Table of contents
1. Economy: Remains on the left-half of the U shaped curve...............6
1.1 The economy has basically reverted back to normal conditions...6
1.2 Based on the three major industrial chains, the economy will still
move downward in the next two quarters ..............................................7
1.2.1 RMB 4 trillion stimulus will basically end by the end of this year8
1.2.2 Slowdown in the recovery of external demand.............................9
1.2.3 Variables in real estate market have not been eliminated..........12
1.2.4 Leading economic index indicates that the economy has not hit
the bottom...............................................................................................15
1.3 Two major factors are expected to drive China’s economy to reach
the bottom and rebound once again.....................................................15
1.4 Quarterly economic forecast ...........................................................17
1.5 Annual economic forecast ...............................................................18
2 Prices: Overall level has moved up. However, inflation is unlikely.20
2.1 Inflation is not an issue....................................................................20
2.2 Deflation is unlikely too....................................................................22
2.3 Discussion on two issues................................................................23
2.3.1 How we look at rising prices of agricultural products and their
impact on CPI..........................................................................................23
2.3.2 How we look at the impact of rising manpower costs on CPI....26
3 Policies: Currently maintaining stability. In the event that 9% emerges,
efforts will be made to maintain 8%......................................................27
3.1 Policy configuration of, having relaxed and tight policies with tight
policies as the priority, will be difficult to break for the time being ...27
3.2 Looking to the future, the possibility of relaxed policies is higher
than the possibility of tight policies......................................................28
4 12th Five-year plan: Six major adjustments will facilitate
transformation ........................................................................................30
4.1 12th Five-year plan: Realization of transformation through reforms
and adjustments .....................................................................................30
4.2 Adjustment to regional structure ....................................................31
4.3 Adjustment to industry structure ....................................................32
4.4 Adjustment to urban and rural structures – Accelerating
urbanization ............................................................................................34
4.5 Adjustments to income distribution structure ...............................35
4.6 Changes in Trade Development Strategies ....................................37
4.7 Adjustments to demand structure...................................................39