The hottest GDP broke 8, exposing the potential cr

GDP breaking "8" exposes the potential crisis of manufacturing industry in eastern China

GDP breaking "8" exposes the potential crisis of manufacturing industry in eastern China

2 in the face of severe energy and environmental challenges, China Construction machinery information

Guide: China's GDP growth rate in the second quarter of this year broke eight for the first time, from 8.1% to 7.6%. More signals of economic slowdown also came one after another. For example, the sharp decline in the growth rate of power consumption or even the reduction of power consumption is a core indicator. From January to May this year, the electricity consumption of the whole society increased by 5.8% year-on-year, and the growth rate fell by 6.25%

China's GDP growth rate in the second quarter of this year "broke eight" for the first time, falling from 8.1% to 7.6%. More signals of economic slowdown also came one after another. For example, the sharp decline in the growth rate of power consumption or even the reduction of power consumption is a core indicator. From January to May this year, the electricity consumption of the whole society increased by 5.8% year-on-year, and the growth rate fell by 6.25 percentage points. From January to may, Liaoning, Jilin, Zhejiang, Chongqing, Gansu and other provinces and cities had a growth rate of less than 3%, and in May, three provinces and cities had a negative growth rate of electricity consumption: Shanghai, Hubei and Jiangxi

the economic slowdown is serious, and it has caused the government to be highly vigilant. The central bank cut interest rates twice on June 8 and July 6. Premier Wen Jiabao paid a special visit to Chengdu last weekend and hosted a symposium on the economic situation in Henan, Hunan, Guangxi, Sichuan and Shaanxi

"new 36 articles" or pie in the pan

the functions of the government and state-owned enterprises are auxiliary and need to be enumerated through legislation, especially the establishment and operation of state-owned enterprises need to be legislated in advance as an exception. The market entry mode of private enterprises in China is: you can enter as much as the government allows. The recent large number of "new 36" implementation rules also reflect this control style

China's central bank recently cut interest rates twice to stimulate economic growth. Whether the interest rate cut can contribute to the annual GDP growth target of 7.5% proposed by the two sessions in March this year is unknown. The financing difficulty of a large number of private enterprises is a major problem, but interest rate cuts cannot solve this problem. The interest rate cut will not encourage banks to provide more loans to private enterprises that lack money, but will make banks more reluctant to lend to private enterprises. However, the interest rate cut does not prevent some powerful enterprises from borrowing funds from banks and then "lending" credit funds to private enterprises through certain channels. Of course, the interest rate cut is conducive to reducing the loan cost of those private enterprises that could have obtained loans, so as to improve the survival and development ability of those private enterprises

the comprehensive effect of interest rate cuts will stimulate economic growth on the whole, which is an iron law in economics. However, this stimulus sometimes has a delayed effect. This effect may take half a year, or even 1 to 2 years to appear. In this way, the government is now adjusting its monetary policy by cutting interest rates, which cannot substantially boost this year's GDP

it is not difficult to understand why the Chinese government has launched fiscal stimulus policies at the same time to speed up the launch of a number of major infrastructure projects related to the overall situation and with strong driving force. With each round of growth slowing down, expanding fiscal investment has become the government's tried and true trump card and its practice. It is worth noting that the government will also put forward policies to improve the survival and development environment of private enterprises. And this has become a common practice

the difference between these two common practices is that expanding fiscal investment is the preferred action of the government, which has been implemented to the letter and even expanded. However, policies to improve the survival and development of private enterprises are often forced by the situation, which are often shelved after their introduction, and their implementation is difficult. In 2010, the government put forward the "new 36 articles" of comprehensively opening market access for private enterprises, but they have not been implemented. This year, the government proposed various implementation rules and stressed the need to improve and encourage private investment in the construction of railways, municipal administration, energy, telecommunications, education, medical treatment and other fields. It remains to be seen whether these policies can be implemented and whether they are still a pie in the pan

the above-mentioned group of expansionary monetary policy and expansionary fiscal policy may remove the two-layer bag containing one thing, and the combination of one layer reflects the typical Keynesian controlled economic style. Keynes' most shocking saying is: "in the long run, we are all dead". However, this kind of control is based on discretion, that is, based on the continuous transformation of short-term operations, ignoring the adjustment of industrial structure and the maintenance and enhancement of the vitality of private enterprises. Discretion also constantly changes the focus of policies because of the total amount target, resulting in the infringement of personal property rights due to the lack of continuity of policies. In this controlled economy, private enterprises live without dignity

in market economy countries, private enterprises are much more comfortable even if they encounter Keynesian policies, and their situation is still much more dignified. There is no forbidden zone for private enterprises to enter the market, and there is no need to enumerate in advance; The functions of the government and state-owned enterprises are auxiliary, which need to be enumerated by legislation. In particular, the establishment and operation of state-owned enterprises need to be legislated in advance as an exception. The market entry mode of private enterprises in China is: you can enter as much as the government allows. The recent large number of "new 36" implementation rules also reflect this control style

