Reserve Space For Structural Adjustment To Reduce Economic Growth Next Year

Specifically, the US side has seen a series of encouraging signs in the recent economic data: the two quarter revised GDP growth of 4.6%, the unemployment rate dropped to 5.1% in September, and the economic growth and the labor market changed, which led to the steady withdrawal of the QE from the Federal Reserve, and the US dollar index rose. Since May, the US dollar index has gone through a strong wave, and it began to rebound strongly after its 78.91 year low in May 8th.

However, the strong dollar market is hard to sustain. Although the US economy has picked up, it has benefited mainly from the increase in asset prices driven by quantitative easing, and economic data are mixed. On the contrary, structural reforms in the US have not made any substantial progress. For example, the efficiency of the US production is limited, the high consumption and low savings have not changed significantly, the proportion of manufacturing industry in GDP is still declining, and the burden of medical care is heavier and worse, which is similar to that before the crisis.

In other words, the Fed's monetary policy is still a lot of problems. The policy ideas are getting closer and closer to the Greenspan era. Monetary policy is highly anticipated, and structural reform is actually slow. This leads to uncertainty in whether the US economy can enter a new rising cycle. In view of this, it is hard to believe that the US economy can withstand the tight policy environment. For example, in recent days, pessimism in the United States has been pouring in. In September, retail sales fell from 0.3% to 0.1% in September, and the PPI fell by the first time in August. Pessimistic economic data also triggered panic in the US capital market, and the stock market fell day by day. In October 14th, the three major stock indexes of the United States crashed and collapsed nearly 3%. Therefore, the Fed will raise interest rates as early as mid next year.

Of course, the European situation seems not optimistic. In October 14th, the German 10 year treasury bond yield fell to 0.856%, setting a record low historical point. As an important indicator to reflect the long-term risk premium and inflation expectations of the euro area, I can not help worrying that the euro zone has the risk of repeating the "ten years" of Japanese economy.

In fact, there are many economic indicators that show that the euro area has entered the trend of "Japan", including economic weakness, deflation and so on. For example, the euro area consumer price index continued to slow down in September, only 0.3% year-on-year growth, and for 12 consecutive months, less than 1%. In terms of growth, the overall growth rate of the euro zone economy in the two quarter was 0, basically stagnant. In particular, the relatively good eurozone economic locomotive Germany, which is now relatively good, has seen a severe economic downturn. Exports in August shrank by 5.8%, the biggest decline since January 2009, reflecting the gloomy picture of the German economy.

In addition to cyclical reasons, the impact of changes in the supply side on the growth of the euro area is even more worrisome. For example, the eurozone countries are facing an increasingly serious population aging problem, and the aging of the population has been an important reason for the Japanese economy to be trapped in the "lost ten years"; the labor market system in the euro area is rigid, the unemployment rate is high and the labor force is idle; the high profits and high taxes in the eurozone will undoubtedly weaken the competitiveness of Europe; in addition, many European countries have a large and inefficient public sector, which has affected the efficiency of labor production.

What is more serious is that the policy space seems smaller than that of Japan, because the euro zone economies are limited by the political system, the decision-making environment, the flexibility of fiscal and monetary policies and so on. In terms of fiscal policy, the eurozone has just come out of the worst time of the debt crisis, and the path of fiscal union is still a long way to go, and there is limited policy space in the short term. In terms of monetary policy, although the European Central Bank is ready to launch quantitative easing, it is expected that the German central bank will be cautious when it is obstructed. If so, the effect of quantitative easing in Europe will be rather limited. However, under the bottleneck of the supply side and the lack of sufficient means to stimulate the demand side, the Japanese economy of the euro area economy is hard to avoid.

In addition, the overseas economic turmoil is reflected in the expected decline of the Japanese economy, showing that Abe economics has not been able to lead the way of economic recovery smoothly; the increasing geopolitical risks, including the Ukraine crisis and the confusing situation on the Korean Peninsula, have brought more uncertainties to the future overseas economy.

Therefore, the uncertainty of the overseas economy will be strong for some time. This is both an opportunity and a challenge for China. Many investors will reconfigure the global assets and make China a safe haven for capital. As early as a period of time, the Chinese stock market has seen a round of global inflation, the Shanghai Composite Index has risen 12.9% this year, which is better than that of developed countries such as Europe, America and Japan. There is no doubt that China should cherish this rare opportunity to boost the domestic depressed economy and capital market. At the same time, we must guard against the overseas economy's impact on China's economy. negative effect In particular, the challenges faced by external demand.

Judging from recent figures, though Exit From 9.9% in August to 15.3% in September, imports reversed the decline of 2.3% in August, and achieved a 7.2% year-on-year increase in September, reflecting a favorable trade situation. But there are also worries under the beautiful trade data. Considering the gloomy economic growth prospects in the near future, whether the strong export data will continue to be tested. Meanwhile, import growth figures show that the rebound in imports is more due to the impact of processing trade, which means domestic demand is still rather weak.

At the same time, the latest figures show that the total electricity consumption in the whole society increased by 2.7% over the same period in September, although it was 4.2 percentage points higher than that in August, but it is still the lowest in nearly 18 months. In September, PPI fell by 1.8% compared to the same period last year, and was in deflation for 31 months. In view of this, China's economic outlook for the future will remain cautious, and positive policies should be introduced continuously, especially in the early days of stable foreign trade and loan concessions for improved housing demand. It is necessary to reduce interest rates and ensure that the economy stabilizes in the fourth quarter. And in the long run, through steady growth and structural adjustment, ensuring that China's economy will not hard landing will help boost global investor confidence when overseas economic risks increase.

For this reason, next year we can consider it. economic growth The bottom line is set at 6.7%, leaving room for overseas risks and structural adjustment. Although the 6.7% target is lower than the general expectation of the current market, but because it is not the expected target but the bottom line of policy operation, if the majority of time grows above the target, the macro-control policy can reduce the action and create considerable space for the reform. Once the target has a risk of breaking down, it can act quickly, and the market consensus will effectively prevent the delay of the best policy timing. So the goal is clear, whether from the operational level or to guide the expected level, can play a good effect.