Li Yang, Vice President Of The Academy Of Social Sciences, May Continue For A Long Time In The Post Crisis Era.

At the macro level

The operation of the economy is just like the physiological mechanism of human beings. Only when it is the weakest, will the fundamental problems be exposed. These problems are both the root causes of the crises that are never seen before, and it is difficult to solve and eliminate them quickly.

Li Yang frankly said, "the old trouble is not eliminated, we cannot say that the crisis has passed."

Li Yang believes that these root causes leading to the crisis have not yet been lifted, mainly in the following aspects.

The first is the alienation of financial development to the real economy.

With a series of financial innovations, finance is gradually enjoying itself from the needs of the development of the real economy.

Two, financial regulation is lagging behind.

All kinds of off balance sheet and off court financial pactions, which are divorced from regulation, have their own reasons for survival and development. They are tailor-made for the needs of customers.

How to meet the needs of the development of the real economy and effective supervision of it remains to be explored.

However, it is worth mentioning that the US financial reform bill has been adopted, which seems to have established a view on strengthening supervision. However, its implementation is still uncertain and uncertain.

However, there is one thing to be sure: with the gradual strengthening of financial regulation in the future, it will have a tightening effect on economic development.

In addition, the weakening of the effectiveness of monetary policy, the distortion of the governance mechanism of the financial industry, and the unreasonable international monetary system are also the biggest factors to check and balance economic development.

Old trouble is not eliminated, new good comes again.

In order to save the crisis, governments have launched a lot of unconventional measures since 2008.

Li Yang pointed out that "the positive role of these measures is to quickly stop the downward trend of the economy, and its negative effect is likely to prolong the process of recovery and weaken the inherent purification effect of the crisis on the economic operation".

First of all, the original distorted economic structure has not been adjusted, and there is a tendency to solidify and deteriorate.

The economic recovery of the rest of the world relies mainly on traditional industries. Powerful national investment has not effectively promoted industrial upgrading.

Secondly, the money and credit of astronomical figures may lead to inflation, especially the inflation of asset prices.

This means that the national economy will undergo a violent "nominal adjustment", as a result of devaluation and inflation.

This obviously interferes with the normal operation of the national economy.

Again, the fiscal deficit has deteriorated seriously, increasing the difficulty of economic adjustment and prolonging the adjustment time.

This means that countries will experience more painful "real adjustments".

That is, countries will increase taxes and reduce expenditure.

This obviously will directly reduce the growth rate of the national economy.

Finally, the hand of policy affects market order, making it difficult for the economy to rely on normal market mechanism.

It remains to be seen whether scientific and technological innovation can generate new paradigms of economic growth.

"From the original point of view, the profound foundation for long-term economic development is a major innovation in science and technology, as well as a comprehensive innovation in industry, technology, market and system."

Li Yang pointed out: "since 1980s, the emergence of the" major innovation activities cluster "based on the information and Internet technology revolution and the emergence of the" new economy "based on this have made the global economy experience an unprecedented period of high growth and low inflation for 15-20 years.

At the beginning of this century, with the collapse of the US internet bubble, the US economy began to decline in March 2001, which marked the beginning of the long cycle.

So what will happen to the next "new economy" by what Internet like factors?

Li Yang believes that the world has basically reached a consensus on this issue. Around this goal, all countries in the world have launched positive discussions, such as low carbon economy, green economy, intelligent earth and so on.

However, whether they can completely change the way of production, life style and even thinking mode like IT technology, and form a new economic paradigm, remains to be seen.

Special attention should still be paid to the development of the real economy.

Li Yang believes that although the US economy has experienced a serious recession after the crisis, it is still the world's strongest manufacturing nation. If the United States wants to improve its own situation in the post crisis era, it will have to find new growth points, and manufacturing seems to be its new growth point.

"Since the mid 90s of last century, the United States is committed to the development of the financial industry. The crisis shows that its financial industry has gone too far," Li Yang pointed out. "There are signs that in order to solve the employment problem, the United States will change the economic mode of relying on the service industry and revitalize its manufacturing industry".

The added value of manufacturing industry in the United States accounts for 25% of the world's manufacturing value-added, and the proportion of GDP in the United States is the same as that of the world.

If the US wants to increase the share of the manufacturing sector, how will it affect the global economic structure?

Li Yang believes that, first of all, this will have a greater impact on Japan and Germany, which also belong to the manufacturing power.

Second, if the US manufacturing industry recovers, the proportion of Global trade in global GDP will be reduced.

This is because the United States itself has internal configuration and internal balance, and the volume of Global trade will decline.

This will obviously have a series of effects on the global economic structure.

The current crisis is still in the process of stabilisation, which only means a phased adjustment.