relying on fiscal expansion to ensure that GDP is poisoned to quench thirst

large infrastructure projects such as steel, roads, railways, airports, water conservancy projects, etc. do not have much impact on the lives of ordinary people, their marginal income will be less and less, and often squeeze out private investment. At most, they can only maintain part of temporary employment during the project period. However, the structural transformation of the economy has been delayed. It seems that ensuring GDP growth in accordance with the expected target this year still depends on fiscal expansion. But this is a practice of drinking poison to quench thirst, and the result is a vicious circle: the government is heavily indebted, and the debt burden is getting heavier and heavier; Public power is getting bigger and bigger, and the country's advance and retreat are becoming more and more serious; Private investment is squeezed out and structural adjustment lags behind. With the passage of time, there are fewer and fewer infrastructure projects that can be approved by the national development and Reform Commission and require a lot of financial investment. Large infrastructure projects such as steel, highway, railway, airport and water conservancy projects themselves have little impact on the lives of ordinary people, and their marginal income will be less and less, and they often crowd out private investment. At most, they can only maintain part of temporary employment during the project period. But it has delayed the structural transformation of the economy

the slowdown of economic growth is only the appearance of the total change, and the structural problems behind it are more serious. The sharp decline in external demand and the lagging structural transformation are intertwined, highlighting the crisis of manufacturing in eastern China. A large number of private manufacturing enterprises in the East are concentrated in narrow and traditional competitive industries. Other basic and key industries and public utility departments are monopolized by administrative monopoly enterprises. Real estate was suppressed by the government through quantity control and credit control. Associated with it, the stock market is also quite sluggish

in traditional competitive industries, product prices generally show a downward trend, but costs are rising in an all-round way, especially the increase of labor wage costs, the increase of social security costs, the intensification of environmental protection pressure, and the rise of raw material prices. With the sharp decline of foreign demand, many private enterprises are unable to sustain their operations

whether for transformation or upgrading, most of them lack funds, experience and technology. A large number of enterprises will choose to withdraw from the manufacturing industry. Although the central and western regions can undertake part of the transferred manufacturing industry, the labor cost is also rising rapidly. Although there is a gap between the labor cost of the central and western regions and that of the southeast coast, there is a linkage effect. Coastal wage increases will also drive wage increases in the central and western regions. The production costs of enterprises in the central and western regions are also rising sharply. In this case, once a large number of private manufacturing enterprises in the East cannot be transformed or upgraded, there will be a wave of closures and unemployment. If we add in many people who are waiting to enter the job market, it will undoubtedly aggravate social unrest

the government needs to provide sufficient space for the survival and development of China's private enterprises from now on. There are some ways to improve the survival and development environment of manufacturing enterprises in the eastern region and extend the advantages of low-cost manufacturing in the central and western regions. The first one is the need for tax cuts

tax reduction means that we need to control the scale of government expenditure, especially the scale of government investment, and create more investment opportunities for private enterprises as much as possible. The tax reduction here is not just a policy, but a low tax system. The tax burden of many enterprises in the central and western regions may be lighter than that in the eastern region because of the central rise and western development policies, but the government may not charge less for enterprises, and the total tax burden may not be light, especially after the tax reduction and exemption period for new investors. Some counties and cities in the central and western regions still have the practice of "closing the door and beating the dog" to private enterprises with foreign investment. The low tax system is supported by property rights protection and legal security

the economic structure has reached the point of non adjustment

the economic structure has reached the point of non adjustment, and failure to adjust the structure is likely to hurt the fundamentals of China's economy. Structural adjustment should not start from the future, but from now on. It can not be simply pushed forward through the practice of nationalism, but it needs to provide sufficient self-organization development space for market players to promote structural adjustment in the way of market self-organization

first, we should reduce financial regulation. One of the difficulties encountered by many private enterprises is that they have no money to transform or upgrade. The pilot of Wenzhou financial reform has just begun, but it is far from enough to have a local pilot. Almost all the financial reform measures in Wenzhou can be implemented under the existing legal framework, and all regions can follow suit. Although these regulatory reduction measures are meaningful, they are not enough. We need to further reduce financial regulation, such as the approval system to replace the existing approval system in the entry of financial institutions

the second is to reduce economic regulation. For example, state-owned enterprises should withdraw from competitive and profit-making industries, break the administrative monopoly of basic and key industries and local public utility departments, and break entry barriers. Not only should the "new 36 articles" be truly implemented, but also the existing economic style should be changed, and the access of private enterprises should be opened in all fields, while state-owned enterprises are only allowed to operate within the scope of listed activities as exceptions. We should control government financial investment and expand private enterprise investment. So as to enhance the space and vitality for the development of private enterprises

third, we should strengthen the protection of property rights and promote technological progress in combination with the above reduction control measures. This is not a short-term solution, and the effect cannot be immediate. Only by reducing regulation in the financial and economic fields can private enterprises significantly promote technological progress in the medium and long-term development

fourth, we should promote the process of urbanization. Cities are the engine of a country's economic development. Urbanization can expand the market scale through agglomeration, and the market scale is conducive to the refinement of social division of labor, which is conducive to creating greater employment and added value

the project is constructed in two phases

fifth, vigorously developing the service industry can directly alleviate the employment and growth pressure borne by China's manufacturing industry. In 2008, the proportion of service industry in the United States and Germany was 77% and 69% respectively, while that in China was only 40%. The proportion of manufacturing in the United States and Germany is 22% and 30% respectively, and that in China is 49%. Considering that the United States is still trying to "remanufacture", we can roughly regard the proportion of Germany's tertiary and secondary industries as the direction of China's development. In the long run