Under the weak external demand and steady growth in consumption, the speed of economic growth will largely depend on the growth rate of investment. Since May, the central government has issued a number of measures for the steady growth. However, considering the factors such as the time lag of policies, the market predicts that China's cumulative investment growth from January to May this year is likely to fall to 20% or less.
In order to stabilize investment growth, the central government has begun to accelerate infrastructure investment. However, experts believe that China's current expansion of infrastructure investment is limited, and may increase economic volatility. It is recommended that the next step be focused on the precise regulation of real estate, to avoid excessive contraction of real estate investment.
fluctuation
Cumulative increase or break 20%
Considering that due to a variety of factors, the monthly data of the investment fluctuates greatly, so the annual cumulative data is generally used to reflect the investment trend. Since March, the cumulative year-on-year growth of fixed asset investment (excluding rural households) has started to refresh the lowest since 2003, and most institutions predict that this trend will continue in May. Not only that, but the growth rate of more than 20% for a long time is considered to be the appropriate level of investment growth, and the investment data from January to May is likely to break through the bottom line.
China Merchants Securities forecasts a year-on-year growth rate of 19.6% for investments from January to May. According to the analysis of the forecast report released by it, the State Council executive meeting recently emphasized the importance of the steady growth policy, and the NDRC also accelerated the pace of project approval. However, it should be pointed out that the National Development and Reform Commission has clearly denied the possibility of introducing a large-scale stimulus plan, and the real estate control policy has not been significantly loosened. At the same time, we expect the overall fixed investment growth rate to maintain a downward trend in the short term, taking into account the time lag effect of the recent approval of new projects.
Bank of Communications forecasts a cumulative investment growth rate of 20% in the first five months. Tang Jianwei, a senior macro analyst at the Bank of Communications Financial Research Center, told the Economic Information Daily that since May last year, urban fixed asset investment has maintained a steady decline in the same period of last year, and May is likely to continue a small downward trend. Real estate investment has fallen to 18.7% in April from the same period of last year. As the real estate sector has not been significantly relaxed, investment in this sector may continue to decline in May. Although the recent railway construction has a certain degree of recovery, overall, due to poor industrial production, the proportion of short-term financing of enterprises has increased significantly, and the medium- and long-term investment will be poor, indicating that manufacturing investment may still decline. It will take time for the national macro-control pre-adjustment and fine-tuning to be in place. It is expected that fixed-asset investment will remain in a small downward trend in May.
Huatai United Securities said that the accelerated decline in real estate investment has brought about certain negative impacts. Although the manufacturing investment is stable and slightly weak, the investment in infrastructure and social services driven by the “steady growth†policy has not yet been available in May. reflect. It is estimated that from January to May, urban fixed assets investment will increase by 20% year-on-year, which will continue to decline from last month.
expected
Dragging down the economy
As the growth of the main growth momentum of this steady growth continued to slow down, the market's expectation of the second quarter gross domestic product (GDP) growth rate fell below 8%.
Tang Jianwei said that by the first quarter of 2012, China's economic growth rate had slowed for five consecutive quarters, and the simultaneous slowdown in exports and investment was the main reason for the economic weakness in the first half of the year. On the one hand, the European debt crisis has not seen a fundamental turnaround. As a result, the world economic growth rate has continued to fall. China's external demand has continued to weaken, and the year-on-year growth rate of exports has fallen to single digits. On the other hand, from the perspective of the inherent kinetic energy of investment, the growth rate of real estate development investment has slowed down under the influence of uncontrolled policies, poor sales and limited sources of funds; manufacturing investment is affected by international economic weakness, real estate investment and enterprises. The decline in earnings was lower and affected.
From the perspective of industrial production, the year-on-year growth rate of daily average power generation, steel output, and crude oil processing volume declined in April, which caused the year-on-year growth rate of industrial added value to drop significantly in April, and the growth rate hit a new low in recent years. It indicates that the production and operation of the company is not good. The economic growth rate in the second quarter may still be low. We have lowered the economic growth forecast for the second quarter to around 7.8%. The domestic economic situation in the first half of 2012 was more severe. In the short term, the economic operation is still facing four major risks, such as rapid shrinking of external demand, large fluctuations in short-term capital flows, partial breakdown of real estate price bubbles, and partial default of local financing platforms. This should be highly concerned and prevented in advance.
Everbright Securities also lowered its GDP growth forecast for the second quarter from the previous 8.1% to 7.9%.
