Zhong Dajun Economic Observer
Research Center, Beijing ranks
Editor's note: With the increasingly grim economic situation in China, Beijing ranks Zhong Dajun Economic Observer, Mr. Director of the Center can not help but think that some words have been said. This is an important social situation analysis report, the existence of the current Chinese political and economic crisis in-depth analysis, government and society should be given attention.
In recent years, China's reform and opening up along the 80 routes of policies go ahead and open markets and excessive investment, despite the economic abnormal hot, rich coastal areas up quickly, but the danger signs are obvious. this model if not corrected, China's development is likely to suffer significant losses. So , write these questions in advance and exposed to arouse the attention of government and society.
First, China is suffering from the attacks on the West hot money crack
Western way of Chinese mercantilism
1, dealing with the old China mercantilist development strategy, the West has long response, first printing more money, and second, investment and speculation in China, low-cost acquisition of assets.
over the core of mercantilism performance is less consumption, more production, more savings , more exports, fanatical pursuit of GDP and export. the means to belittle their monetary value (that is, reducing the value of domestic goods and assets) to increase exports, development of a large number of investment preferential policies to attract foreign investment. This development strategy benefits to improve their international competitiveness of national products to make their own in the international market and the status of a seat.
mercantilism, but there are many drawbacks, the biggest drawback is that large numbers of low-cost domestic resources outflow of the first performance of this outflow Since the yuan is undervalued in the result of cheap goods, the second performance in the large trade surplus. China has become the third largest exports and imports, the largest surplus country in recent years, China's trade surplus with the United States increased to more than 2000 billion U.S. dollars, an annual trade surplus with the EU over a billion dollars in 1000 on top of.
Looking at the history of the world economy, a country like China has never been so cheap or even free of charge so that exporting resources to also so far not seen a country like China with the high savings. this model, the high rate of economic growth, increasing national wealth are many, but on the resources and the environment is a huge consumption, and, under accumulated foreign exchange reserves and With the depreciation of the dollar vulnerable to naught.
early mercantilist capitalist countries could have been used during the development of a means of reform and opening up, China still love the proper use of this tool can be original, but because of China adjustments to this policy, too late, the current economy has made a greater risk.
the main thing is: Western countries have long had to deal with such a strategy means to break, that is more than one print money [1], two funds into China, and wantonly to buy cheap assets of RMB and China, and is poised to cash in profits. from the exception in recent years, soaring foreign exchange reserves, we can see the hot money in China is suffering from the attacks on the West! from the end of the 280 billion U.S. dollars in 2002 to 1.32 trillion U.S. dollars today (June 2007), little more than four years time, foreign exchange reserves increased more than fourfold. the first half of this year alone, China's foreign exchange reserves increased by 260 billion U.S. dollars to .
Zheliang Zhao, but powerful, like the Monkey King got into the enemy's stomach, the large number of foreign exchange into yuan into China, the oppression of the Chinese yuan appreciation, China and the withdrawal of hot money again, so that devaluation of the Renminbi. These tactics already used in other countries, but kept secret. The illusion is always revealed.
example, the U.S. pressure the Chinese yuan appreciation, this approach is market speculation the government funds closely. Western governments and speculative capital just as two Deva kings, with the tacit understanding that a speculation in the market, a political pressure from the ultimate goal is to obtain the wealth of China.
late appreciation of the Chinese yuan, if properly appreciated as early as four years ago, that does not mean by an external hot money speculation. now substantial appreciation of the RMB, it is precisely in the western hot money trick. even more tragic is that the Chinese government decision-making in internal and external interests on behalf of those who occupy a dominant position, to cause their own interests and suggestions may sound less than the adoption and implementation. before the reform and opening up over a rightist, in essence, China has greatly damaged the country's real interests.
