Wu Chaoming: China'S Economy Will Not Be Able To Explore The Bottom Two Times In The Second Half Of The Year

The recent sharp fall in China's stock market is not related to the uncertainty and repeatability in the process of foreign economic recovery, but another important reason is that market investors believe that the Chinese economy will have a two dip in the second half of the year.

The reason why economists hold the bottom for two times is very simple. First, the macro tightening measures, especially the real estate control policies, may be too strong, leading to the depression of the "pillar industries" of the national economy, resulting in a rapid decline in the growth rate of real estate investment; two, the deterioration of the European sovereign debt crisis will lead to a decline in China's export demand, resulting in a double decline in investment demand and export demand, leading to the two economic bottom finding.

The above view is reasonable, otherwise it can not be universally accepted by market investors, nor will the stock market panic.

But in turn, the two bottom theory is somewhat blind and arbitrary.

First, there is no presupposition. What is the criterion for the two bottom finding of China's economy? It is the single quarter GDP growth rate falling to 9%, 8% or below 7%, which is the two bottom. Many researchers have no precondition when discussing the issue.

Two, is the real estate regulation policy really affecting the real economy?

On the two standard of bottom finding.

There is no doubt that due to the low and high impact of GDP growth in 2009, the economic growth rate before and after this year is basically a foregone conclusion. The problem now is that the GDP growth rate will reach a few percent in the fourth quarter.

If it falls to 9% or even 8%, it is unreasonable to say that the two time of the bottom of the economy.

Even if the GDP growth rate is 8% in the fourth quarter, it is estimated that the annual GDP growth rate should be above 9%, much higher than that of the State Council's eight target.

If the single quarter of the four quarter of GDP dropped to 8% or below 7% under the influence of policy regulation and foreign demand factors, it is acceptable to say that the two dip of the economy is possible, but the probability of such a probability is almost absent.

One reason is that real estate investment will not drop substantially this year. Two, we must not underestimate the ability of the government to regulate and control the economy.

First of all, the reasons are: from the perspective of structure, real estate investment can be divided into affordable housing, low rent housing and commercial housing investment.

The focus of this year's regulation and control policy is the price of commercial housing, and affordable housing and low rent housing are the object of this year's policy to encourage and promote, and are included in the local government assessment mechanism.

Of all the construction areas completed in 2009, commercial housing accounted for only 15% of the total area. Other 85% accounted for non residential and non commercial buildings.

Therefore, even if the investment level of commercial housing is decreasing this year, the investment level of affordable housing and low rent housing will make no significant drop in the level of real estate investment.

Moreover, many investors are worried that the real estate prices will drop sharply this year. But as long as we observe the trend of real estate prices at the end of 2008 and early 2009 and the impact of the US real estate price drop on the economy and finance, we can tell where the bottom line of policy control is, and the possibility that the average price of real estate will drop more than 30% is almost absent.

Since the average real estate price in the country will not drop sharply, what reason will there be for real estate investment?

For another reason two, the Chinese government's ability to regulate and control economic growth can not be underestimated.

Historical facts have already told you that the Chinese government's ability to regulate the macro economy is no less than that of the developed countries, especially in this financial crisis.

Based on the uncertainty and repeatability of the economy at home and abroad this year, we should make full use of the flexibility of policies.

There were signs of overheating in the first quarter, followed by some tightening measures.

If the economy in the second half of the year appears to be superimposed with the uncertainty of foreign economy due to the effect of policy control, and if there is a significant decrease, we can make full use of the policy space reserved by tightening measures in the first half of the year to smooth the economic fluctuation.

Some may ask that structural adjustment tasks will reduce economic growth.

In the long run, structural adjustment is aimed at ensuring stable economic growth.

In the short term, the dramatic pain in the structure may affect the speed of economic growth, but the adjustment structure is a long-term task and can not be achieved overnight. Only under the premise of stable economic growth can the structural adjustment be realized smoothly. So in the short term, the conflict between the structure and the insurance growth will not be completely antagonistic, and the growth is not only the economic problem, but also the social stability and stability.

Based on the above analysis, consumer demand will continue to grow steadily and rapidly, investment demand will not drop significantly, exports are obviously better than last year, even exceed expected growth, plus the possibility of increasing policy flexibility in the second half of the year, there is no reason to think that our Congress is now showing a single GDP growth rate below two under 8%.