Century Changes And Century Epidemic Situation Interweave Each Other, Where Does China'S Economic Stability Come From

Recently, China's economic indicators from January to July have been released one after another, which has aroused a lot of attention.

As the largest trading partner of more than 120 countries and regions in the world, the next trend of China's economy affects the pulse of the global economy.

In the past decade, the number of routes to 11 international hub ports along China's coast has increased by 60%. The maritime service network connects the main ports of more than 100 countries and regions, becoming the country with the highest degree of maritime connectivity in the world

At present, the century change and the century epidemic situation are intertwined, and countries around the world are deeply impacted. How should we understand the challenges China is experiencing and the expectation of future growth?

How to find the right coordinate for evaluating China's economy?

Tan Zhu and the authorities worked out an account together.

　　01、 Which mode of epidemic prevention and control costs the least?

A research team from the National Bureau of statistics has conducted a model calculation on the relationship between the epidemic prevention and control policies, macroeconomic policies and economic loss rate since the outbreak of new crown pneumonia

From 2020 to the first half of 2022, the total loss rate of China's economy under strict prevention and control is only 2.3%.

However, the economic loss rate under the mode of tight prevention and control (such as Japan and South Korea), passive prevention and control (such as Germany, France), and negative prevention and control (such as the United States and the United Kingdom) reached 3.9%, 5.5% and 5.9% respectively.

At the same time, after excluding the impact of macroeconomic policies, China's economic loss rate has dropped to the lowest level among the major countries mentioned above.

The international media pointed out in an article entitled "China's new crown infection" policy of "dynamic clearing" contains the lessons for other countries. China's anti epidemic policy of "dynamic clearing" has achieved the goals each country sought two years ago: low mortality and as little economic chaos as possible.

China's epidemic prevention model has achieved the effect of both anti epidemic and production development.

A typical example is that in the first half of this year, China's export data has become a bright spot in the growth of the world's major countries while their economic growth expectations are declining.

　　02

Why has China become the global lifeline?

This is one of the perspectives of the cost of epidemic prevention. China adheres to the "dynamic zeroing", which reduces human, material and economic and social costs as much as possible, and achieves overall economic and social stability.

The policy of "zero loss" and "stability of China's industrial chain" is always behind the policy of "zero loss" and "stability of China's industrial chain".

Over the past two years, this has been reinforced by repeated outbreaks.

Recently, Mr. Tan had a chat with Yan, chief representative of China of Maersk Group, a global container shipping logistics giant.

The year Maersk invested in the first fully automated warehousing project in China was 2020, when the epidemic was just beginning.

There are reasons for Maersk's confidence in investing in this project against the wind.

At the 2020 China International Trade in services Fair, Mr. Yan praised the company's continued normal operation with the help of the Chinese government and the supply chain was not interrupted.

During the epidemic, China has been fully protecting the production of enterprises with a stable soft and hard environment. The goods made in China are continuously transported to the world through logistics companies like Maersk.

According to statistics from the United Nations Conference on Trade and development, China's share of global merchandise exports increased from 13% in 2019 to 15% by the end of 2021 during the outbreak.

Among them, China's share of global electronics exports increased from 38% in 2019 to 42% in 2021, and its share in textile exports increased from 32% to 34%.

China's increased export share has become the "lifeline" for countries such as the United States and Britain to maintain their operation.

In 2020, when the epidemic just broke out, 83% of the imported masks in the United States were made in China, two thirds of the protective clothing came from China, and 90% of the box refrigerators specially used for storing vaccines came from China, showing an explosive growth.

China's epidemic prevention and control has stabilized the industrial chain and supply chain, making made in China a ballast stone for global epidemic prevention, production and living.

The stability in the face of wind and rain comes from the accumulation of a sword in ten years. "Ten years of decoding" broadcast by the head office is the best example.

The number of China Europe trains, which are still running smoothly in Asia and Europe under the epidemic situation, has grown explosively in the past decade, reaching nearly 900 times that of the year when it was opened. Today, on average, 42 trains travel between China and more than 190 European cities every day

In the complex global epidemic situation, stable policies and environment are more attractive, and the sharp flow of international capital is very convincing.

A few days ago, the Ministry of Commerce announced that the actual use of foreign capital in China from January to July this year was 798.33 billion yuan, an increase of 17.3% on a comparable basis.

Investment is confidence.

　　03、 Who has more confidence in China?

The four investment sources mentioned by the Ministry of commerce can be seen as follows:

The United States, which failed to prevent and control the epidemic, increased its investment in China by 36.3%. The rest of the countries are also allies that the United States is trying to attract.

You know, for a long time in the past, the focus of US diplomacy was to build small courtyards and high walls on the industrial chain with these countries as the axis.

But what is the general trend? Multinational enterprises have given their own choice.

According to the 2022 white paper of American enterprises in China released by the American Chamber of Commerce in China this year, more than two thirds of member companies continue to list China as the primary market.

