Analysis And Prospect Of Macroeconomic Situation In Mid 2011

In the past five months, economic growth has remained stable, inflation pressure is still significant, central tightening policy has remained unchanged, RMB interest rate and exchange rate have entered a path of rising and appreciation, and the real estate market game is still in a wait-and-see state.

China's economy in the first half of the year can be summarized as follows: macro stability, micro adjustment, moderate inflation, and the overall performance of the economy is stable and favorable.

In the second half of this year, China's economic growth will remain at a potential growth rate of around 10%, and overall economic growth is expected to reach about 9.8% in the whole year. CPI is expected to remain at a high level of around 5%.

First, the Chinese economic analysis from the perspective of telephoto lens: "double high" economy is a notable feature of the current cycle of economic growth.

China's economy is now in the middle and later stages of industrialization.

consumption

Producer price index (PPI) has also risen from negative growth in November 2009, reaching 7.1% in May 2010. It has remained at around 6%, reaching 7.3% in March 2011, 7.2% in April, 6.8% at March, and 7.1% by May 2010.

PPI has been operating at a high level since it reached over 6% in April 2010.

This reflects the high level of international energy resources and bulk raw materials prices, on the other hand, reflects the fact that domestic labor costs continue to rise and maintain a high level.

GDP growth since March 2009

By comparing the trend of GDP and PPI and CPI, we can see that a notable feature of the cycle of economic growth is high growth and high inflation, that is to say, enter the "double high" economic growth cycle.

Two, China's economic analysis from the perspective of short focus lens: "double slow" stabilization is a prominent feature of this year's economic growth.

Since the beginning of this year, with the gradual withdrawal of the central tightening monetary policy and financial investment, the policy stimulus effect in economic growth has subsided, and the allocation mechanism of the market has gradually played a role. The index of purchasing managers, PMI index, Shanghai Composite Index and electricity generation capacity reflect this characteristic.

"Double slow" stability will be a prominent feature of this year's economy.

Specific data are analyzed below.

The purchasing managers index (PMI) reached its highest level in April 2009, 56.62010 in April, 55.7 in November 2010, 55.2 in March 2011, 53.4 in April, 52.9 in April, 52 in May, and 50.9 in April.

The continued decline of PMI indicates that the overheated economy is over and inflation and growth are slowing down at the same time.

This slowing trend reflects the growth of economic readjustment and the stabilization of policy expectations, and the slowing down of inflation and growth, that is, "double slow".

The "double slow" feature is a prominent feature of the first half of the economy and an important feature of the economy in the second half and the whole year.

Since June 2010, the Shanghai Composite Index has come out of the lowest 2398.37 points and reached the highest point of 3655.66 points in September 2010. It has remained at 2800 around 2800, and remained at around 2900 in 2011 and April, and dropped to 2743.47 in May.

The Shanghai composite index went out of its trough and returned to around 2800. It also reflected that economic growth and policy expectations tended to be stable in the economic adjustment, and economic stabilization was one of the important factors.

Generating capacity, from 367 billion 200 million kwh in January 2011 to 310 billion 100 million kwh in February, to 383 billion kwh in March, decreased to 366 billion 400 million kwh in April, and 12.1% in March, to 377 billion 500 million kwh.

This year, electricity generation is generally higher than the bottom of the current cycle, especially the overall level of 350 billion kwh in 2010.

The rise of power generation and maintaining stable operation at a relatively high level reflect the formation of the strength of economic stabilization and the relative characteristics of "double slow", indicating that economic structure is undergoing adjustment and changes, and the efficiency of resource allocation is improving.

The housing price index has remained at a stable level from 100 to 104 points since 2011.

The housing price index reflects financial investment and inflation expectations in the economy.

The housing price index is stable, indicating that the economy as a whole is stabilizing, inflation is slowing down and growth is slowing down.

This feature also reflects the economic characteristics of "double slow" stability.

Compared with PMI, Shanghai Composite Index, electricity generation and housing price index, we can see that from the economic operational level and enterprise operation level, the economy shows the characteristics and trend of "double slow" stabilization.

