The Downward Trend Of The Economy Is Obviously &Nbsp; Will China'S Economy Return To Growth?

The economy seems to be at the crossroads.

These signs indicate that China's economy is slowing down and the downward trend of macro-economy in the second half of this year is obvious.

The GDP growth rate of 8% to 9% is still a high growth rate, but for the Chinese economy accustomed to double-digit growth, some people seem to be unable to adapt once the GDP growth rate falls to a single digit.

Recently, concerns about China's economic slowdown and the call for policy easing are emerging.

But if we want to relax regulation again in order to maintain growth, then the real estate bubble will rebound rapidly and the investment tide will return to the 40% high growth rate overheated interval. Soon, I am afraid we have to change the tone of policy.

Over the past five years, we have been constantly switching between "ensuring growth" and "fighting inflation".

China in early summer May

In fact, since last May's European debt crisis to the end of September, the policy of real tightening has entered a "silent period" because of worries about the two "bottom finding" of the economy.

Now, as economic growth slows down, the intensity and frequency of macroeconomic regulation and control is facing a stage of "re discussion".

Many analysts also believe that it is difficult for China to accept the slowdown in economic growth.

Originally, fiscal and monetary policies were constantly out of the loop, and the main purpose of administrative control was to control the overheated economy and curb inflation.

However, once the GDP decline and a slight slow growth of CPI, the warning of the recession and deflation of the future China's economy has ceased to be continued. It is difficult for the future half a year, and the macroeconomic policy needs to be reversed. If so, the cycle of China's economy is really short, and will not break in the strange cycle of "tightening up and relaxing".

Over the past more than 10 years, China has relied on real estate bubble boom and government investment frenzy to maintain long-term economic growth, to a certain extent, ensuring the stability of employment market and upgrading of infrastructure.

But today, this model has entered a "dead end".

Even if the economic growth rate slows down in the next two years, the main reason must be the virtual fire of the real estate, which is the intrinsic need of the "soft landing" of the housing bubble.

Is this economic downturn the hope of every year?

In fact, the monetary expansion has come to an end and is now back to normal.

Although this process seems very slow.

In 2009 and 2010, China released 17 trillion new loans, which doubled the base money, which was followed by China's CPI "5%".

Therefore, in order to control inflation, the monetary authority can not allow the currency to expand and continue for several years.

If the basic currency M2 really expanded to 100 trillion yuan, and the ratio of M2 and GDP jumped over 200% of the total, then China's currency crisis is imminent, asset bubbles and inflation out of control will be more difficult to clean up.

In order to achieve long-term economic stability in China, it is necessary to complete the economic pformation and reduce the growth rate of basic currencies.

Today, the M2 growth rate of basic currencies has dropped to below 16%. Compared with the growth rate of 20% in the past two years, the monetary environment has returned to normal and has seen hope. And this growth rate still has the possibility of further decline. Returning to around 10% is the health sector's need for China's economy. Over the past two years, there has been no need to overemphasize the harm of over injection of money morphine.

After experiencing the baptism of two years after the financial crisis, I believe that the Chinese economy once again worries about the decline of GDP and has little chance of returning to the "growth guarantee".

Because the decision-making level has basically realized that such a "toss up" is not a good thing for the Chinese economy.

And giving up the real estate bubble boom and getting rid of over reliance on investment are increasingly becoming a consensus.

The key to the problem is whether China's economy can find new growth momentum after the real estate bubble engine stalls and the monetary environment returns to normal.

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The answer is yes, and the full stimulation of internal consumption can solve this problem.

But the policy must focus more on the improvement of the social security system, increase the disposable income through tax reduction, reduce the worries of residents' consumption, and form a sustainable spontaneous consumption demand.

As a result, China's economic domestic demand led economy has been truly realized. It has been calling for 20 years to start the slogan of domestic demand, and the driving force of endogenous growth is sure to keep the Chinese economy thriving.

In recent years, the central government has introduced a large number of policies to encourage consumption, and even begun to tolerate the sharp rise in wages of enterprises, even if this may cause a rapid rise in inflation. This can be seen as an important step in decision-making for the future.