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Zhang Yugui: Macroeconomic Decisions Need To Be Set Aside For Growth And Inflation.

2011/7/15 10:05:00 37

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While macroeconomic policy decisions should give full attention to the release of short-term economic data, we should also avoid allergic reactions to economic data.

For the current and future economic strategy choices, controlling inflation and ensuring effective economic growth is certainly an important point of governance, but systematic engineering of economic strategic pformation can not be slack.

Therefore, it is urgent to set up an effective mechanism to eliminate the ups and downs of economic operation and to enhance the endogeneity and autonomy of China's economic development.

China's first half year attention

Macro economy

Data, there is indeed no secret: in the first half of this year, the consumer price index (CPI) increased by 5.4% compared with the 2.6% rise in the first half of last year, which made the decision makers worried about the CPI.

The debate over whether inflation has peaked and whether the macroeconomic policy will change in the second half of the year reflects the extremely high degree of difficulty in assessing and controlling a complex economy like China.

However, if we only look at the price of pork to control prices, we should be short-sighted, because the recent surge in pork prices is only a staged expression of economic difficulties in the long run.

I believe that China's economy, which shoulders the two tasks of economic pformation and industrialization, is not expected to be far away from inflation until it is difficult to eliminate many factors in the short term.

Of course, China's economic operation in the first half of the year was placed in China's past.

Growth cycle

And worldwide observation, there are still many bright spots.

9.6% of GDP growth is enough to overlook the world's major economies, and industrial production and income of urban and rural residents have also maintained a relatively good growth momentum.

Li Guangyao, who has been closely monitoring China's development trend, has predicted that China's economy may catch up with the United States in 10 years and surpass the United States in 20 years. Shandaman, a Singaporean vice premier who understands the economy, believes that China will rise in the middle and high-end manufacturing industry in the next 10 years and end its practice of exporting capital to the developed economies. These two changes will bring enormous challenges and opportunities to the world.

In my view, it is clearly far more important to maintain the sustainable growth of China's economy than any other economic objective.

In the coming period, as long as China starts deep reform step by step, it will ensure that the economy is strong and high-quality.

Growth momentum

It will definitely be released.

Why do you say that?

First of all, we can analyze the logic behind the judgment of China's economic problems and situations by some mainstream economists and Western analysts.

In their view, the total number of people who need employment in China is more than 24 million per year. According to the rate of economic growth of 8%, the employment of 12 million people can be solved, but there are still 12 million gaps between supply and demand.

Such heavy employment pressure makes the government particularly sensitive to economic growth data. As long as the economic trend is slightly bad, the government is going to launch a hot start of the economy through expansionary economic policies.

From the perspective of China's coping strategies since the outbreak of the international financial crisis in 2008, it is indeed in accordance with Keynes's thinking to start a package of economic stimulus plans.

But even the most stimulating 2008 central economic work conference is still very concerned about economic restructuring.

For example, from the five contents of the central economic work conference, in the short term, the central government hopes to maintain the bottom line of economic growth by 8% through a proactive fiscal policy and moderately loose monetary policy. In the medium and long term, the central government hopes to prevent the ups and downs of China's economy by changing the mode of economic growth and find a growth mechanism that can keep the economy alive.

It is only in the implementation of specific policies that governments at all levels do not understand and carry out this spirit deeply. They have not made great efforts to change the concept of economic growth and take effective measures to create an endogenous economic growth mode. As a result, China has succeeded in avoiding economic avalanche like Japan, despite its aggressive fiscal policy and loose monetary policy.

In a sense, China is in exchange for the economic growth at the expense of the timing of economic pformation; as for the further deterioration of the economic imbalance, the narrow channel of private investment, and the rise of inflation caused by excess liquidity, it has not been considered in the overall economic policy of the local governments, resulting in the difficulty of economic regulation and control.

In fact, after completely changing the way of economic growth has become the central task of economic development in 12th Five-Year and even in the coming period, macroeconomic policies should focus on whether the short-term economic objectives are beautiful, and whether the sustainable growth can be realized.

If we are worried about the decline in economic indicators and go back to the old way of stimulating the economy, we will not only pay a heavy price for the rise of systemic economic risks and the aggravation of internal and external economic imbalance, but also lose the opportunity window for the successful switch of China's growth momentum while losing the opportunity of structural adjustment.

For some time, the central bank has faced some policy dilemma in the face of inflation rising momentum, which is actually paying for the negative effects of internal and external economic imbalance.

Looking at the relevant monetary data, although the balance of China's broad currency (M2) in the first half of this year has dropped sharply compared with the same period last year, the growth rate of more than 30% yuan in the first half has repeatedly harassed the central bank's nerves.

It is estimated that in the second half of the year, foreign exchange will be paid up to 300 billion yuan per month, and the market due to open market may be 1 trillion and 620 billion yuan, so that about 3 trillion and 400 billion yuan will be needed to hedge new liquidity. How hard is it to implement a prudent monetary policy?

Obviously, macro decision making must pay full attention to the release of short-term economic data, but it should also avoid allergic reactions to economic data.

Only by establishing effective mechanisms to eliminate the ups and downs of economic operation can we get rid of the fog of growth and inflation.

However, over the years, in promoting the economic growth is the macro priority of governments at all levels, the preference for investment and exports is a universal policy awareness and has been consistently implemented.

As a result, the proportion of new GDP created by China in the past year is very high from investment, and even more than 80% in individual years.

The author estimates that in China's economic output of nearly US $6 trillion last year, the proportion of real efficiency will not exceed 30%.

Of course, the low efficiency of investment has provided room for improvement for China's economy.

Changing the mode of economic growth and turning the focus of economic growth to relying more on technological progress as soon as possible, in order to find new investment channels and create new demands for capital, and enhance the endogeneity and autonomy of China's economic development, it is imperative.

The government urgently needs to accelerate the marketization reform in key areas, so as to enhance the efficiency of economic efficiency and the effectiveness of capital accumulation, and use the matching monetary policy to curb overheated investment, thus eliminating the mechanism of the ups and downs of economic operation.