发帖
雷达卡
Chinese economy's future hinges partly on social welfare, consumer spending
**本文摘自Gulf News, 该报是中东地区发行量很大的报纸，为我们多方面、多角度了解中国目前经济形势提供了有益的参考。**
One of the key questions being asked about the world economy is whether China will have a hard or a soft landing
Gerard Lyons, Special to Gulf News
Published: November 28, 2011
One of the key questions being asked about the world economy is whether China will have a hard or a soft landing.
Although no part of the world is totally immune to what happens in Europe, events in China are more important for many. What happens in China is of growing global significance, given its increasing demand for goods and commodities and the impact it has on investor sentiment towards the emerging world.
One challenge with analysing China is that it is easy to compile a long list of negatives. Yet at the same time it is possible to make an even longer list of positives. The negatives should be taken seriously.
The risks need to be taken seriously but it would be a mistake to use those as the sole criteria for determining a business or investment strategy towards China. The key message is that the trend in China is up, but that there will be setbacks along the way.
China's policymakers clearly take the risks seriously. A number of years ago, the leadership identified China's five imbalances: coastal versus inland areas; urban versus rural; social issues; environmental concerns, and international issues. Since then, the focus has been on achieving a more sustainable pace of growth.
The most important thing to fully appreciate about China is the scale and the pace of change. It is breathtaking. China is experiencing an industrial revolution. Despite this, there is still considerable catch-up potential. China is the world's second-largest economy, but its income-per-head is ranked 94th, on par with Albania.
Rapid wage growth, encouraged by policymakers, is not only seen as an alternative to currency appreciation, but also as an incentive for businesses in the coastal areas to move up the value curve by switching into higher-quality exports as well as moving their lower-cost production inland, where land and labour costs are lower and jobs are needed.
All of these factors suggest that we need to be looking at China's upside. So too do some recent policy initiatives. China's rapid pace of change was demonstrated by its 12th Five-Year Plan, unveiled earlier this year. Its clear message was to shift the economy towards domestic demand and away from low-cost exports. Boosting social welfare, consumer spending, the green economy and prioritising seven high-value industries all figured prominently. This plan is likely to lead to a significant boost in spending in these areas in the coming years.
Risk management
In the recent past, China managed its risks well. Yet China is now a $7 trillion economy and, as it grows, it becomes harder to control the economy in the same way as in the past.
Given its scale and complexity, China now requires powerful and independent policy institutions and regulators. The trouble is, it takes time to achieve this. In parallel, China's financial sector needs to develop, and interest rates need to be liberalised to allow resources to be allocated more efficiently. Again, this takes time.
There are more immediate concerns. One is China's local government investment vehicles, which have up to 14 trillion yuan in loans, of which more than 20 per cent are in trouble, and two-thirds of whose projects are currently in arrears. The good news is that liquidity is being provided and a workable solution is in hand.
Inflation has also been a prominent recent concern, but worries over this may now be easing.
With inflation easing, there has been some evidence of policy easing intentions in recent weeks. Meanwhile, central bank bills were recently auctioned at lower rates for the first time in 28 months. There has also been anecdotal evidence of targeted credit loosening, especially aimed at small- and medium-sized enterprises.
Although leverage in China is relatively low, there has clearly been some speculative borrowing linked to property.
There is still concern about property prices. Although prices have either stagnated or started to ease recently, they remain high in first-tier cities, including Shanghai and Beijing.
Despite all these issues, China's biggest challenge is its high overall level of investment. But it is possible to have too much of a good thing, and an investment level of around 45 per cent of GDP suggests that this may already be the case.
The trouble is, at these high levels, any downturn in the investment cycle can slow an economy sharply.
Given the external headwinds, it would not be a surprise if China slowed to around 8 per cent in the final months of this year and the first quarter of 2012. But then the economy should get a boost from the policy stimulus. As a result, China's economy can grow strongly next year, by around 8.5 per cent, and by 6.9 per cent on average over the next two decades, allowing for its ageing population.
All this should put in perspective current market worries. These should not be ignored, but they do need to be kept in context. After all, a few years ago in Beijing, the story was that when officials were asked whether China would have a hard or soft landing, their reply was neither. Instead, they said, all the repairs would be made in mid-flight!
Dr Gerard Lyons is Chief Economist and Head of Global Research at Standard Chartered Bank
京公网安备 11010802022788号
