He Zhicheng: Before We Overlook China'S Economy

After the introduction of China's most important macroeconomic data in the first quarter, the central government and the major local governments of the first tier cities promulgated or prepared to introduce a more stringent "real estate new deal", forming a combination of curbing the rapid rise in housing prices.

What was the result?

A month later, we saw that the soaring housing prices did not drop much, but the stock market plummeted nearly 700 points or decreased by more than 20%. In fact, many real estate related stocks fell by nearly 40%, which is worse than the outbreak of the global financial crisis.

What is more troubling is that the market generally expects that the decline in house prices is much less than that in the stock market. Especially in the two or three tier cities, there is no new deal in real estate. Therefore, the government does not exclude the government from expedite the introduction of property tax or disguised property tax. Therefore, the market nerves have been very tense, and the stock market is now dropping 100 points on Monday.

Housing prices haven't fallen as managers want. Of course, if property tax is introduced, even property tax in disguise, housing prices will eventually plummet.

At present, the government is watching, real estate developers wait and see, they have stopped buying land, the purchase of raw materials has also greatly reduced, recently, steel and cement prices have a downward trend.

Due to the fact that the real estate market is getting colder, a lot of construction sites have taken a stalling strategy, trying to extend the construction cycle and postpone the sale of new flats.

I am very worried that the new real estate policy intended to control the partial overheating of the economy may lead to the overall cooling of the economy.

In spite of the continuous rain, the Chinese government is determined to increase the real estate market regulation. Meanwhile, the euro area has experienced a serious debt crisis.

The US stock market staged a "crash" in May 6th, dropping more than 1000 points in an instant, while the euro fell more than 1300 points in a month, or more than 10%.

What is even more puzzling is that the collapse of the euro actually happened after the euro zone and the world's major economies decided to arrange a bailout fund of US $one trillion. Such a rescue effort is hard to keep the euro from falling, indicating that the euro area economy and even the global economy are likely to bottom out for two times, especially the two bottom of the virtual financial market.

The linkage performance of the global virtual financial market tells us that bad profits are coming one after another, and the butterfly effect is very infectious.

With the global market becoming colder, China's economy is hard to get away with. The bad performance of China's economy is more likely to crack down on global investor confidence.

The collapse of the euro also tells us: the recovery of the global economy in the early stage is largely due to the government's injection of great liquidity. When the economy has just turned better, the government is trying to withdraw, or send a clear exit signal, and the market liquidity will soon turn to market confidence is still very fragile.

At such times, I think we should pay great attention to prevent the superposition of bad news and prevent the confusion of policy exit signals. In particular, we should not confuse adjustment and withdrawal, confuse precision strikes with overall suppression, and confuse local overheating with overheating of control.

The reality of the collapse of China's stock market has reminded us that Chinese investors' confidence is very fragile, and the single lung disease of China's economy is too heavy to withstand a hard landing.

It is heartening to note that during Premier Wen Jiabao's inspection in Tianjin last weekend, he said: "we need to strengthen coordination and be appropriate.

We should pay attention to the coordination and coordination of macroeconomic policies, not only to control the overall resultant force, but also to prevent the negative effects of a number of policies.

After seeing the prime minister's speech, I am full of hope for China's economy.

In this case, I would like to point out that when China's stock market is plummeting, we should pay more attention not to overlook empty and short.

We must admit that the biggest problem in China is the real estate market. The most difficult thing is the regulation of the real estate market.

But I want to emphasize that the overheated problem of real estate is not overheated by China's economy as a whole.

I firmly oppose the fact that after watching the Chinese economy, especially after the debt crisis in the euro area, I have repeatedly stressed that this is a rare historical opportunity.

How to solve the problem of China's liquidity and not only focus on housing property, but also choose another way or choose to move, such as speeding up the reform of the RMB exchange rate formation mechanism, letting the RMB go to the world, releasing the liquidity to the whole world, opening the market to private capital, opening the access threshold, especially the financial market, such as the Agricultural Bank shareholding system reform, we can invite private capital to become strategic investors; at the same time, we need to speed up innovation, speed up the absorption and introduction of imitative innovation, and we must quickly pfer the super productive capacity accumulated over the years to the place where new GDP can be generated, so as to avoid the ups and downs of the economy and avoid the ups and downs of the economy.

In any case, there is no reason to overlook China's economy.