2, our center has long been suggested that the Government's development strategy to correct the error, but not adopted .
recommend to the Central Government of the earliest changes in the mercantilist development strategy is the army of private research institutions, Beijing Research Center of the Economic Observer, January 10, 2003, the center was held at the Ocean House, , Hu Jiangyun and so participated in that meeting (at the time notified peace Xie Yi Gang, because they will not come into the central bank). I submitted a conference entitled the adjustment of thinking that our development strategy, and other means to protect the domestic resources of cheap flight, to prevent the influx of international speculative capital. But this far-sighted policy recommendations earliest articles, look at the top and the departments concerned and after extensive discussion, was shelved. details please visit our center Site www.dajun.com.cn 111zxxw3.htm (> Next, I am worried about what really happened, the end of 2003, huge foreign exchange reserves of more than 1,000 billion dollars by 2004, and 2005 is the rapid growth in a short period of 4 years and a half years, China's foreign exchange reserves by the end of 2002, 2,800 billion dollars to 1.3 trillion U.S. dollars today.
more than 9,000 million increase in the foreign exchange reserves out of an estimated 4,000 billion foreign trade surplus is created by the remaining 500 billion rely on hot money and capital account items created. speculative hot money which at least 4,000 billion U.S. dollars. In other words, in January 2003 the Center Ocean Plaza 4 years after the meeting a little more than a short time, the foreign speculative capital rush to 400 billion U.S. dollars at least.
the 400 billion U.S. dollars to exchange with RMB, based on the need to issue 3.6 trillion yuan currency. It is the multiplier effect of 3 times, if so, is equivalent to the increase of the 10 trillion yuan in China to liquidity. China pop up that much money, is a good thing, a bad thing. The good news is community money, banks can lend money to, can stimulate the Chinese economy. With the significant increase in the amount of money, since 2003 began, China set off an unprecedented economic development and growth.'s largest investment performance of huge growth. At present, total investment in projects under construction in 36 trillion yuan. This is a combined effect of domestic and foreign construction off and speculative wave.
During this period, although the Government has taken various measures to suppress the amount of money, but did not live to curb the entry of speculative capital. In recent years, China's M2 growth rate of about 18% annually, but Since the second quarter of 2006, the growth rate of M3 has been faster than M2, which reflects the financial and capital market related assets (such as open-end fund, the bonds held by non-financial institutions) in the rapid accumulation, but also reflects the amount of money The rapid increase in the degree. In the past growth rate of M2 growth rate is consistent with the M3, but since the second quarter of 2006, M2 and M3 growth began to split, M2 growth rate slowed down gradually, while the M3 growth rate is now approaching mid-2003 the highest level since, which resulted in China's stock market rally.
M3 money supply is M2 plus deposits of non-bank financial institutions (some non-customer deposits), securities issued by financial institutions. In other words , M3 is equivalent to the entire banking system (including central banks) the sum of financial assets. M3 growth rate of the most truly reflect the adequacy of the amount of money.
present, Shanghai and Shenzhen stock indices around sideways in 4000, again in the second half is likely to impact on 5000 points or 6000 points of attack. from real estate, the stock market to the art auction market, everywhere you can see the spread of liquidity. Western excess liquidity, has wrapped the snake's neck, the Chinese economy, with these words to describe the characteristics of the Chinese economy, not too much.
the concept of taking advantage of the 2008 Olympic Games, they display their fists in a market, real estate and business assets are also a large hot money-infested battlefield.
4, assets and speculative buying has driven economic growth, a heavy burden to ordinary consumers
such a large number of foreign into the cause of foreign capital in China a substantial increase in the proportion of GDP. Currently, an estimated 40% of our GDP is created by foreign investment. This is a dangerous country in any proportion. This means that, despite China's rapid economic growth, GDP expanding the scale of values, but a considerable proportion of the development results into the hands of outsiders, the economic lifeline has been the risk of foreign control. But more dangerous is that speculative funds outside the economic volatility.
the yuan is seriously undervalued, domestic goods prices and asset prices below their real value seriously, which led to a global rush to buy China. A few years ago, China's annual trade surplus with the United States is more than 1000 billion U.S. dollars to 240 billion last year, actually dollars each year on the EU trade surplus is more than 1000 billion dollars. If there is no trade with China benefits from the United States and Europe will never buy so many goods in China.
addition to buying the goods, that is, buying assets, since 2004, Foreign Investment in Shanghai's real estate market has been speculation and panic buying, so that Shanghai housing price inflation .2005, the foreign investors to buy into China's real estate assets nationwide. Beijing, Qingdao, Shenzhen and other cities have become the entry and exit of speculative capital place.
