What is the state of China's national economy? How can we solve the main contradiction of "insufficient domestic demand"?
How to solve the shortage of domestic demand?
From a macro point of view, the fundamentals of China's economy remain stable, and there is no problem at the big level; However, factors such as insufficient domestic demand, sluggish external demand, and continuous sanctions by foreign forces still affect China's economy.
From a specific point of view, on the one hand, the domestic real estate industry is still sluggish, which affects and hinders the consumption of ordinary people, and on the other hand, it is tired of consumption upgrades, and we are more willing to save money and save money, rather than spending ahead of time.
So, what is the state of China's economy? How do we solve the problem of "not daring to consume"? Today, we will talk about these topics according to the latest data, code words are not easy, welcome to like, forward, favorite.
What is the situation of the "troika" of China's economy?
If you want to know the situation of China's economy, you need to look directly at the data of the troika, that is, the data of foreign trade, investment, and consumption.
Let's take a look at the foreign trade data first. This year's foreign trade, although affected by anti-globalization and the Sino-US trade war, but still achieved good data, from January to May the import and export of goods increased by 6.3% year-on-year, of which exports increased by 6.1%.
From January to May, the export data of foreign trade was good, maintaining positive growth.
Among them, there are not only China's active promotion of the strategic policy of going out, but also the Federal Reserve's release of interest rate cut expectations, the recovery of the national economy in many regions, and the recovery of purchasing power.
Coupled with China's active development of the three major markets of South America, the Middle East and Russia, and the vigorous promotion of the BRICS and the Belt and Road Initiative, China's dependence on developed economies such as Europe and the United States has continued to decrease.
So from this point of view, China's foreign trade is constantly transforming, we have reduced our dependence on Europe and the United States, and instead focused on promoting trade with friendly countries with China. For example, Sino-Russian trade, China-Saudi trade, and so on.
However, there are some problems, such as China's actual use of foreign capital from January to May was 412.51 billion yuan, a year-on-year decrease of 28.2%, which means that the speed of foreign capital investment in China has slowed down significantly.
In order to attract foreign investment, China has expanded the countries in front of it unilaterally
You must know that a country's economic development cannot rely solely on its own capital, the use of foreign capital is very important, which not only means the flow of capital between China and other countries, but also means whether China can absorb advanced technology and investment from other countries through trade, and better restore the economy.
The top management is obviously aware of this problem, so in recent months, we have seen China repeatedly mention that it wants to attract foreign investment, create a good investment environment for foreign investors, and give a lot of preferential policies, the purpose is to attract businessmen and funds from all over the world, so as to use these funds to achieve a win-win situation.
Sino-Russian trade has changed from quantitative to qualitative.
In addition to foreign trade, it is necessary to mention domestic demand, according to the high-level statement, the main contradiction of China's economy is still the lack of effective demand, and this demand, involving foreign demand and domestic demand, external demand is export, as mentioned above, so the problem comes from "domestic demand", that is, consumption.
So, what about China's recent consumption data? Looking directly at the figure below, it can be seen from the data that from January to May, our total retail sales of consumer goods were 1.95 trillion yuan, a year-on-year increase of 4.1%, and 1.76 trillion yuan excluding automobiles.
Growth in China's consumption and food and beverage sectors
If you look at the growth rate, you will find that our consumption growth rate has been relatively high since last year, but from the end of last year to this year's growth rate, in fact, it has been slowing down, which also explains why we feel that the days in recent months are "very sad".
Fortunately, the previous series of good news is gradually taking effect, and we see that the data in May has actually been warped, that is, the consumption situation has indeed improved.
Of course, there are more interesting ones, such as the online retail sales that many people criticize are 5,766.9 billion yuan, an increase of 12.4% year-on-year, and the growth rate is very good, so the recession of the real economy is also a reasonable thing.
Looking at the investment data, according to the data of the National Bureau of Statistics, in the first five months, the national fixed asset investment increased by 4% year-on-year. Maintain a certain growth.
It is necessary to be vigilant that the growth rate of 4% is not high enough, because under normal circumstances, the pull of investment for GDP is generally about 10%, so the problem lies in real estate, and sure enough, the real estate development investment from January to May was 4.06 trillion yuan, a year-on-year decrease of 10.1%, and real estate investment is still sluggish.