Starbucks, a Seattle based coffee chain, aims to open 6000 stores in China by the end of the year.

In the first half of this year, Germany's investment in China has reached a record high since 2000. Among the industries in which Germany has increased its investment in China, there is its manufacturing industry, the "pearl on the crown" - the automobile industry.

This year, VW, which has been operating in China for nearly 40 years, has set up its first subsidiary of cariad in China, which is also cariad's first overseas subsidiary.

Nearly 40 years ago, the entry of Volkswagen once laid the seeds for the growth of China's automobile industry.

Today, in Volkswagen's view, the establishment of a new plant in China, which ranks first in the world in terms of new energy vehicle industry, represents Volkswagen's hope.

To bring the "leader" of the country's top industries to China, in addition to economic considerations, means more precious confidence.

From a global perspective, the United States, Japan, South Korea and Germany are the economic leaders of the Americas, the Asia Pacific region and Europe, and they are also the wind vane of their regions. Their choices are very convincing.

In fact, the United States has long since done it: China is one of the countries with the highest total return on foreign direct investment.

According to the estimates of the US economic analysis agency, the average rate of return on us direct investment in China from 2000 to 2020 is 14.7%, which is much higher than the 9.7% yield of us overseas direct investment.

On the contrary, if US enterprises reduce their investment in China by half, it will cause very direct damage to the US economy, and the one-time loss of gross domestic product (GDP) will be as high as US $500 billion.

Even during the outbreak of new pneumonia, the overall rate of return on foreign investment in China is still rising. In 2021, foreign investors can still get a yield of more than 6% when they invest in China.

From a longer time dimension, the return on investment in China in 2020 and 2021 will remain at a stable level.

Under the epidemic situation, it is stable, which can explain the problem.

Pan Yuanyuan, an international investment expert at the Chinese Academy of Social Sciences, told Tan

The first characteristic of FDI is the long time cycle; Second, foreign-funded enterprises will also participate in management, bringing their own technology, experience and channels to China, and combining with China's resources for transformation. At the same time, it is more speculative and risky to invest in securities market, so it is more critical to invest in securities market.

In other words, what FDI values most is the stability of a country's economic expectations.

　　04、 What is the stability of China's economic expectation?

Recently, the International Monetary Fund also increased the weight of RMB in special drawing rights (SDR) from 10.92% in 2016 to 12.28%.

This figure is not only the confidence of the international community in the stability of China's economy and financial market, but also the recognition of China's effective epidemic prevention and control.

In 2020, under the epidemic crisis, different countries have different economic policies to deal with the impact.

The United States, as a representative country, has adopted unlimited quantitative easing policy in order to achieve quick results in the short term.

From the second quarter of 2020 to the first quarter of 2021, the year-on-year growth rate of M2 in the United States remained above 20%, and the average growth rate of M2 after the epidemic was about 10% faster than that before the epidemic.

Moreover, the United States has repeatedly introduced large-scale economic rescue bills, and the fiscal deficit rate in 2021 reached 12.4%, even higher than the historical high of 9.8% during the financial crisis in 2009.

"Xiamengyao" seems to be effective quickly, but it has led to bad consequences.

During the epidemic period, the United States not only ranked among the countries involved in the survey with an economic loss rate of 6.5% (excluding the impact of macroeconomic policies). More directly, inflation in the United States hit a 41 year high.

Inflation in the United States not only makes American enterprises and consumers bear high production and living costs, but also transfers the crisis to the world.

According to the assessment of the bank for International Settlements, the annual inflation rate of nearly 60% of developed economies exceeds 5%, the highest level since the end of 1980s; Inflation in more than 50% of developing countries has also exceeded 7%.

The Federal Reserve's rapid interest rate increase in response to inflation has expanded the debt scale of emerging market countries. According to the International Monetary Fund, there are 38 developing countries facing debt risk.

Under the impact of global inflation and the Fed's interest rate hike, Sri Lanka has to declare national bankruptcy due to its "insolvency", becoming the first new market country to default on sovereign debt in 2022.

Compared with the strong stimulus measures of the United States, China's macroeconomic policy has been guided slowly and steadily during the epidemic period. In the first half of this year, China's consumer price index (CPI) rose by 1.7% year-on-year, far below the level of European and American countries.

Because of this, the US dollar index has risen by more than 11% this year, and the depreciation of euro, pound and yen against the US dollar has ranged from 10% to 17%. Compared with the global currencies of around 8.5%, the RMB is relatively stable.

As Lu Jinyong, director of the foreign direct investment research center of the University of foreign economic relations and trade, said that in the current global economic and market downturn, China still gives people a kind of expectation and hope - a growth expectation, a profit expectation and a better and better hope.

Among the articles on China's economy in the international media, there is a title called "China's economy has hidden power".

What is the hidden power of China's economy?

It is to coordinate development and security, and to deal with the outstanding problems of economic development with the concept of system.

It is the wind and high waves, but tenacious as rock, steady and steady, and its own sky.

(source: CCTV)