It is because of the participation of foreign capital and speculation that China's housing prices rose rapidly in people unbearable. At present, real estate, real estate prices has largely excluded the Chinese consumers. This speculation the largest consequences of increased cost of living of ordinary people in China to make more difficult the lives of domestic residents, along with rising discontent.
However, this wave of speculative capital driven by the rising real estate prices continued, with Shanghai as an example the past 3 years, every introduction of a price real estate, housing prices will lead to follow up the surrounding area. like Tomson Riviera, property prices have already sold 11 million square meters, followed by the rapid rise in property prices around thirty or forty thousand yuan a square meter. The back of sky-high price of real estate, developers are often foreign or overseas capital in the operation.
Shanghai has become a bridgehead for foreign investment in Chinese real estate, but also foreign investors in China real estate one of the most urban agglomeration .2007 in the first half, Shanghai's housing prices began a new round of prices, foreign investment to promote the role of this round of the Shanghai housing prices especially broad based and foreign-funded from backstage, the real housing prices in Shanghai promoter. This year, business investment in Indonesia's Salim million transformation of the along with Shenzhen and other cities. Shenzhen property price from 5,980 yuan / square meter rose to 9300 yuan / sq m in two years. But this year, the Shenzhen property market prices suddenly accelerated, according to the Shenzhen Land Resources and Housing Authority statistics, As of June 21, 2007, the Shenzhen property market average price of 15,487 yuan / square meter, 1,264 yuan higher than in May. And in January of this year, the Shenzhen property market price is only 10,670 yuan / square meter, in half a year ago, Shenzhen skyrocketing housing prices by 50%. with reference to the speed of 100 square meters at an average price of buying a new house, you can earn 126,400 yuan a month, half earn 50 million. At present, the Shenzhen customs, the new disc the average price has exceeded 2 million yuan / square meter. in Luohu District, up to 5 yuan / square meter almost equal to Hong Kong's suburban house in Yuen Long.
recently saw 20-30% monthly rise, the value of houses reached historical high. Currently in China, everywhere you can see the shadow financial predators speculation.
5, the formation of the bubble economy, the overproduction and recession a matter of time problem.
this result by the speculative economic overheating in China is still thriving at present carried out, but this real estate and heavy industry to bear the brunt of economic development for the existence of a large number of false needs. to the current real estate , despite the majority of the houses built to sell, but can really live the Master estimated that only 50% of the amount of vacant and idle housing is huge.
few days ago I went to Hangzhou, Ningbo, Zhejiang area study found that both the real estate industry or industries (machinery industry), there the problem of excess production, there is the issue of investment efficiency. Beijing Shanghai is the same, to see that going up a piece of Beijing high-grade office buildings, if No hot money is certainly not support such a high speed.
a result of this speculation and the speculation has not yet peaked, the event can sell out, once the Scoop certain height, fall in property prices, real estate fever, steel, cement, chemicals, home appliances and other industries will follow will be a fever In 2009 the threat China faces overproduction in the first year. If you also took the opportunity at this time withdrawal of foreign capital, China's high economic growth cycle has ended. resulting return on investment issues, bad bank loans and other issues will emerge. China is likely to occur there have been one of Japan's 10-year-long recession.
in this recession, China will not only plagued by economic problems , will lead to political dissatisfaction and social crisis. the resulting political problems will be exposed.
the next few years, the test must be the year of the Chinese government regulatory capacity. If well managed, China can out of the woods, and opportunity to leap onto a higher level. If properly regulated, China may become another is the Western countries against China's mercantilist strategy of taking a turn on the water policy of monetary easing. Since the mid-90s, the Greenspan Fed will increase Pan Zhuzheng currency issue, this loose monetary policies have not only the stock market rally , house prices rose, imports and trade deficit also rose. Over the years the trade deficit between China and the U.S. remain high, nearly 10 years, China's trade surplus into the U.S. enough to have more than 1 billion. that the Chinese extra output to the United States about 10 trillion yuan of physical goods, is equal to lend the U.S. 10 trillion yuan of loans.
this phenomenon, the Americans made it very easy: goods, we are willing. increased depreciation in previous years will accumulate foreign exchange reserves in China are gradually worked so hard to shrink.
