[Epoch Times, March 17, 2022]On March 15, the National Bureau of Statistics of the Communist Party of China released economic performance data from January to February, saying that “the recovery of the national economy is better than expected.” This statement is very slippery, without saying what “expected” is, naturally you can arbitrarily make up and say “better than expected”. However, even from the analysis of official data (regardless of its authenticity), the actual situation of China’s economy can be described as a cold wind. This article only touches on two points.
The real estate industry has entered an inflection point in 2021, and the current stimulus measures cannot stop the decline, at most they can only reduce the decline
From January to February, the national real estate development investment was 1,449.9 billion yuan, a year-on-year increase of 3.7%; the housing construction area was 7,844.59 million square meters, a year-on-year increase of 1.8%. Real estate development investment seems to be still growing, but the following two data show that this “growth” cannot cover up the substantial “decline”: the newly started area of housing was 149.67 million square meters, down 12.2%; the area of housing completed was 122 million square meters, Down 9.8%. It can be seen that the investment growth is mainly due to “guaranteed handover” (the continued construction area increased by 380 million square meters over the same period last year, bringing an increase of 140 million square meters to the total construction area), while the decline in the completed area shows the pressure of “handover” It is getting bigger and bigger, and the new construction area continues to decline, indicating that the real estate market is shrinking.
Look at home sales. From January to February, the sales area and sales of commercial housing fell by 9.6% and 19.3% year-on-year, and the growth rate of cumulative sales and sales area has been declining for one consecutive year. Among them, the average sales of TOP100 real estate companies was 10.3 billion yuan, a year-on-year decrease of 34%, of which 30 real estate companies with sales exceeding 10 billion yuan, 24 less than the same period in 2021.
Compared with 2021, the development funds of real estate enterprises have reversed from an increase to a decrease. From January to February, the funds in place for real estate development enterprises were 2,514.3 billion yuan, a year-on-year decrease of 17.7%. Among them, domestic loans were 410.5 billion yuan, down 21.1% year-on-year; foreign capital was 700 million yuan, down 27.4%; self-raised funds were 775.7 billion yuan, down 6.2%; deposits and advance receipts were 802.7 billion yuan, down 27.0%; personal mortgage loans were 4,124. 100 million yuan, down 16.9%.
Please note that although the absolute number of domestic loans has decreased, the proportion of real estate funding sources has increased, from 12% in 2021 to 16%, returning to the same period in 2021. This shows that the real estate loan policy on the financial side has been readjusted from restraint to support under the requirements of the CCP authorities to “seek stability”. But even so, it cannot stop the downward trend.
This downward trend is even more striking on the land side. From January to February, the year-on-year growth rate of the area of land purchased by Chinese real estate companies was -42.3%. In January 2022, nationally, land transfer fees fell by 61% year-on-year, which is a new low since the land auction market weakened in 2021. In terms of absolute amount comparison, the transfer fee in January 2022 is 196.3 billion yuan, the transfer fee in January 2021 is 498.8 billion yuan, and the transfer fee in January 2019 is 478.7 billion yuan. In February 2022, according to the monitoring of Zhuge Housing Data Center, the land transfer fee of major prefecture-level cities in the country was 93.044 billion yuan, a year-on-year decrease of 64.56% and a month-on-month decrease of 16.73%.
It is generally believed that the downward trend of China’s real estate industry chain has not been reversed, and it is still in a downturn; and real estate has a huge impact on China’s economy (it is generally estimated that China’s GDP will increase by about 25% through direct and indirect channels), which shows that in 2022 The Chinese economy is far from optimistic.
From January to February, the total retail sales of consumer goods (7,442.6 billion yuan) increased by 6.7% year-on-year, 5.0 percentage points higher than that in December 2021, and 2.8 percentage points higher than the average two-year growth rate in 2021. According to the official statement, market sales have picked up.
However, from a month-on-month perspective, the total retail sales of consumer goods in February increased by 0.30% over the previous month. The official did not give the month-on-month data on the total retail sales of consumer goods in January; however, the total retail sales of consumer goods in December 2021 increased by only 1.7% year-on-year, a negative growth of 0.18% month-on-month. Moreover, the urban surveyed unemployment rate in February was 5.5%, an increase of 0.2 percentage points from January; the small business PMI (purchasing managers’ index) in February dropped sharply by 0.9 percentage points to 45.1%, hitting a new low since March 2020. These all show that the consumption base of residents is unstable and the recovery is weak. Coupled with the recent severe epidemic situation in many places in China, the prevention and control measures in Shenzhen, Shanghai and other economic center cities have been upgraded to crack down on consumption.
Therefore, if the “Chinese New Year consumption” in January-February is excluded, China’s consumption should be lower. This can be confirmed from the “February 2022 Financial Statistics Report” released by the Central Bank of the Communist Party of China on March 11. According to the report, household loans fell by 336.9 billion yuan in February, of which short-term loans fell by 291.1 billion yuan and medium and long-term loans by 45.9 billion yuan. You must know that since the statistics of Chinese residents’ medium and long-term loans began in 2007, they have maintained positive growth until January 2022.
While household loans fell historically in February, household deposits also fell by 292.3 billion yuan year-on-year. According to the “Questionnaire Survey Report on Urban Depositors in the Fourth Quarter of 2021” released by Bank of China on December 31, 2021, residents prefer to save rather than consume and invest. China’s resident deposits still increased year-on-year in January this year (an increase of 541 million yuan), but in February it became an inflection point, and the year-on-year increase turned negative.
Beginning in February 2022, both household loans and household deposits have declined, revealing that the spending power of the Chinese people is declining. This makes the official “promoting the stable recovery of consumption and returning to the first driving force of economic growth” (March 1, Minister of Commerce Wang Wentao), “unlocking consumption potential and promoting the continuous recovery of consumption” (March 7 National Development Reform Vice-Chairman Hu Zucai) and so on became empty words.
In fact, insufficient consumption has long been the “big problem” of the Chinese economy. For example, according to data from the World Bank, from 2011 to 2020, the final consumption expenditure of developed countries accounted for 80% of GDP, and that of developing countries also accounted for 70%, while China’s average was only 53.3%; if the government consumption part of final consumption is accounted for After deducting, only calculating the household consumption rate, China is still the lowest among the countries of the same level and its geographical neighbors.
The Chinese should really ask: From the “reform and opening up” to the present, after more than 40 years of rapid development, China has become the second largest economy in the world. Is our income really still low? Why is the consumption of countries at the same level of development much higher than that of China? Where is the problem?
This article believes that China’s “underconsumption” situation epitomizes the oppressive nature of the CCP system. In other words, most of China’s wealth has been plundered by the elite (for example, China’s Gini coefficient is high, corruption and the gap between the rich and the poor are rare in the world). If this does not change, “expanding domestic demand” is just empty talk, and the terminally ill Chinese economy will only have a dead end. To change this, the CCP must be dismantled.
The cold wind of China’s economy in 2022 will hopefully make more Chinese people more sober.
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Responsible editor: Gao Yi#