Shen Jianguang: New Layout Under The New Normal

Compared with the press releases of the previous central economic work conference, the "Marginal Reform of tackling the challenges of reform" and "the marginal effect of comprehensive stimulus policies" are obviously diminishing. "Reform should be characterized by the characteristics of the year, and also conducive to long-term institutional arrangements".

Combined with this meeting and the current economic situation, I am optimistic about China's overall economy next year.

First, China's economy is still in a favorable position in the world.

As General Secretary Xi said, China's economy is in a new normal stage. It has three main characteristics: first, from high-speed growth to medium and high speed growth; the two is to constantly optimize and upgrade the economic structure; three, from factor driven, investment driven to innovation driven.

Of course, despite the slowdown in China's economy under the new normal, if we analyze the new normal characteristics of China's economy into a broader perspective, it is not difficult to find that since the financial crisis, global economic growth has also had new normal characteristics before the crisis. China's performance is still the best. It is not only the leader of world growth, but also the rapid progress of structural reform.

From this perspective, we should not be overly pessimistic about China's economic growth in recent two years.

The global economic recovery, the fall in oil prices, the continued release of China's reform dividend, and the easing of liquidity and the recovery of the real estate market are expected to increase by more than 7% next year. Therefore, the new normal is likely to take a new mindset. In 2015, China's economic growth may exceed expectations.

Second, China's export competitiveness is still strong.

Judging from the statement of the central economic work conference, consumption is the foundation and investment is the key factor in the three carriages next year, while exports are the supporting role.

Combined with my recent overseas roadshow experience, I found that the current US stabilization situation is obvious, the ECB's anti crisis measures are more vigorous, and the global economy is expected to further improve next year, which has created a favorable external environment for China's exports.

At the same time, although RMB has appreciated more than 30% since the reform, and in recent years, China's labor wage costs have risen sharply, but from the international share, China's export share remains the first place, and the share of emerging market countries has further increased, reflecting the strong competitiveness of China's exports in the world, laying the foundation for supporting the rapid growth of China's economy.

Third, China's ability to resist external shocks is still strong.

Next year is the end of the year 12th Five-Year. Many financial reforms, such as interest rate liberalization, exchange rate liberalization and capital account liberalization, will be vigorously promoted in the coming year, and this will lay a good foundation for the completion of the basic exchange of 2016 yuan and the promotion of RMB early becoming an international reserve currency in 2020.

Of course, there are concerns that the opening of capital account will have an impact on domestic financial stability. But in my view, China's foreign exchange reserves are as high as 4 trillion US dollars, and China's debt risk is controllable. In addition to monitoring short-term capital flows, China's ability to resist external shocks is still strong.

Fourth, next year inflation pressure is not big, monetary policy space still exists.

This year, China has shown that inflation is not a worry. On the contrary, deflation in the production sector is worth noting.

There are several reasons for PPI's sustained deflation for 33 months: first, the slowdown in domestic demand, which is directly reflected in the improvement of the real interest rate of the production enterprises. Therefore, it is necessary to reduce interest rates earlier to support the financing of the real economy.

The two is the decline in global commodity prices, especially after the adjustment of energy structure.

In view of the decline in oil prices, the author believes that, on the whole, it is beneficial for Chinese enterprises and residents.

In a word, inflation is still not a major contradiction next year, which provides more room for monetary policy.

Fifth, China's overall debt risk remains manageable.

Compared with last year's six major tasks of the economic working conference, we should focus on preventing and controlling debt risks. This year, the formulation of the debt problem has been diluted.

This does not mean that debt problems are not enough to give rise to warning, but to solve the risk of high leverage and bubble as the main characteristics, we need to "cure both the symptoms and the symptoms, suit the remedy to the case, improve the institutional mechanism of eliminating risks" and change our thinking.

In my view, the most worrying problem in China's four major sectors is the liabilities of non-financial enterprises. However, resolving this problem and resolving the problem of leverage should also be advocated.

For example, the recent improvement of capital market will help capital flow to listed companies, supplement enterprise capital, and naturally reduce leverage.

At the same time, we should also see that the debt rate of the Chinese government and residents is still very low.

There will be plenty of room for government spending and increased leverage to encourage consumption in the future.

Sixth, reform will be the biggest dividend.

Since the Third Plenary Session of the third plenary session, the pace of reform has gone beyond expectations. Financial reform, household registration reform and urbanization reform are continuing to push forward. Fiscal reform and SOE reform as a deepwater area are expected to break the ice next year.

Among them, the fiscal and tax reform, the top-level design has been completed, once next year can make substantial progress, troubled many years of Chinese enterprises and local governments.

The problem of randomness, low pparency and soft constraints is expected to be preliminarily resolved.

As for the reform of state-owned enterprises, the reform of state-owned enterprises will be accelerated or feasible next year. If the reform of state-owned enterprises can go deep, the power of the market will promote the efficiency of micro entities and find a new economic growth point for the Chinese economy.

In short, combined with the whole world

From the perspective of the author, I have confidence in China's economy as a whole.

However, this does not mean that risks should be ignored. In fact, the following risks still need to be taken seriously.

First, the fact that the current high inventory of industrial products means that there is still a long way to go to solve the problem of overcapacity. We need to adhere to the idea of marketization, speed up the reform of state-owned enterprises, and effectively "shut down and turn around" to get out of this predicament.

The two is the steps and collocation of reform. After all, some reforms in the short term will have a negative impact on the economy. For example, the advance of fiscal and taxation reform may affect the growth rate of investment next year. We should consider ahead of schedule and make corresponding risk hedging.

Three is

The coordination of steps, as I have said earlier, that monetary policy can only win time to prevent short-term economic risks, the real structural reform is the only way to win growth.

Therefore, we must adhere to the overall thinking of macroeconomic policies, micro policies and social policies, seek a balance between steady growth and structural adjustment, constantly market-oriented reform in the new normal, and promote technological progress. In 2015, China's economy is full of hope.