This is the last few years, international hot money and speculative capital into China desperately reasons, in addition to increasing the value of the yuan, as well as arbitrage and speculation in China and other attempts. However, China failed to foresee long, early preparations, in particular, to miss important changes in 2003 that opportunity.
center in early 2003, I proposed the rapid appreciation of the yuan to the central time the basic operations of international hot money has not, and if in that year due to appreciation of the renminbi, and the adjustment of domestic policies, they can greatly curb the subsequent influx of external crazy speculative funds.
but I can clearly say that was the main China's leaders do not have a political sensible. I can openly criticize the then Premier Zhu Rongji, he did not have this awareness. When I make recommendations, he also believes that at least 400 billion U.S. dollars and other foreign exchange reserves reached after adjustment ( This was the People's Bank Xie Ping, the Secretary for Financial Research on the phone told me). but the content of external funding the Chinese government did not have any breathing space to adjust and quickly put China's foreign reserve hit 1.2 trillion U.S. dollars.
It is not the vision and foresight of the Chinese Government, in particular, is not ready, that has caused such a passive situation today. revaluation of the yuan should not, because more than 4,000 billion U.S. dollars of speculative funds have been drilling here. appreciate too rapidly, which hot money will be awarded to a Great Escape, and a large devaluation of the Chinese foreign exchange reserves, equal to the foreign creditors to lend China naught.
7, from the external liquidity is a result of inflation in China
looting the wealth of view of this, China's dilemma. If you do not adjust the RMB exchange rate, domestic inflation by means of the yuan to appreciate. However, domestic inflation will lead to a dramatic domestic economic and social fluctuations, the development of a country is negative. For example, domestic prices as early as five or six years ago on the rise, but mainly in real estate, art and other assets of the field. This year the domestic price appreciation into the daily consumer goods, so that inflation is suddenly exposed. Top 5 month inflation rate reached 3.8% in the year estimated at between 4-5%.
in bank deposits has been completely in the case of negative interest rates, city residents will account for a big move, just in May from the banks to at least 500 billion yuan of funds, these funds poured into the stock market madness, the Shanghai and Shenzhen stock markets rose rapidly from more than 1,000 points 4,000 points.
summarized above, we can see that inflation does not occur in China is not possible The. the past 10 years, China's money supply growth rate remained at 17-18%, and more than inflation and GDP growth rates of and about 7 percentage points. accumulated to this day, the extra money is always self-expression , that is inflation. However, inflation for the average national public mean? that is bankrupt, and life even more embarrassment.
China has the capacity to resist risk families is estimated at 20%, accounted for relatively resistant to 30%, there is no resistance to at least 40%. And, according to a World Bank study estimated that at least 10% of China's family life by deposits. This figure is completely reliable, even conservative, because China's current unemployment rate around 10%. When a person is unemployed, the savings only by the family to live.
the event of higher inflation, they can instantly make the kind of family property disappear, make them into trouble, The resulting social problems will increase the social crisis. However, this liquidity resulting from inflation is an objective reality, the current is only just beginning, the impact of its future was far into the start. In any case, we China's inflation to see today is not the result of domestic reasons, but simply caused from the outside, this is a Chinese silent plunder of wealth.
8, China's 10 trillion yuan Most of the foreign savings will vanish, which the future of pension insurance in China formed the biggest threat!
can be seen from the above analysis, the current problem is the Chinese economy over the mercantilist development strategy formed the consequences. Western countries can be said that only one account, they break China's mercantilism, that is, printing money and investment, speculation in China, with notes in exchange for a large number of physical and assets of a large number of speculative capital into China, cheap to buy real estate in China , stocks, etc. after the RMB appreciation, and then wait for an opportunity to escape the Chinese currency exchange, devaluation of the renminbi again for air to China. This has become a favorite trick of developed countries plunder.
which happens earlier in our government did not see this, do not know the power to print money the United States rests in the hands of others, do not know that the world has long been out of the gold standard era, also spared no effort in the implementation of way to accumulate wealth. I did not expect a large number of those years abroad after the output of domestic resources, in return for the rapid depreciation of paper money are likely to pile of waste paper, so that China's development ��:��ˮһ����.
these years, The savings of the existence of two ways, a domestic savings, that is, domestic bank deposits, and second, foreign savings, which is foreign exchange reserves. domestic savings is about 25 trillion yuan, foreign savings is about 10 trillion yuan. However, the sharp depreciation of the dollar, China's foreign savings would be wiped out. at this point, few people see clearly that the domestic savings abroad, the risk is still spare no effort to implement the development strategy of export-oriented mercantilism.
