Zhao
head of National Bureau of Statistics on September 13 to the latest data show that in August, China's urban fixed-asset investment rose 21.5%, and 1-7 during the month compared with 30.5% rate of expansion, a marked slowdown; but also from December 2004 the lowest monthly increase since a single month. The slowdown in fixed asset investment growth signals, many people believe that government macro-control economic overheating inhibition is successful. < br> However, the Chinese economy is really overheated? Let us consider a similar problem: When we find a person's body growing very fast and feared he suffered from What? is his growth rate, or because he is in a youth growing season, the already fast growth; his height may be higher than others is doomed, so the growth rate of higher than normal. After the two situations is healthy. if only because a growth rate of the body Soon to in accordance with the years, China has sustained high economic growth to growth in the world speechless .2003-2004 annual 9.5% in 2005 to 9.9%, while the first half of 2006 is 10.9%. On the surface, the rapid growth of 10.9% highest growth in recent years, and far more than China between 1980-2004 average growth rate of 9.8%, so to judge once again into the Chinese economy overheated, and the regulation is justified. But the really right to judge you?
First, we must be clear: Discussion of must be concluded that On the contrary, as the last round of investment in energy and raw materials and other industries are being transformed into a bottleneck of production capacity, we see supply and demand in China may stabilize or even improve optimism.
, for example, from the price indicators, consumer price level since last year have been in firm control of the 2% level (last year was 1.8% in the first half of this year is 1.3), it is clear that the supply demand situation is almost the best year since the reform and opening up.
in the most easily lead to the source of rising prices, energy, raw materials and power, price index reached 11.4% in 2004, the highest level in 2005, down to 5% in the first half while the international oil prices remain high, but the power shortage situation but a lot better, so the overall maintained at 6.6% level, this should be an acceptable level.
producer price index is also very stable in 2004, 6.1% in 2005 to 3.2% this year on six months is 3.5%. There is a price index of fixed asset investment in 2004 was 5.6% in 2005 was 1.6%, 1.4% in the first half of this year. various price indices do not see any problems.
from the supply and demand between price changes caused by, the current economic growth rate is high indeed, but it is difficult to call it overheating. If you take the current economic growth in 1992 compared to that period, you can almost be called a very healthy, growth is high but stable prices. China's economy now seems like a positive development of young people, body height grow faster but do not need to take medicine.
investment situation do? statistical data show that in this round of economic growth, investment indeed play a leading role .2004 fixed asset investment growth rate of 26.6%, 27.2% in 2005, investment growth in the first half of this year is to reach 31.3% of the high level. This surge in investment growth is seen as reason only! As mentioned earlier, do not judge the reasons of overheated investment in the investment rate itself, but the investment effect. There are two basic judgments based on,UGG boots cheap, first, investment in supply and demand imbalance has led to, which will increase the performance of the investment price index too fast, but the front we have seen, it does not find the statistics prove. The second is the declining return on investment. If the declining return on investment, then no justification for the high investment growth, investment may be in non-rational and non- continued overheating.
then return on investment is declining is not it? answer just the opposite. Recently, Professor Song Guoqing of Peking University with a direct algorithm, continental scale industrial enterprises with net assets and profits compared to calculate Net return on assets, found that since 1999, return on investment in mainland China rising state,UGGs, from 6% in 1999 has risen to more than 18% are in unprecedented levels, but also the highest of major countries around the world The return on investment.
a calculated extraordinarily high and not, as previously described very low return on investment, due to various factors, there may be over-estimated components. But even taking into account the economic boom of the factors (in investment returns when the economy will be high, but in bad times return on investment will fall), inflation, accounting standards and other factors to adjust the current scale industrial enterprises of the real return on investment must also 8-12% level. Obviously, such a level of both the developed markets, emerging markets or global, are unmatched.
What does this mean? means that China's investment rate of return is not like the mainstream point of view and as bad as that is very, worse, but good enough, climbing; means low inflation rate in the current investment rate of China's economic growth is driving a solid support, is sustainable; of course, means that is in a ; the steady flow of global capital will continue to gather in China to seek a high return on investment.
investment rate of return for the understanding of the subversive is very important, and its policy implications and financial implications can be said to have different unusual. from the government point of view, given the current price level stable and high return on investment, do not need the strong macro-economic control, in particular, can not continue to dampen investment to tighten overall demand.
macro-control should aim at external demand
say the least, the Government must control how to do? best way is to replace the macro with the real administrative control. in macro-control, not the hard-pressed investment, but foreign demand compression.
According to the Ministry of Commerce statistics,bailey UGG boots, in 2002 the total output of China's total trade in goods that dependence on foreign trade as a share of 51%, 60.2% in 2003, 2004, more than 70% in 2005, then climbed to the historical peak of 80%, China became the world countries with the highest dependence on foreign trade on the over all market economy countries.
rely on external demand triggered by stimulating economic growth and international trade and exchange rate system has caused trade friction and the vigilance of the parties. driven by external demand is expected in 2006, a surplus of economic growth will still increase. On the other hand,Discount UGG boots, the growing trade surplus, especially including the capital surplus account surplus for the double loss of national welfare in China has caused widespread concern.
double the balance of payments surplus consequences of foreign exchange reserves soar. 6 at the end of 2006, China's foreign exchange reserve amounted to 941.1 billion U.S. dollars, ranking first in the world. This will bring negative impact on several aspects of the reserve continues to expand the scale of the management of foreign exchange reserves, exchange rate formation mechanism and implementation of monetary policy will be a great test.
In this case, the government implemented macro-control most of the pressure is external demand rather than investment. If foreign demand affect economic growth down, then even consider further accelerate investment.
for the simple reason, the Chinese foreign trade earned by blood sweat money and buy U.S. Treasury bonds, which take into account the appreciation of the renminbi interest rate costs and the loss of their investment income near zero, there is more than not on the high-yield domestic investment. Therefore, the greater the trade surplus, China's national welfare, the greater the loss of a matter of fact, this is a business of most worth it.
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