Professor Li Yang has repeatedly stressed the concept of post crisis. He believes that the subject of "post crisis" is still "crisis".

That is to say, it is still in the process of crisis.

Li Yang said, "the implementation of large doses of relief measures, in fact, set a lower limit for the development direction of the crisis.

The path of further development of the crisis presents a "unilateral market" state.

He predicts that in the next two years, there will be hundreds of financial institutions in the United States.

For Europe, the crisis has further deepened.

The European sovereign debt crisis, represented by the crisis in Portugal, Italy, Ireland, Greece and Spain, has not only aggravated the difficulties of European economic recovery, but its further development may pose challenges to the development of the European Union and the survival of the euro, and may drag down the recovery process of the entire developing country.

For Japan, the weak economic recovery and the continuous political crisis made it impossible for him to return to normal growth path in the short term.

In China and other developing countries, the crisis is manifested by the rapid recovery of the economy to overheating before the crisis, structural distortion, inflationary pressure and asset market bubble.

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The sovereign debt crisis is easing but far from over.

At the beginning of October 2009, the European debt crisis broke out and a series of Domino effects came into being. After the August of May 2, 2010, the related relief mechanisms began to emerge.

Li Yang pointed out that although the bailout preparation was late, it had begun to play a stabilizing role in the market confidence. In July 13th, the Greek government successfully issued the national debt. At the same time, the European Central Bank almost ceased buying European debt. Europe seems to have survived the first wave of sovereign debt crisis.

However, on the same day, rating agencies abruptly downgraded Portugal's sovereign credit, and Spain and the United Kingdom recently faced a threat of a credit rating downgrade, indicating that the risk is still lurking in the European debt market. The sovereign debt crisis has eased but is far from over.

In addition, Li Yang also believes that "the debt crisis originating at the national level is extending to the private sector."

In order to prevent the crisis, Europe must take further measures.

Subsequently, the EU summit adopted the "stress test proposal", claiming that 25 European banks will enter the stress test and will release the test results by the end of July.

"This time, the EU government followed the us to put stress tests on the banking sector.

This move not only implies that the EU banking industry is at present a major risk, but also suggests that the public may have larger bank restructuring activities.

Li Yangru is the expression.

The final result of the stress test showed that only 7 of the 91 European banks tested failed, but in Li Yang's view, this did not relieve the market.

He quoted media reports as saying: "the stress test does not take into account the possibility of a national default and only assesses the loss of government debt pactions, rather than the impairment of the value of long-term treasury bonds."

At the same time, he also quoted Win Thin, Brown Brothers's foreign exchange analyst, said, "the assumptions of stress testing are too loose. In fact, there is little pressure. Stress tests will not eliminate the market's worries about the banking system."

In addition, Li Yang also said that the rescue plan of 750 billion euros, at the same time, also to the global economic recovery shadow.

750 billion the use of funds needs to be linked to the terms of IMF loan, while IMF's loan terms are always harsh. This is no exception.

Li Yang said, "this means that the crisis countries need to receive external assistance, and the Greek government must also commit to strict budget cuts.

This is not only an economic challenge for the EU countries, but also a challenge for political and social management. The recovery process of the crisis countries will be delayed for about five years.

Affected by this, the process of economic recovery in the United States will also be affected.

In fact, the United States has recently acknowledged the trend of its economic slowdown, and the stimulus policy will continue. "

China is still expected to maintain a positive monetary and fiscal policy during the year.

After giving a detailed explanation of the international economic situation, Prof. Li Yang gave an intuitive display of changes in China's economic data in the form of charts, and overall, the downward trend of the domestic situation has emerged. PPT

Especially in July 2010, China's Manufacturing Purchasing Managers Index PMI was 51.2%, 0.9 percentage points lower than June.

The index has dropped for three consecutive months, but is still at the critical point - more than 50%.

It shows that the manufacturing economy is growing at an overall level, but the growth rate is slowing down.

With the assurance of the economic situation at home and abroad, Professor Li Yang looks forward to the possible fiscal and monetary policies during the year.

For monetary policy, he believes that "the credit target of 7 trillion and 500 billion new loans and 18% increase in loans will not be changed this year. The possibility of raising interest rates is very small in the year. The reserve requirement ratio is unlikely to increase, and there is a possibility of a decline; if foreign exchange inflows continue to grow, the issuance of central banks may increase."

For fiscal policy, he believes that "fiscal policy to clean up the financing platform for local governments is crucial to contain the risks of the medium-term fiscal and banking system.

This means that the support for investment projects related to policy stimulus in the past 18 months has declined. In 2011, the proportion of government fiscal deficit to GDP may remain at 2%.

Nominally, the "positive" fiscal policy will remain unchanged, but its real impact may be negative.