10 years, the RMB against the U.S. dollar has appreciated by about 20%, that China's foreign exchange reserves have been depreciated by 20%. But the yuan against the euro has depreciated by more than 20% measured in euros, foreign exchange reserves has shrunk even more sharply, about 40%. so many years of foreign loans to slowly disappear in this appreciation. the next three years, the real value of China's foreign exchange reserves will continue to shrink significantly. This will resolve out almost ten years of our people suffer Cincinnati hard labor of saving it. This is our implementation of the old mercantilist development strategy, vigorously pursued the biggest consequences of opening up!
one-child family planning in China is a country, in this historical period, there will be a lot of people savings accumulated for future use aging society, but the accumulation of foreign reserves in the form of national wealth will soon disappear. This form of old age a great threat to society, which will result in 10 to 20 years After clearly apparent.
9, the emerging crisis! China's important task is how to absorb hundreds of billions of hot money!
this error to a large extent on the political line of the previous period, unrealistically optimistic about globalization, over xenophilia, returnees and a guest scholar became an important government promoted the object, the whole organization down the path of a way to absorb the Western elite. and these people only know how to blindly copying the West and did not study the actual situation and identify problems, as then, like the Wang Ming line.
This is the crisis of China's future development of the important reasons, namely, the development strategy of the serious mistakes. Fortunately, the Government has taken this action today, such as the elimination of export tax rebates, limiting, Some products processing trade, increase resource tax, increase wages, enhance environmental protection, proper appreciation of the yuan and so on. but you can say for sure that the hands late, the crisis is still in formation. even if no attack in 2008, 2009 or After the attack will. And the way the performance of only two: First, control the fate of the Chinese economy, the massive outflow of economic benefits, colonization of the Chinese economy, the second is bubbling and the short China China, volatility in the Chinese economy, leaving under a pile of mess.
the event of unrest, the elite will flee abroad, hollowed out of China, leaving only the poor to bear the suffering of the Chinese public groups. This trend is expected to be in the years after 2008 will show more clearly .
In this case, how should China do? it is this liquidity as possible for my use of beauty snake, rather than let her .4000 billion came out of international hot money, for China is also a great wealth, if used properly, can accelerate the domestic economic construction, the Chinese economy and foreign dance together, not only to foreign earnings, and China will benefit from them. But if not properly controlled, this beauty will be bitten by snake China.
Therefore, digest 400 billion U.S. dollars of international hot money, China is a major task in the future! to make these funds play in China's domestic real positive effect, but to curb the speculative trouble!
This is a field trip into China in the globalization of the severe test, because China do not have the authority to issue currency, as the dominant world currency is U.S. dollars, therefore, more open China's markets, loss of national wealth and resources, the greater the risk. However, relevant government departments on this risk is not clear, but external resources blindly hope will be the hope of China's development lies in the use of excessive force and opening up the top, but the pay and the resulting loss is much greater than Therefore, to avoid more losses than gains in China's rapid development.
Second, China's political roots of the crisis
1, the elite of Chinese culture have a strong tendency, while the elite are anti-people tendencies.
Why China take a long period of time and resources over an open drain path of development of mercantilism? The reason is that there is an elite group of domestic and external interest group representatives, who actively support and encourage the Government to go that route. liberal market economy, the most elite Group's appetite. but in a developing country to carry out economic-liberal globalization, the end result can only be a small number of elite economic globalization. and economic globalization, transnational capital in the developed countries largely set the trap under a beautiful . Therefore, all the problems China is a lack of public interest groups are constrained to form an elite. more of their global interests at the expense of Chinese labor and resources and the environment at the expense of globalization. They just globalization allow them freedom of the domestic wealth to move abroad.
this group not only emptied the Chinese economy, want to political disintegration of China. This is because there are some people who are from the heart, hate the present government and the regime, from the thoughts and feelings on the anti-public.
