How To Evaluate The New Normal Economic Situation In China?

Under the new mediocrity of the global economy, how to evaluate the new normal of China's economy? The world is contradictory, the market is tangled, and the conclusion may not be correct. In the global market, especially in the Chinese market, the Fed's interest rate hike in April has been reduced. S & P's negative outlook on China's sovereign credit rating will also affect the US and global markets. When the global economy is in urgent need of confidence, S & P is more like a market breaker.

Following Moodie's March 2nd adjustment of China's sovereign credit rating outlook to negative, in March 31st, the international rating agency, S & P, also announced that China's sovereign credit rating would be downgraded to negative and that the outlook for Hongkong's credit rating in China was also downgraded to negative.

Indeed, as part of the analysis shows, there is structural contradiction between structural reform and steady growth in China's stock market turbulence, high local debt, pressure on stock market pressure, life inflation and industrial deflation, and foreign exchange reserves. From a technicist point of view, these factors do misrepresent and misread the global rating agencies such as Moodie and S & P. This is not because these international rating agencies are not professional, but because they are too professional. Because of their specialties, they are accustomed to using the typical market model and pure mathematical analysis to evaluate the Chinese market.

In other words, if we simply analyze the western market economy data model as a theorem or axiom to analyze the Chinese economy, there will be problems. The situation in China is very complicated. The relationship between the government and the market is not entirely clear. The logical relationship between government leading and market allocation is in the progressive tense that is being clarified.

In the past, the western world (including the government level, think tanks and international rating agencies) did not recognize China's market economy status during the rapid growth of China's economy. But now that China's economy has entered the new normal of adjustment, it is not contradictory to evaluate the Chinese economy in a purely market-oriented system.

The problem is right here. Take Moodie as an example: its outlook for lowering China's sovereign credit rating before the two sessions is negative. However, before the two sessions, the G20 policy meeting (finance ministers and central bank governors meeting) issued a signal of China's stock market and foreign exchange market stability, and the two sessions released more favorable policy signals. China's stock market and foreign exchange market began to stabilize. foreign exchange reserve The situation of shrinkage has also been changed. Moodie's judgment on China seems to be out of order. Finance minister Lou Jiwei is open to this. We are not care (Guan Qie).

As the main credit rating agency in the world, Moodie and the S & P, the evaluation system is based on the market economy in the US and Europe. evaluating indicator The corresponding economic constants are set. Deviating from these criteria and constants, the evaluation result is naturally "not positive".

The West has built up a mature market economy mode, which is successful, but it is not closed. In addition to bringing the template of western market economy, China's market economy mode has also melted into the connotations suitable for its national conditions. For example, the effective guidance of the government's mobilization, appeal and execution, and the strong correction of the policy to the market.

Therefore, it is very difficult to objectively use an inertial Western mind and a set of western style evaluation system. China's economy The pulse can not make a fair and objective judgement.

In terms of monetary policy, it is very effective for the United States to manage the financial crisis with the policy of QE. Japan, Europe and the United States belong to the developed market, and the rule of law and rules have a high similarity. Therefore, they have been saving the economy through QE. But China's new normal monetary policy adopts the use of various policy instruments. Especially after the inflation rate reached 2.3% in February, this year the central bank has only once lowered its monetary policy to a flexible and moderate level.

To evaluate China's market and economy, we need to understand the connotation of the new normal of China's economy. If we interpret the new normal as "no good" in China's economy or focus on government debt, high leverage, chaos in the stock market and exchange market disorder, it is an effort to ignore China's policy structural reform.

International agencies can independently evaluate China's market and economy on the basis of their professional standpoints, but also listen to the voice from China. Otherwise, stubborn and arbitrary evaluation will not only damage their international credit, but also lead to misunderstanding of China.

In the face of uncertainty in the global market, the negative rating outlook on China's second largest economy will also lead to global market turmoil. After the announcement of the S & P news, the Asia Pacific stock market opened up in a miserable fashion. The Shanghai Stock Exchange Index of A shares did not turn red until close. Offshore renminbi also fluctuated.