There are many signs that the Chinese economy is likely to have a hard landing. (Image source: Adobe stock)
[See China News on December 13, 2021](See a comprehensive report by Chinese reporter Li Zhengxin)Central Economic Work Conference“Stable” is the most prominent keyword, highlightingXi JinpingThe authorities’ view of 202220th National Congress of the Communist Party of ChinaHold this special yeareconomyConcerns about the situation, however, there are many signs thatChina’s economyA hard landing is likely.
The Central Economic Work Conference was held in Beijing from December 8th to 10th. The General Secretary of the Communist Party of China Xi Jinping presided over the meeting. Li Keqiang, Li Zhanshu, Wang Yang, Wang Huning, Zhao Leji and Han Zheng attended the meeting.
The meeting demanded that “Next year’s economic work should take the lead and make progress while maintaining stability….. Actively introduce policies conducive to economic stability”; “Strive to stabilize the macroeconomic market, maintain economic operations within a reasonable range, and maintain overall social stability. To welcome the party’s 20th victory.”
The word “stable” was mentioned 25 times in the conference, but only 13 times in 2020.
The meeting also mentioned that economic development is facing the triple pressure of “demand contraction, supply shock, and weakening expectations”, highlighting Xi Jinping’s concerns about the economic situation in the special year of the 2022 CPC National Congress.
Tang Xinyuan, a special commentator for “Watch China”, pointed out that the most important meeting on China’s economy is the annual CPC Central Committee Economic Work Conference. This year’s CPC Central Committee Economic Work Conference is particularly critical because it faces increasing pressure from the outside world and China. The economy has shown signs of recession. How Zhongnanhai will set the tone for China’s economic policy next year has become the focus of attention from all walks of life.
In response to the Central Economic Work Conference, Huang Chongzhe, Dean of Taiwan Financial Research and Training, put forward his views: “What is missing, what is missing!”
According to a report by Radio Free Asia on December 13, Huang Chongzhe interpreted the unusualness of this economic work conference. He observed that China is now being pulled by two forces. One is Xi Jinping who advocates “common prosperity” and a person who makes money. It must be used as a third channel to give back to the society, and state-owned enterprises must play a more decisive role. However, another force believes that this will cause economic instability. This is based on supporting reform and opening up. The power of the Lord has been a little weaker for a while, but Chinese public opinion has raised doubts about common prosperity again, trying to make Xi Jinping think that it should not be so aggressive.
Huang Chongzhe: “I think the general direction, logically speaking, should reach the 20th National Congress of the Communist Party of China, Xi’s re-election, etc., but before he is re-elected, he began to review the current policies, such as’carbon peak carbon neutrality…impossible After all the efforts have been made, who made the decision to reduce carbon emissions is tantamount to a review of the big boss.”
Li Jin, the chief researcher of the China Enterprise Research Institute, wrote an article that the Central Economic Work Conference’s description of “stable words and progress while maintaining stability” is extraordinary. The reason is that China’s economic recovery is uneven and the downward pressure on the economy has increased. , And there are uncertainties in the epidemic situation and the external environment.
Li Jin pointed out that this imbalance is mainly manifested in that this year’s external demand is significantly better than domestic demand, upstream industries (such as kerosene) are significantly better than downstream, large and medium enterprises are significantly better than small and micro enterprises, and industries are significantly better than service industries.
However, China’s GDP growth has fallen to 4.9% in the third quarter of this year, and will not unexpectedly fall below 4% in the fourth quarter. Next year is still in the shifting period of economic growth, and the endogenous growth momentum has weakened. “If this trend does not take greater measures to intervene, there is a risk of a hard landing.”
According to a report by Bloomberg, economists said that the Beijing authorities’ restrictions on the real estate industry are expected to continue. Compared with the sudden measures taken this year to control the technology, education, and entertainment industries, there may be fewer regulatory surprises.
Standard Chartered Bank Greater China chief economist Ding Shuang (Ding Shuang) said that next year’s fiscal policy is expected to play a major role in supporting economic growth, and real estate-related policies may be fine-tuned compared to major changes.
Due to the intensified recession of the real estate market, weak consumption growth and repeated outbreaks of the COVID-19 epidemic, China’s economy has slowed in recent months, damaging the confidence of businesses and consumers. The Central Economic Work Conference’s comments on the relative hawkishness of the real estate industry show that the real estate market will continue to drag the economy.
Analysts headed by Barclays chief China economist Jian Chang pointed out in the report that the call for countercyclical policies (stability policies) is the first time the Chinese authorities have used the term this year. Analysts believe that this move should help ease market concerns about a sharp slowdown in economic growth.
Economists predict that China’s economic growth this quarter will slow to 3.1%, down from 4.9% in the third quarter and 7.9% in the second quarter. China’s official GDP target for next year will only be announced at the annual meeting in March, and analysts predict that the authorities will take more measures to ensure growth of around 5%.
Larry Hu, chief China economist at the Macquarie Group, wrote in a report that policymakers will start with “conventional” monetary and fiscal tools, such as cutting bank deposit reserves and accelerating infrastructure spending If these efforts do not yield results, the authorities may relax restrictions on the real estate industry and local government debt.
Editor in charge: Xin He Source: Look at China
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