Three, China's economic analysis from the perspective of Liquidity: the return of money supply to normality and growth to rationality is another important feature of this year's economy.

The amount of money invested, the narrow money supply M1 has exceeded the broad money supply M2 since August 2009, and lasted until December 2010. Since January 2011, the growth rate of M1 has been lower than M2 and maintained at the same level of growth.

The M1 growth rate exceeded M2 in August 2009, and reached the 38.96% highest point in January 2010. It maintained a steady decline and entered the 2011, below M2 and maintained a relatively stable growth rate, namely January 13.6%, February 14.5%, March 15%, 12.9%, and 15.1%.

The M2 growth rate dropped from 29.31% in September 2009 to below M1, down to 17.5% in July 2010, and back to 19.2% in August, and maintained a relatively stable growth rate. From December 2010 to 21.2%, it began to decline to 17.2% in January 2011, 15.7% in February, 16.6% in January 2011 and 15.3% in 15.3%.

By comparing the growth rate of M1 and M2 with the growth rate of GDP, we can find that since August 2009, including the whole 2010, China's economic growth is mainly driven by the final consumption demand.

Since 2011, with the policy of stimulating consumption in the country gradually fading out and the consumption inhibition in the last round of the economic cycle, the stimulating and supplementary contribution of consumption to economic growth has gradually returned to a rational level of growth.

The growth of total retail sales of social consumer goods has been maintained at a 18% growth rate since 2010. Since March 2011, the total retail sales have gradually decreased and remained at around 17%.

This also reflects the dissipative effect of consumption policy stimulus and the rational growth of consumption growth.

Correspondingly, since 2011, the economic driving force of investment and supply of inventory has been stabilizing.

This shows that the economic plane, whether enterprises, governments, consumers or the market, has returned to a rational level of growth and status.

The slowdown of M2 growth accompanied by GDP's steady growth reflects the improvement of enterprise's microstructure adjustment and management, and also reflects the optimization of market resource allocation.

The new loan has been relatively stable since March 2010, and tends to rise in January 2011. This shows that corporate confidence is recovering. This reflects the adjustment of the liquidity of enterprises in the policy stimulus exit or asset allocation, indicating that the internal assets structure of enterprises is undergoing adjustment and the economic environment is returning to stability.

Industrial added value increased by 13.3% from November 2010 to 15.7% in December 2010. Since 2011, it has been 14.1% in February, 14.8% in March, 13.4% in April, and 13.3% in April, which is relative to the growth rate of M2. This shows that the profitability of enterprises is recovering to a relatively balanced level with the allocation of market resources.

Four, China's economic analysis from the perspective of aggregate supply and demand: supply optimization, demand adjustment, pformation and development, and steady equilibrium growth are the general characteristics of this year's economy.

According to the adjustment of the three industries and the structural optimization trend of the three carriages of investment, consumption and export, the economy shows a tendency towards steady growth within the macro level.

This trend of homeostasis and balanced growth is reflecting the general trend of structural adjustment of economic strategy, pformation of development mode and soft landing of economy.

Detailed analysis is as follows.

The total supply GDP, according to the statistical report issued by the National Bureau of statistics, in the first quarter, GDP was 96311 billion yuan, calculated at comparable prices, an increase of 9.7% over the same period, an increase of 2.2 percentage points lower than that of the same period last year, but it fell 0.6% and 0.1% respectively compared with the whole and four quarter of 2010.

The total supply shows that the economic stability is better.

From the three industry, the added value of the primary industry increased by 3.5%, an increase of 0.3 percentage points over the same period last year, an increase of 11.1% in the second industry, 3.4 percentage points lower than that in the same period last year, third increase in the value added by industry, 1.1 percentage points lower than that in the same period last year.

This shows that the development trend of the primary industry and the third industry is relatively good, which shows the structural adjustment and optimization of the economy.

At the same time, the good development of the primary industry indicates that the supply of agriculture and raw materials is forming an effective supply capacity at the total supply level, which provides a sustained and stable supply environment for cost containment of inflation and stable economic growth.

The development trend of the third industry is good. On the one hand, the environment for supporting the development of the third industry is gradually optimized. On the other hand, it shows that the adjustment and upgrading of the industrial structure is gradually taking shape, and the allocation of resources in the market plays a stimulating role in the replacement policy.

