The economy is facing a historic problem, and all of a sudden it seems that everyone is short of money.
The financial department is short of money, the enterprises are short of money, the people's pockets are even more empty, a steel hammer is eager to be broken in half to spend, income growth is slow, consumer confidence is insufficient, and even the phenomenon of downgrading has appeared.
What are the problems facing the economy today? Why does everyone think there is no money? How do we get out of this situation?
Today we will talk about these problems, it is not easy to code words, welcome to like, forward, and collect.
The historic puzzle is coming
The writer Romain Rolland once said, "True bravery is to still love life after recognizing the truth of life."
At a time when our economy is facing unprecedented challenges, what we need most is to recognize the reality, breed new opportunities from the crisis, and find the right medicine to solve the problem.
What are the current economic problems?
The first is the bursting of the real estate bubble, which directly led to the extinction of the economic model driven by real estate and large infrastructure investment for more than 20 years.
At its peak, the real estate and related construction sectors accounted for 26% of GDP.
According to the data of the Ministry of Housing and Urban-Rural Development, real estate-related loans account for 4% of bank credit business, real estate related income accounts for 5% of local government's comprehensive financial resources, and 6% of residents' wealth is concentrated in real estate.
But now, the real estate transaction volume has fallen from a 21-year high of 1.8 billion square meters to less than 900 million square meters now, which has been halved.
The downturn in the real estate industry has become an indisputable fact, which has naturally caused a relatively large drag on economic growth.
Secondly, foreign trade, one of the "troikas" of the economy, is also under pressure.
After joining the WTO in 2001 and integrating into the global market, China has gradually become the "world's factory", providing various commodities for the global market, especially developed countries such as Europe and the United States.
However, due to many factors such as the intensification of Sino-US trade frictions and the outbreak of the Russia-Ukraine conflict, the United States and Western countries have implemented friendly shore outsourcing policies, and China's exports will inevitably suffer a certain blow.
In the past two years, many Chinese companies have gone overseas on a large scale, transferring production capacity and jobs to Southeast Asia and Mexico, and the fundamental reason is precisely to bypass the trade blockade.
The bursting of the real estate bubble, the sluggish export of the main force of the economy, and the overall internal circulation has not yet been established, and domestic demand is still weak.
Where does the money go?
We often say that we want to "boost domestic demand", but if we want to let the people consume, the premise is, of course, that the wallet is strong enough and the confidence is enough.
So here the question arises:
Both residents and businesses have debts, and their cash flow is tight, so they can't increase their consumption.
Where does the money go?
Let's take a look at one set of data:
According to wind statistics, from 2000 to 2024, a total of 24 years.
The leverage ratio of residents has skyrocketed from 7% to 64%, an increase of more than 9 times;
The leverage ratio of enterprises has nearly tripled from 96.9% to 174.1%;
Local leverage has increased from 4.3% to 32.8%, nearly eightfold.
In other words, in the past 20 years, whether it is local, enterprises, or ordinary people, they have obtained wealth in advance by increasing leverage.
High-speed railways, high-rise buildings, highways, and parks have replaced the green trains, low-rise bungalows, muddy dirt roads, and wasteland, and our living standards have been greatly improved.
But correspondingly, the rapid development over the years is naturally not costly, the leverage ratio continues to rise, and all the debt has accumulated from top to bottom.
In the long run, the debt problem will undoubtedly have an incalculable impact on economic development:
The common people have no money to consume, enterprises have no money to expand production, the speed of money flow has slowed down, and the speed of economic development has also declined.
And this is also the crux of the problem, the root of the breakthrough.
How to break the game?
Referring to the experience of other advanced economies, the only way to achieve long-term stable economic development is to stimulate domestic consumption.
However, at present, we are still following the model of investment and export-led economic growth, and the proportion of consumption in GDP is still low.
In particular, as we have already mentioned, the importance of consumption is clearly more prominent when exports are blocked and investment growth is peaking.
Of course, the premise of consumption is that the people have money in their hands, and how to alleviate the debt pressure in all aspects is the focus of the current breakthrough.
So how can you ease the debt pressure?
Just last month, the high-level government issued a special document, "Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese-style Modernization", mentioning that the Central Committee of the Communist Party of China will appropriately strengthen the power of the central government and increase the proportion of central fiscal expenditure.
To put it bluntly, the state should increase fiscal spending and increase leverage.
The national team leveraged and brought money into the market, reduced local debts, solved the problem of "serial sets", and all links were turned over, so that enterprises and residents could reduce debt pressure and their wallets could become bulging again.
Only when the people have money and are willing to consume can they fundamentally break the situation.
In addition, in order to stimulate domestic demand, increase investment in education, medical care, housing and other areas of people's livelihood, improve the level of social security, increase consumer confidence and ability, and promote consumption upgrading, are all necessary measures.
Whether these two problems can be properly resolved will be the decisive factor for China's future economic development.
Write at the end:
Economic growth is sluggish, it is difficult to break through, and under the predicament, the biting cold air has hit every ordinary person.
However, the more critical the moment, the more we should maintain confidence, and only with the concerted efforts of the whole society can we truly overcome difficulties and push economic development to a new level.
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