In the real estate sector, the growth rate is still sluggish
Based on the above data, we can simply draw a conclusion: under the premise that China's economy is basically stable, China's foreign trade demand has recovered, consumption data has recovered at a low level, and investment growth has been insufficient.
China's structural domestic demand is insufficient, should we break the situation?
It can be seen that if we want to restore China's economy, then how to solve the lack of domestic demand is an unavoidable topic, what we need to do is to restore consumption, stimulate consumption, so as to restore the power of China's troika, so that China's economy can return to the track of rapid development.
So, how do we go about it?
The simple way is actually to directly stimulate consumption, such as the issuance of "consumption vouchers", "home appliances and cars to the countryside", the lifting of real estate sales restrictions, as well as the price war of e-commerce platforms, and tens of billions of subsidies.
The consumption voucher policy is a short-term stimulus
These practices have indeed stimulated the economy to a certain extent and encouraged household consumption, thus helping China's economy and local finances to recover, and have achieved certain results.
However, the sustainability of these practices is very poor, and the consumption that needs to be stimulated will not be stimulated if it is stimulated, but only short-term stimulus policies, and what we need is actually to build confidence in Chinese consumers and help China's economy get out of the lack of domestic demand for long-term policies, and these policies actually involve reforms.
What does that mean? The main reason for the development of China's economy is the growth of the private economy, so once there is a problem in the economy, our policy will release good news to private enterprises and "leave a chance" for these enterprises, and the private economy actually survives and develops in this difficult environment.
Encourage and attract private capital to participate
The reason why ordinary people are reluctant to consume is not that they have no willingness to consume, but that they have no money to spend. And there is no money to spend, mainly because companies are not willing to invest, there are no jobs, job opportunities, etc.
Going a little deeper, it is the state-owned enterprises and the system that occupy a large part of the profit field, but they do not make good use of it, and this is the so-called national advance and people's retreat. Therefore, reform means that state-owned enterprises give profits to private enterprises, so that private enterprises can enter and rejuvenate themselves.
For example, the previous aerospace field in the United States was carried out by NASA, that is, a state-owned enterprise in the United States, but now Musk's SpaceX has entered it, and it can do what NASA can't do with very little capital cost, which is the entry of private enterprises to stimulate vitality. Otherwise, the old men from NASA would still be eating dry over there.
NASA AND SPACEX
And there are more similar things in China, so I won't talk about them here in order to avoid risks, I believe everyone has heard similar cases and examples.
In addition, if the Chinese people are willing to consume, we need to become richer, and this also involves a whole set of institutional reforms.
For example, there are too many civil servant jobs, and the government needs to slim down, save fiscal spending to stimulate investment and consumption, and transfer this money from a large number of people who "eat public food" to the people at the bottom, so as to achieve common prosperity.
The total number of people supported by the system is about 80 million.
For another example, the current reform of the household registration system, the reform of the land system, and the rights and interests of migrant workers, as well as the most basic pension, medical care, etc., are all related to whether we are willing to consume. Judging from international data, the per capita GDP of the Chinese people is actually very low, and we are not rich compared to the people of many countries.
Only by breaking the constraints of many systems can our consumption and domestic demand be active, and the internal circulation can be smoother.
To narrow the gap between the rich and the poor, reform is the right way
In general, the fundamentals of China's economy are actually very stable, and there is no pressure on us to achieve a GDP growth rate of 5% this year.
However, this does not mean that we can sit back and relax, the problem of insufficient domestic demand, in fact, began to be said a few years ago, but it has not been solved until now, which means that we need to think of more ways to carry out deeper reforms, in order to break the situation.
China's economic fundamentals are stable, and the breakthrough depends on the reform dividend
There are still more than 900 million low-income people in China, and the per capita wage income in the mainland in 2023 is 22,053 yuan, with an average monthly income of 1,837, which still has a lot of room for improvement.
In the end, I would like to say that under the premise of stable economic fundamentals in China, we still look forward to more reform dividends, and hope that the gap between the rich and the poor can continue to narrow and benefit more ordinary people.
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