The structural optimization of aggregate supply reflects the pformation of China's economic development mode, the optimization of its economic structure, and the steady growth trend of supply tends to be balanced.

Aggregate demand includes investment, consumption and net exports.

According to the statistical results of the National Bureau of statistics, in 2010, it invested 278140 billion yuan in the whole year, an increase of 23.8%, a consumption of 154554 billion yuan, an increase of 18.4%, and an import and export volume of 183 billion 100 million dollars, an increase of 6.4%.

In contrast, since 2011, it has invested 17444 billion yuan from 1 to February, an increase of 24.9%, a consumption of 29018 billion yuan, an increase of 15.8%, and an import and export volume of 7 billion 300 million US dollars.

From 1 to March, it invested 39465 billion yuan in the first quarter, spending 42922 billion yuan, the total volume of imports and exports - 1 billion 20 million US dollars, FDI303.4 billion US dollars, and the external storage balance of 30447 billion US dollars, an increase of 24.4%.

1 - April investment of 62716 billion yuan, consumption of 56571 billion yuan, total import and export volume of 11 billion 430 million US dollars, FDI84.64 billion.

Based on the data analysis of investment, consumption and net exports from 1 to April, the growth rate of investment, consumption and net import and export in March and April is about 1.26% - 1.33%, 0.48% - 0.95%, and 0.86% - 1.70% as the base from 1 to February.

From this short-term growth trend, investment growth is declining and stabilizing, and consumption and exports are rising and stabilizing.

This result shows that the structure of economic growth at the aggregate demand level is becoming more reasonable, and consumption and exports, and alternative investments become the stabilizing force for economic growth.

This shows that China's economy has shown a soft landing trend in the process of the withdrawal of stimulus policies, the strength of the market is strengthening, and the trend of economic stability is showing up.

According to the structural optimization of aggregate supply and the structural adjustment of aggregate demand, the general trend of China's economic growth in 2011 is to stabilize and improve.

Five, general economic situation analysis and Prospect

To sum up our above analysis, the general situation of 2011 is closely related to the characteristics of the current cycle of economic growth, the withdrawal of the government's economic stimulus policies and the gradual recovery of market forces.

Specifically, the "double high" operating characteristics of the current cycle of economic growth determine that the economy is in a state of coexistence of good growth and high inflation. In the process of stimulus withdrawal and gradual recovery of the market, the "double slow" stabilization characteristics determine that this year's economic growth will be moderated by both growth and inflation; the return of money supply to normal, and the trend of rational growth of liquidity determines that the economy will not show excessive inflation this year, while the economy will also stabilize. The overall supply and demand characteristics of supply optimization, demand adjustment, pformation and development, and steady equilibrium growth determine that the general situation of this year's economy is that the economy tends to soft landing, and the total supply and demand tends to be stable and balanced, and the intrinsic growth power of the economy is gradually stabilized and the trend of economic growth is supported.

To sum up, the overall performance of China's economy in 2011 is that the growth of internal independent equilibrium is steady and the high inflation is slowing down. It shows that the optimization of aggregate supply level restraining inflation further increases, and the structural optimization of aggregate demand level supports the steady growth of the internal balance of the economy.

The level of monetary liquidity will remain at a relatively stable growth level throughout the whole year, and the economy will gradually realize structural adjustment, pformation of development mode and enterprise management innovation.

In addition, according to a strategic analysis framework and a judgment index formed by my previous research on China's economy, namely, "Jiangsu (Shandong) on the economic side, and Guangdong (Zhejiang)" as the policy start, we analyzed the economy of four provinces in Jiangsu, Shandong, Guangdong and Zhejiang, and found that the growth of GDP in four provinces in the first quarter was 11.6%, 11%, 10.5% and 10.4% respectively, all of which maintained a stable and favorable situation.

Combined with our previous studies on the potential growth trend of China's economy, the potential growth level of China's economy will remain at around 10%.

Therefore, we believe that in 2011, China's economy will grow at a potential growth level of about 9.8%.