Li Xunlei: Orderly Speed Is Better Than No Order.

Last week, I visited QFII customers and spent a week in Taiwan. Because I was repeatedly asked about the trend of the domestic economy and the future policy, I was prompted to think about it, and to get some insights and insights from a week's experience and compare the similarities and differences between the two sides' economy and finance.

Back in China, you have to scramble to squeeze the subway, breathe polluted air, and quickly cross the road between motor vehicles and pedestrians. The psychological pressure brought by such disorder is actually just a representation. The deeper question is how long will the domestic economy sustain in the upward spiral of investment surplus debt reinvestment?

The number of QFII in Taiwan is very large, but the amount is usually not large, which is certainly related to the domestic quota control, and also related to the economic volume of Taiwan. Communicating with customers in Taiwan, they are far more interested in the mainland's macro economy than in the industry. This is quite different from the situation when I arrived in Taiwan last March.

Crossing the road in Taipei is a bit of a habit for me, because the waiting time is too long. The longest green light I saw was 120 seconds. In Shanghai, the same width of the road is only about 30 seconds, so Shanghai, which has entered an aging City, many elderly people crossing the road often discouraged. Although I was impatient, I thought it would be one or two minutes slow to think about it. It didn't delay things. For a long time, people could walk across the road very calmly, thus reducing traffic accidents.

Let's take a look at the GDP growth rate in Taiwan. Last year, the growth rate was only 0.85%. This year's forecast is 1.4%. Compared with the mainland's economic growth rate, it is simply a race between the tortoise and the hare. We have to maintain 7, and they want to protect 1. But even if the economy grows so slowly, there is no obvious unemployment problem. And our GDP growth rate is so high, but all day long worry about the employment problem.

I remember that in the past 09 years, in order to cope with the employment pressure caused by the subprime mortgage crisis, we all calculated the number of new jobs that GDP could add to one percentage point. The result was disappointing. In the early 90s, it was about 1 million 200 thousand. It was about 1 million in 2000, and only 850 thousand in 09 years. Therefore, the original goal must be guaranteed eight, even though the goal of the 11th Five-Year plan is 7.5%. Today, the 1 GDP growth can bring in more than 1 million 500 thousand new jobs, because the proportion of services sector has increased. So, if the problem is lengthened, it is not a problem.

Although Taiwan's economic growth is slow, its social welfare is better, which is certainly related to the acceleration of social competition by party competition. Good social welfare is a great burden for the authorities, but this cost is cost-effective. Because compared with the domestic, due to poor social welfare, so fear of dealing with dead businesses will lead to unemployment, so they continue to give blood to state-owned enterprises with losses, so the cost has far exceeded the cost of raising social welfare.

According to the data released by the Ministry of finance, the total liabilities of state-owned enterprises reached 79 trillion last year, an increase of 13 trillion over the previous year, but the basic pension balance in China was only 3 trillion and 500 billion (2014). If we can make the debt of 15 years state-owned enterprises as a pension payment, then the social welfare of our country can be fundamentally changed. In fact, the debt of state-owned enterprises increased by 18.5% in the past 15 years, but the profit declined by 6.7%. No wonder Li Yining said at the two sessions that raising state enterprises is not as good as raising employees in state-owned enterprises. In this way, the debt burden of enterprises can be greatly reduced, while the living security of the unemployed can be fully met.

But in the name of preserving employment, the domestic economy is always pursuing the economic growth rate, or directly targeting on GDP speed. But GDP needs to speed up, and investment is the most effective. Therefore, in order to speed up and run to Beijing, in order to speed up, a large number of huge investment projects have not been scientifically demonstrated, and have not been considered directly by the NPC. As a result, the total investment in fixed assets accounted for more than 80% of GDP, and some provinces even exceeded 100%. Now, we have to go to capacity and inventory.

As for the appearance of the cityscape, it is more beautiful and luxurious than Taipei to pick a second tier city in China. If we want to talk about the total amount of GDP, six or seven provinces in China should exceed Taiwan. However, compared with traffic order, residents' quality, social welfare and other services, it is impossible for China to compete with it. I have also taken the only high-speed rail in Taiwan. The carriage is not as luxurious as the domestic one, but the service is much better than the domestic one.

I remember that in March last year, the domestic stock market was in the ascendant, and the fund managers in Taiwan were envious. At that time, there were at least several aspects that could be looked forward to: mass entrepreneurship, innovation, reform of state-owned enterprises, along the way, free trade area, Internet finance, etc. But a year later, they began to worry about the domestic real estate bubble, worried about the debt crisis, worried about the devaluation and foreign exchange reserves, and worried about how bad the bank's bad debt rate was.

Of course, they still have expectations for the domestic economy. After all, China and the United States are already the two largest economies in the world, and are the engines of global economic growth. But they are cautious about investing or holding A shares. For the growth sector, they think that the valuation is too high; for undervalued cyclical plates, they are less confident in the recovery of the cycle.

According to an analyst with me, a financial institution in Taiwan told her that China financial market In Taiwan's Risk-Return evaluation system, it is classified as risk level 5 (the highest risk level), which means that the financing cost of issuing RMB funds is very high. It was not long ago that Moodie and other international rating agencies lowered China's sovereign rating and some financial institutions' rating outlook. Although it was strongly condemned by the authorities, this objectively reflects the concern that China's debt growth is too fast and the economy is not optimistic.

The Taiwan weighted index rose 105% from the end of 09 to the end of 1, and the Shanghai Composite Index gained 43%. During the period, domestic GDP doubled, from 34 trillion to 68 trillion, while Taiwan's GDP grew by only 40% from 09 years to now.

So, it is meaningless for the economy to grow so fast. Steady growth The significance is also small, because the profit growth rate of enterprises is decreasing, and the profit of state-owned enterprises is negative growth, and the deficit is expanding. Last year, if the main board listed companies eliminated non recurring gains and losses, the deficit would be close to 30%. Rough statistics, 14-15 years, the main board listed companies profit increased by only 10%, but Price of stock Rose 70%, 13-15 years, gem growth 70%, stock price rose 300%. This shows that loose monetary policy can not change the downward trend of corporate earnings, a large number of funds to the real and virtual, increased the stock market and real estate bubble.

At the same time, the cost of steady growth is enormous. For example, the debt growth of state-owned enterprises increased by 18.5% over the past year, far exceeding the M2 growth rate of 13.3%, while the growth rate of M2 is far more than that of fixed asset investment, which is far more than the growth rate of GDP. However, the growth rate of GDP is far more than that of state-owned enterprises. As a result, after a big circle, the leverage ratio increased, inventory increased, overcapacity, and profit growth was negative. In some places and enterprises, wages are not yet in arrears.

This time, in Taiwan, we also ran away two enterprises in Taichung City, one of which is the enterprise that produces industrial hooks and safety belt hooks. The scale is small, with only more than 300 workers, but it is invisible world champion, such as the global share of seat belt hooks is more than 60%. The company's annual profit growth is around 15%, though Taiwan's GDP is less than 1%. Do I have to take off my shoes when I enter the office area of the factory, or do I think I am going to enter into the food producing enterprise? It is said that many enterprises in Taichung Industrial Area are invisible champions of the world segmentation industry. They pursue the quality of products and implement highly automated and sophisticated production. They do not pursue listing, nor do they want to carry out wealth arbitrage through listing.