expected to change, it may cause great impact on China's economic operation.

Three is the deep fall of the stock market.

Compared with the highest level at the end of last year, the Shanghai and Shenzhen two cities have fallen by more than 60%.

The stock index is down, on the one hand, the domestic consumption demand growth will be affected by the wealth effect. On the other hand, the financing function of the stock market will decline, which will affect the scale of production and investment of the enterprises and restrain the growth of the total domestic demand as a whole.

Four, the business market is not optimistic.

According to a survey conducted by the central bank entrepreneur survey system, the profitability index and the ability to pay index in the first half of the year are lower than the previous two years.

In May, China's Manufacturing Purchasing Managers' index, production index, new order index, raw material inventory index and supplier delivery time index decreased to varying degrees.

In the second half of this year, economic growth is facing many unfavorable factors, and the possibility of a faster growth rate is very large.

According to historical experience, China's economic operation has the problem of "braking is easy to start hard", and the subsequent cost of deep economic downturn is very costly.

After years of rapid growth, the appropriate slowdown in economic growth is normal and conducive to changing the mode of economic growth. However, it is necessary to prevent the economic growth rate from being too large and its negative impact.

Three, the current macroeconomic policy priorities and some policy recommendations.

In view of the trend of price rise and slowing down in the short term and the possibility of economic growth being too fast, macro policy should be adjusted by camera.

The policy emphasis should be on controlling the price rise within the affordable range, maintaining the sustainability of steady and rapid economic development, and accelerating the pformation of the mode of economic development.

In short, it is "slow inflation, steady growth and promoting pformation".

We should prevent and resolve the new marked price increase factors, guide future inflation expectations, strive to control the consumption price increase by about 7%, stabilize domestic demand, prevent external demand from falling down, keep the annual economic growth rate back to two percentage points, ensure annual growth of not less than 10%, actively promote institutional reform and policy adjustment, and promote the pformation of the mode of economic development.

1., ensure food security, increase the supply of agricultural and sideline products, and stabilize inflation expectations.

As a large population country, agricultural production can not be relaxed at any time or under any circumstances.

Ensuring food security is not only a need to control price rise, but also a fundamental way to reduce the impact of international grain price fluctuations on the domestic market.

In view of the fact that domestic grain prices are substantially lower than the international market prices, the lowest purchase price of the government has also been lower than the domestic market price. In order to protect the enthusiasm of grain production, while continuing to control grain exports, we should appropriately increase grain reserves and raise the minimum grain purchase price.

We should continue to increase the comprehensive agricultural subsidies, grasp the matching of various policies and effects of supporting agriculture, maintain the resumption of growth in the supply of agricultural and sideline products such as pork, and prevent the emergence of new significant price increases.

The soaring price of grain and other primary products in the international market is both a reflection of the long-term trend and a short-term speculative factor. We should correctly understand and respond appropriately to stabilize inflation expectations.

2., stabilize domestic demand, prevent external demand from falling, and avoid excessive contraction of aggregate demand.

We should pay close attention to the trend of investment and consumption demand in the second half of the year, especially the turbulence in the real estate market and the continuous shrinking of auto demand. We should plan ahead in advance to deal with the problem, prevent irrational falls in housing prices, adjust the housing structure, and promote the steady development of the automobile market.

According to the changes in demand at home and abroad, we should increase financial input in a timely and appropriate manner in post disaster reconstruction, affordable housing and major infrastructure projects, so as to give full play to the role of fiscal policy in stabilizing domestic demand.

In order to prevent the external demand from going down, we should adopt various effective measures to alleviate the pressure on the export enterprises at the same time of stabilizing the RMB exchange rate in the second half of the year.

In view of the many contradictions and difficulties encountered by labor-intensive enterprises in their exports, they give support to tax and credit funds.

3. moderately adjust the unilateral appreciation expectation of RMB exchange rate.

The unilateral appreciation of the RMB exchange rate and the risk free arbitrage opportunities arising from the expansion of the US China interest rate are the main reasons for the rapid influx of hot money and the rapid growth of China's foreign exchange reserves.

The rapid appreciation of RMB and the large increase in foreign exchange reserves not only increase the difficulty of monetary policy operation, but also unreasonably inhibit the international competitiveness of export industries.

In order to curb the massive inflow of "hot money", reduce the risk of domestic financial crisis caused by future international capital flight, and stabilize exports at the same time, avoid excessive decline, we should take appropriate measures to stabilize the RMB exchange rate and adjust the trend of continued unilateral appreciation of the US dollar.

4. improving SME business environment

The control method of credit scale has led to tight credit funds and distortion of capital market, resulting in over tightening effect on cash abortion of SMEs, especially externally oriented.