Export data for August, with a year-on-year increase of 8.7%, looks good.
However, exporting well may be the opposite of how we feel, and we feel that the economy is bad.
Why is this so?
This starts with path dependency.
First, the benefits of export orientation
In the early days of reform and opening up, we were poor and white, how to achieve take-off?
One obvious way to do this is to expand production.
Because of poverty, everything is scarce, and as long as it is produced, it will not worry about sales.
At that stage, my productivity was very low, and in order to improve production efficiency, we needed to bring in foreign capital and learn from them.
At the same time, we also need to invest a lot to build factories, so the amount of money supply is quite large.
In order to catch up with and surpass the developed economies, we need to make our products price competitive, so suppressing prices and household incomes is a must.
This is the primitive accumulation that every developing country must make to achieve transcendence, and the price that must be borne in order to accumulate.
At this stage, although the income of residents accounts for a low proportion of GDP, the income is also increasing with economic growth, that is, it is in an incremental state, so the contradiction between residents and management is not large.
That's the benefits that exports bring us!
Second, the disadvantages of exports
Can exports continue to grow rapidly?
Obviously not.
As we expand our product line, we are able to export more inexpensive products.
At this time, the contradiction comes.
First, except for high-end products, we can't produce all other products, which are very competitive in the international market, and can directly force local manufacturing companies in other countries to death.
Second, precisely because the products that can be produced are already abundant, and the industries in which we can invest in expansion have been greatly reduced, it is no longer appropriate to continue to drive the economy through investment.
Third, the industries of overseas countries are threatened by us, so we have begun to impose tariffs, and trade frictions have been escalating.
It's interesting at this point, because if we continue to roll internationally, we have to further reduce costs in order to offset the side effects of tariffs.
So does the matter of domestic deflation make sense?
To put it bluntly, we are using a restrained way to curb prices in overseas rolls.
Then, the lack of domestic demand is logical.
This is also the strange phenomenon of this year: the more vigorous the exports, the more sluggish domestic consumption becomes.
Therefore, every time overseas trade frictions escalate, as long as the management still wants to roll up exports, it will suppress domestic demand.
At the moment, there are actually two choices: either domestic demand or exports.
I still want to have both fish and bear's paws, I'm afraid... Difficult... (Unless we innovate quickly in high-end manufacturing and technology)
Third, the tear of prices
In recent years, overseas prices have generally risen, while domestic prices are like a dead fish.
Then, the question arises.
The lower our prices are and the higher our overseas prices, the more we will increase our export advantage and make overseas countries hostile to us.
However, we are reluctant to settle the money we earn from exporting and return to China.
Therefore, it is surprising that domestic asset prices can rise.
Fourth, path dependence
We've been using this approach for almost 30 years.
Every time the economy doesn't work, it's doing this, and it's all going to the production end.
Of course, it will be produced and sold smoothly, and the income of residents will also increase.
But it doesn't work anymore.
Now if you want to sell your products, you have to suppress people's incomes and prices, otherwise your products will not be price competitive.
What used to be a win-win situation is now a zero-sum game.
But the development of everything carries a certain inertia, and so does policy.
In the past two years, our policy has continued to emphasize the development of new quality productive forces.
There is nothing inherently wrong with this.
Think about Japan back then, because it lost in high-tech and mobile Internet, so it has never been able to get up.
However, completely ignoring domestic demand may not necessarily be correct.
Our policy is usually to find this balance through trial and error.
Looking back at history, it is also like this to feel the stones.
And every time we have made a decision to make a radical change, it has been when the situation has reached a certain extreme.
I don't know if management thinks it's extreme right now.
Of course, any change is fraught with difficulties, and this one is no exception.
Balancing short-term and long-term interests is a great test of management's ability, and this is probably the first time they have faced it.
Finally, we must also realize that the development of new quality productive forces is indeed very important, and if we fail to pass this hurdle, we will enter the middle-income trap.
Don't look at me so vigorously analyzing here, but after all, I just stand and talk without back pain, and I don't have to take responsibility for speaking.
And the people who make decisions are responsible, so empathy, they do need courage, wisdom and scheming to leave the original path and take a new path.
So, from my personal point of view, in addition to hoping for a smooth transformation of the country, I am just a melon-eating masses.
Many friends may be most worried about the stock market.
The stock market is not the same as Chinese football.
When the stock market is undervalued, there is only the risk of volatility!
It's only a matter of time before it rises.
As an ordinary person, in the end, there are only two endings:
1. Believe in common sense;
2. Admit compensation and leave the market.
The law of the world remains the same, most people will cut meat at the bottom.
If there are not enough people to cut, the stock market will find a way to make them cut.
The reward is voluntary, and 1 cent is silently supported, haha!
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