However, there is a domestic country and the people against the fundamental interests of the elite group of facts, many people turn a blind eye, the Government did not cause warning, but a large extent, become the embodiment of the elite.
2, China has a non-democratic political system.
fact, the mass of any country has an anti-elite, the reason that they are not the same as China's elite group with a hazard because these countries have a sound power control mechanism, which is the democratic political system. People can check the power of elite groups.
but China is a unitary authoritarian state, in addition to government forces and the forces of social interests can be the balance, the balance of power between societies do not have the mechanisms, especially the civilian population do not have the political conditions for their rights. reform and opening up, China has done political work groups, the biggest thing is the rights of collection, the collection rights of the civilian population. 1982 constitutional amendment removed the to make China become a bureaucratic elite and business elite to reap the fruits of development can do anything the country.
3, the ruling party has degenerated into a powerful capital,
not a Western-style democracy does not matter, you can the role of government to make up the government and the ruling party to tend to the civilian population and maintain the interests of the lower classes. But 30 years of reform, the Government has completely degenerated into the elite group. ---- the ruling Communist Party of China has largely lost its true colors, have largely degenerated into a bureaucratic party and the capital of the party. The resulting performance is a large area of government and social corruption, and the people disappointed with the government and party. This is still down now under development, many people reported that the Hu-Wen government still hopes that eventually turned into a wait and see if this is disappointing, it is the arrival time of social crisis. estimated time window is also a political crisis after 2008.
4, deformity of the market economic system is the largest cause of lead to corruption.
if a country does not seek justice, democracy and freedom, moral conscience, only the pursuit of material wealth and economic growth, then the society will become a fallen society.
At present, domestic and foreign comments on the analysis of the problems many Chinese, for example, Lang to believe that the current China's main problem is a corrupt group, it is this corrupt group raised the cost of the survival of the Chinese people, and made ordinary people of hardship.
But a closer analysis of Chinese society, a large area and depth of corruption, the main reason is not because there is a group of corrupt elements in nature, but because the reform introduced a new market economy and capitalist system. especially when the market capitalist system of economic and political system are not protected when the moment of corruption will be prevalent.
look at the present Chinese people's mentality and social atmosphere, everything is about money, everything is the pursuit of money. for money can be desperate, corrupt. What causes extreme money of Chinese society and materialism? is the introduction of this economic system reform.
are the product of the system, what kind of system, what kinds of people. today's major Chinese society is affected by the system, in particular the impact of the economic base. Therefore, the efficiency of the supremacy of the liberalization of market reforms, a large area of the root causes of corruption. However, today's China is still slavishly imitate copy the Western neo-liberalism, to spare no effort introduction of the , the system will generate a new social ideology influence. If the idea is extremely selfish profit spread in China, there will be a socialist resurgence of China. 30 years before the reform the practice of socialism are still have a huge impact, China's reform The road will always be correct socialist ideology.
Deng Xiaoping once said: in the end to establish what kind of social system and economic system? China's ruling party and Chinese society have to be discussed. China has to explore a new era of theory. The next step of the reform will be a new theory of the reform. no new the birth of the theory of reform and the establishment of the new system of reasonable, now roll-over of this great reform.
5, China has a large-scale privatization and the proletariat of the two camps battle has begun.
China has to a large extent, privatization, Chinese society has undergone considerable differentiation, integration in such a differentiation process of national wealth reallocation, the reform has bred a large number of the proletariat.
into the 21st century, the world's most noteworthy is a sign of the emergence of a large-scale proletarianization! gradually decimal, and the national wealth owned by people have no chance with the ownership of national wealth. This is a new type of state is different from the Mao era .
which will appear in a new political power game. the moment in China, the two forces, two camps have been laid out battle, the fierce battle has begun. a new competition for sports rights movement and wealth will started. This is after all in 2008.
mass movement and the new civilian activities of hostile forces at home and abroad will be intertwined with, if this force had a resonance, it will impact the common form of government. G .. .
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