[The Epoch Times, July 28, 2022](The Epoch Times reporter Cheng Jing reported) The Political Bureau of the Communist Party of China (CPC) held a meeting today (July 28), requiring coordinating epidemic prevention and control and economic stabilization in the second half of the year. . Recently, China’s economy has declined sharply. Some scholars have proposed that policies must be adjusted if it is to recover in the second half of the year. Some analysts have long believed that clearing zero and stabilizing the economy cannot be both.
General Secretary of the Communist Party of China Xi Jinping presided over a Politburo meeting on Thursday (28th), requiring efficient coordination of epidemic prevention and control and economic and social development in the second half of the year. Especially from a political point of view, to settle political accounts.
The meeting also said that we should do a good job in economic work in the second half of the year, insist on dynamic clearing, fully implement the requirements of preventing the epidemic, stabilizing the economy, and developing safely, and keep the economy operating within a reasonable range. In terms of real estate, it is said to maintain the bottom line of safety in all aspects. Consolidate the responsibilities of local governments, ensure the delivery of buildings, and stabilize people’s livelihood.
China’s economy has fallen sharply recently. According to official data, the economy grew by 4.8% in the first quarter of this year, 0.4% in the second quarter, and 2.5% in the first half of the year; while Shanghai, the economic center of China, saw its GDP drop by 13% in the second quarter and 5.7% in the first half.
Since the beginning of this year, Shanghai, Shenzhen, Beijing, Jiangsu, Guangdong and other provinces and cities that contribute the most to the economy have implemented the dynamic zero-clearing policy for a long time, resulting in economic shutdown and frequent secondary disasters.
Regarding the rapid decline in economic growth, especially in the first half of the year, Yao Yang, dean of the National Development Institute of Peking University, believes that “there are two main reasons, one is epidemic prevention, and the other is the sharp decline in real estate.”
Scholar: Virus cannot eradicate “coexistence” is a scientific problem
According to the Peking University National Development Institute think tank on the 28th, Yao Yang said at a forum in mid-July that for China’s economy to recover in the second half of the year, a long-term epidemic prevention mechanism must be found.
“If this cannot be done, the economy will not be able to recover stably,” he stressed. “The virus cannot be eradicated. This is a scientific problem.” “Humans will eventually coexist with the virus, and this is also a scientific problem.”
Yao Yang suggested that the current “social clearing” should be changed to “social activity clearing”, that is, people participating in economic activities should not be infected; the monitoring should be accurate to the unit of residential buildings; no large-scale remote isolation; All codes in the country are unified; international travel is open.
Yao Yang said that China cannot be isolated from the world, and no one can predict when the epidemic will end. For those who come from abroad, prevention and testing are still required, but the existing epidemic prevention measures can be appropriately relaxed to facilitate everyone’s travel.
Real estate shows a cliff-like decline. Scholars: “Three Red Lines” are the main reason
Yao Yang also said that the second reason for the decline in the growth rate in the first half of the year was the cliff-like decline in real estate. Since the proportion of real estate in GDP is too large, it is very difficult for other industries to make up for the “pit” dug by real estate without excessive growth.
In the first half of this year, the real estate sales of the top 100 real estate companies fell by 51%, which has never happened in history. S&P Global Ratings updated its latest estimate yesterday (27th) that real estate sales in mainland China will plummet by about 30% this year.
Some people say that due to changes in China’s demographic structure, real estate has entered a period of adjustment. Yao Yang believes that this may be a long-term factor; others say that there is a sharp drop in the short-term or the real estate debt is too high, but Yao Yang said that even if the debt is high, if there is no external force to promote it, There will be no “avalanche” either.
Yao Yang believes that the main reason is the “three red lines” policy, and this mistake must be acknowledged and corrected as soon as possible.
“Especially in the first red line, it is proposed that the debt ratio after deducting the pre-sale payment cannot exceed 70%. The third red line requires that the cash-to-short-term debt ratio should not be lower than 1, which is puzzling”; he believes that real estate credit should be viewed correctly, High debt ratios are characteristic of the real estate industry.
The “Three Red Lines” started when the central bank of the Communist Party of China and the supervision department of the Ministry of Housing and Urban-Rural Development held a symposium on key real estate companies in August 2020, and put forward three regulatory requirements, including: the asset-liability ratio excluding advance receipts shall not exceed 70%, and the net debt ratio shall not exceed 70%. 100%, the cash short-term debt ratio shall not be less than 1 times.
Yao Yang also said that to achieve the annual economic target of 5.5%, the second half of the year needs to grow by 8%, which is “very difficult”, and “it is also very difficult to reach 6%”; he believes that it is necessary to correct the epidemic prevention policy and adjust the “three red lines”. “Otherwise, other problems caused by the severe economic downturn cannot be ruled out.
What is the mystery of Xi Jinping’s “political account” for clearing and stabilizing the economy?
Xi Jinping has emphasized many times before that clearing zero and stabilizing the economy go hand in hand. Some analysts believe that the two cannot have both.
“Jin Shan” (pseudonym), an economic commentator in mainland China, once told VOA that insisting on “dynamic clearing” is the biggest obstacle for China’s economy to get back on track. edge.
At the meeting of the Political Bureau of the Communist Party of China, Xi Jinping also emphasized that the relationship between “epidemic prevention and control and economic and social development work” should be viewed in the long-term, especially from a political point of view and political accounting. But why the political account? There is no official explanation.
In this regard, current affairs commentator Wang He analyzed the Epoch Times on the 28th that China’s economy was bleak in the first half of the year, and the voices of accusing “dynamic clearing” are getting louder. The 20th National Congress of the Communist Party of China is about to be held. “Clearing”, how is Xi Jinping’s political account calculated? There is a lot of mystery in it.
The first is the fear of the trend of the epidemic. Wang He believes that the Xi authorities may have vaguely realized that “the virus is targeting the CCP”.
On April 19 this year, at the press conference held by the Joint Prevention and Control Mechanism of the State Council of the Communist Party of China, Wu Zunyou, chief epidemiologist of the China Center for Disease Control and Prevention, said that in the future, the mutation of the virus and the development direction of the epidemic are likely to increase infectivity and cause disease. It may develop in the direction of weakening sexuality, and it may also develop in the direction of increasing infectivity and pathogenicity.
Wang He said that the Xi authorities have been worried, afraid of when the epidemic will break out on a large scale, and that it will directly kill the CCP, so they insisted on “dynamic clearing”. It seems very irrational to the outside world, but the CCP seems to have some understanding in its heart, but it will not say it.
Second, despair over their own vaccines and biomedical technologies. Wang He said that at the beginning of the epidemic, the CCP was full of confidence and started a vaccine competition with the West, thinking that it would win by preparing in advance. But judging from the situation for more than a year, the CCP has failed miserably in the vaccine race.
Third, the phobia of admitting mistakes. Wang He said that the CCP never admits mistakes and maintains the image of “weiguangzheng”. Due to the wrong things it has done, it has done so many bad things that it is too many to list. During the sensitive period of the 20th National Congress, it was worried about the domino effect, which could lead to one collapse or all collapses. ,out of hand.
Wang He said that at this time, the CCP would not admit it at all, and would not allow the import of foreign vaccines. This is not possible to deal with a large-scale outbreak, and the CCP itself knows it. “Therefore, in the face of a large-scale epidemic that may come at any time, the CCP has no long-term strategy, except for extreme prevention and control and closure of the city. I think this is the core of Xi Jinping’s political accounting.”
Responsible editor: Li Yuan#