BOCI believes that China's annual GDP growth is difficult to reach more than 8%. Cheng Manjiang, managing director of BOC International, said: "In view of the continued slowdown in economic growth, we expect the government to further relax fiscal and monetary policies in the future. It is expected that investment in railway, urban infrastructure and public service industries will rebound in the second half of the year. It will provide support for domestic economic growth to a certain extent, but it will not be able to reverse the slowdown of economic growth in the short term. We expect GDP growth of around 7.8% in 2012, and fixed assets investment, exports and retail sales will increase by 16% and 7.2 respectively. % and 15%."
the way
Steady growth must first stabilize investment
From the current situation, steady growth must first stabilize investment. Although for the steady investment since May, the central government has adopted a downward adjustment of the reserve ratio of 50 basis points, speeding up the approval of infrastructure investment projects, and accelerating the central government to support project investment and other means, but the effectiveness may not be enough. Bohai Securities analyst Zhou Xi said: "Unlike '4 trillion', this start-up investment is to speed up the approval of the later projects under the established project of the '12th Five-Year Plan', and no other investment projects have been added, so the effect It should not be compared to the '4 trillion' period."
Gao Li, director of the Huachuang Securities Research Institute, holds a similar view. He said that the central government decided in 2008 to increase the budgetary expenditure by 1.18 trillion yuan in the next two years. From the current situation, this year's education and other expenditures require greater rigidity. The more important change comes from the fact that the space for local fiscal expansion is subject to greater constraints: the continuation of real estate regulation has made it difficult for local governments to increase investment by increasing land revenue, while the risk status and regulatory policies of local financing platforms have made it impossible to pass debt channels. Strongly leveraged.
Even if you do not consider the constraints of fiscal re-leveraging space, you should be cautious about infrastructure investment. Gaoli said that although the current "steady growth" policy is faced with many constraints, the enthusiasm of local government projects has been ignited. It is expected that local governments will loosen their own real estate policies to obtain capital for project construction, through off-balance sheet loans, corporate bonds, etc. Forms such as adding leverage will become the main melody for a while. Under China's current macro-stabilization mechanism, it is often “tightened†when tightening, and “refueling†while relaxing, thus aggravating macroeconomic volatility to some extent. Although the government has always emphasized fine-tuning this time, it is expected to face a similar trend.
Cai Zhizhou, deputy director of the Center for National Economic Accounting and Economic Growth at Peking University, also told the Economic Information Daily that if macroeconomic regulation and control over-emphasize the role of infrastructure investment, it is likely that the economic cycle will be artificially shortened, so macroeconomic regulation and control is in a certain sense. It will become an amplifier for economic fluctuations.
Suggest
Precise regulation of real estate
In this case, in order to ensure accelerated investment growth, Liu Ligang, director of economic research at ANZ Greater China, suggested fine-tuning the real estate policy. He said: "We don't think China needs a new round of fiscal stimulus, because a large-scale stimulus may only worsen the current economic structure. The rapid implementation of the policy will accelerate the start-up and investment of planned projects and accelerate the construction of affordable housing. And adjusting the current real estate policy is the most important policy measure currently required by Chinese officials."
Li Daokui, director of the China and World Economic Research Center of Tsinghua University, also proposed to precisely regulate the real estate industry. He told the Economic Information Daily that the real estate industry is the engine of China's economic growth in the past decade, and regulation must be precise. This year's government work report proposes that "strictly implement and gradually improve the policy measures to curb speculation and investment demand", this sentence should be read one word at a time. “My understanding is that local governments need to control investment and speculative needs more precisely, but for real demand, you should not accidentally hurt, the release is released, and the encouragement encourages.â€
Li Daokui said that the real estate problem is a chronic disease caused by the irrational development model of the Chinese economy in the past decade. The governance process of chronic diseases should be moderated, and it must be coordinated with the growth process of the economy. The real estate industry is indeed not adjustable, but the process of this adjustment should be as smooth as possible, the more accurate the better, the best adjustment target should be the price drop, but the transaction volume does not drop significantly. Therefore, we should protect the rigid demand for the first time to buy a house and encourage improved demand.
Fu Bingtao, deputy director of the Macroeconomic and Financial Research Department of the Agricultural Bank's Strategic Planning Department, also believes that the basic housing needs of residents should be encouraged while further curbing speculative demand for investment, but he believes that it is equally important to expand the scope of private investment. He told the Economic Information Daily that the documents that encouraged the entry of private capital were recently released. The Ministry of Railways, the Ministry of Health, the Ministry of Communications, the CSRC, the State-owned Assets Supervision and Administration Commission, the China Banking Regulatory Commission and other ministries have relaxed relevant requirements and encouraged private capital to enter. Although these measures will take time, it will undoubtedly contribute to the sustained growth of our investment.
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