Guan Qingyou: China'S Economy Needs To Wear "Autumn Trousers"

The economic data in 2014 have just settled. Although the annual growth rate of 7.4% is in line with market expectations, the traditional growth engine is accelerating failure and the Chinese economy is not out of the cold winter. Against this background, Premier Li Keqiang's words and deeds in Davos, Switzerland, are of particular concern. Based on this, we try to find out the "autumn trousers" of China's economy out of the cold winter through the interpretation of Premier Li Keqiang's special address.

The golden age of real estate is gone. Real estate is facing the dual pressure of aging and high inventory. Although interest rate cuts have led to a marked rebound in sales in the first tier cities, the two or three tier cities, which account for more than 80%, are still weak, and the overall real estate sales nationwide are still declining. Coupled with the huge inventory and construction area, and the pressure of the drop in population in the medium and long term, the real estate industry simply cannot afford to expand the demand.

Manufacturing industry is facing total overcapacity. Under the new normal, moral hazard and investment impulse of local governments have been suppressed, investment in real estate development has slowed down, demand side digestion has been lost, supply side has not been able to quickly go to capacity, and manufacturing industry is facing an era of oversupply. In the future, we will focus on deleveraging and productivity. In the process of capacity and deleveraging, it is difficult for manufacturing enterprises to have the power of capital expenditure again.

Exports are also difficult to become "surprise soldiers". In the early twenty-first Century, it was trapped in the quagmire of productivity. China's economy Relying on external demand, the Jedi rebound, but this kind of good play is hard to repeat now. In terms of external factors, developed countries are leveraged to achieve trade rebalance by actively grabbing foreign demand by competing currency devaluation and trade protection. Internal factors show that the real effective exchange rate of RMB is rising continuously, coupled with the tight financing environment and the restriction of labor cost, the endogenous growth momentum of export is not strong enough.

It seems that almost all the important engines are stalling, so whether the audience in Davos or domestic investors, the most important question is: what is the government to save growth? In the early morning of January 22nd, Premier Li Keqiang gave two of the most important clues in Davos. Sum up a sentence: transform traditional engine and create innovation engine.

The first clue is to transform traditional engines, and the key is to expand the supply of public goods and public services. There is still much room for infrastructure and public services in China. According to data provided by Premier Li Keqiang, "at present, the stock of public facilities in China is only 38% of that in Western Europe, 23% in North American countries, and 10 percentage points lower than that in developing countries, while urbanization is more than 20 percentage points lower than that in developed countries." In the period of economic downfall, it is the most effective way to provide stable growth through infrastructure construction and expanding public services. The key problem is where money comes from.

According to our estimate, the growth rate of economic growth of 7% in 2015 also needs nearly 13 trillion yuan of capital investment, while the budgetary financial and land revenue and extra budgetary financing platform can not fully meet these capital needs. We estimate that the gap in infrastructure investment in 2015 is about 4 trillion and 500 billion yuan, which depends on others. financing channel To solve this problem, the most important ones are internal and external two lines: attracting social capital through PPP mode, promoting negative list management, expanding investment access and attracting foreign investment. This reform of investment and financing system is the most important transformation of Premier Li Keqiang. The key areas for future renovation are still "Midwest, railways, water conservancy projects, all kinds of shanty towns and urban and rural dilapidated housing transformation".

The second clue is building. innovate Engine. Premier Li Keqiang delivered two cases in his speech: one is to introduce foreign capital into the Western sewage treatment plant corresponding to the transformation of the traditional engine; the other is the case of entrepreneurship in the Eastern small village. This is not an accident, but it is always a worry. Looking at every speech delivered by Prime Minister Li Keqiang since his assumption of office, no matter what the length of his speech is, he will almost always mention deregulation. What is the purpose of deregulation? It is to ease the business and activate the growth engine of SMEs and the private sector to fill the gap left by real estate and traditional manufacturing.

For the capital market, this is a seemingly irrelevant, but the most practical policy. Because relaxing the threshold and threshold of entrepreneurship is only the first step. The next step is to really activate the enthusiasm of entrepreneurs, so that they can see the possibility and temptation of capital growth, which is only the capital market can do. The reason why the US has become the center of global entrepreneurship and innovation is closely related to capital market, which provides capital appreciation mechanism for entrepreneurs and venture capitalists. Along with this clue, China needs a bull market to pave the way for the promotion of the capital market. On this basis, we can get through the two pulses of direct financing. We expect that the new three boards will accelerate and the IPO registration system will not be too far away.