The hottest overcapacity will exist for a long tim

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Overcapacity will exist for a long time

in recent years, there has been an increase in discussions at home and abroad about the decline of China's potential growth rate, some of which have focused on supply factors, such as changes in China's population structure and labor supply and demand, but also on changes in demand. Under the given technical conditions and budget constraints, any demand has boundary constraints. At present, people have felt this pressure. What needs to be emphasized is not the short-term overcapacity, but the long-term overcapacity seen from the historical process of industrialization and urbanization

the transition period is prone to expected chaos

we combed the historical experience of international industrialization since the Second World War, and observed an important phenomenon: a number of successful catch-up economies, including Japan, South Korea, Taiwan, China of China, as well as Germany in Europe, have experienced rapid growth for 20 or 30 years. When the per capita income reached 11000 international dollars, Almost without exception, there has been a natural decline in the growth rate, with an average decline of about 30%, and some of the decline is even greater. We are also quite surprised by this result. According to the same caliber, China's per capita income exceeded 9000 international yuan in 2012, and China's growth path is relatively close to the above successful economies. Based on this inference, China is likely to have a significant decline in the potential growth rate in the next two or three years

in recent years, there has been an increase in discussions at home and abroad about the decline of China's potential growth rate, some of which have focused on supply factors, such as changes in China's population structure and labor supply and demand, but also on changes in the demand side. Under the given technical conditions and budget constraints, any demand has boundary constraints. At present, people have felt this pressure. What needs to be emphasized is not the short-term overcapacity, but the long-term overcapacity seen from the historical process of industrialization and urbanization

once the long-term demand peak appears, the situation that the short-term excess capacity that has repeatedly appeared in the past is absorbed by the long-term demand growth will no longer appear, and a real overcapacity will be formed. For example, the actual supply of urban housing has reached 9million units in 2012, and the annual peak of long-term demand is about 13million units, which is expected to appear around 2015, and is likely to remain at the existing level or show negative growth thereafter; The annual peak of long-term demand for automobiles will appear around 2020, and will basically maintain a growth rate slightly higher than GDP in the next few years; The annual peak of long-term demand for heavy chemical industrial products such as steel and building materials has appeared or is close to appearing. Housing and automobile are the leading industries of China's rapid economic growth since the new century. Infrastructure and real estate investment account for about half of the total investment in recent years. The emergence of long-term peak demand in these fields indicates that China's rapid economic growth will touch the ceiling of demand growth

some people regard this change as the decline or even collapse of China's economy, and some public opinions discuss this issue under the topic of hard landing. It seems that the problem of cognition is not trivial

from the historical experience of industrialization, the natural decline in the development level of per capita income of 11000 international dollars is a sign of the success of catch-up economies, because they have fully absorbed the potential of high-speed growth. This will be seen more clearly than more economies falling into the middle-income trap. Secondly, even if the growth rate decreases, the annual increase in GDP is still large, but compared with the continuously increasing total base, the growth rate decreases. For example, the new increase of 10% in 2000 can only promote the growth of 2% or a little more by 2012; If we want to achieve an 8% growth, the new volume must be at least three times that of the year. Third, in the next few years, in order to achieve the goal of doubling the per capita income of residents proposed by the 18th National Congress, the growth rate of residents' income is expected to exceed the growth rate of GDP, and the actual feelings of ordinary people will improve. In addition, even if the growth rate drops to 7% or a little lower in the next few years, the goal of building a moderately prosperous society in all respects is still expected to be achieved as scheduled by 2020; From the perspective of international comparison, China's economic aggregate calculated in current dollars is likely to catch up with or exceed the United States, and the per capita income level is expected to step into the threshold of high-income countries

China's economy is experiencing the transformation between different growth platforms, rather than short-term fluctuations on the same platform. The concept of hard landing or soft landing is more suitable for the latter occasion, while in the former occasion, the use of such a concept is easy to produce such an inference: now that it has landed, it should take off again and return to the high growth track. This is obviously prone to misleading expectations

the main tone of macro policy is to support the bottom.

international experience shows that the transformation of growth stages is often not smooth sailing. Japan, South Korea, etc. experienced excessive fluctuations during this period. The reason is that this period has more internal instability and uncertainty than ever before. For example, the potential growth rate began to decline, people's expectations were confused, and their emotions fluctuated greatly; Short cycle (caused by inventory adjustment, etc.) changes are superimposed with medium and long-term cycle changes, and some contradictory information is often heard; Enterprises, governments and other actors are easy to maintain policy inertia, and adjustment lags behind, and so on

in the near future, there are two tendencies that are easy to appear and therefore need to be prevented. One is to push up, trying to return to the previous high growth track. In some places, Li Xingzhi, director of the Organizing Committee of the 2010 China International Educational Technology and equipment exhibition and President of the China teaching instruments and Equipment Corporation, delivered an opening speech, which may contribute to this trend. This seems to have occurred in the forecasts of some institutions for the growth rate in 2013. The other is fast falling. When the short-term cycle and the medium and long-term cycle change in the same direction, the possibility of rapid decline in growth rate in the short term increases. This situation occurred once in the first half of 2012. In 2013, when the short cycle peaked and fell, we need to pay particular attention to whether there was a rapid decline

on the surface, these two tendencies have opposite directions, but in reality, they are likely to cause and effect each other and become a continuous process. In the short term, artificially pushing up the speed exceeds the potential productivity level, resulting in inflationary pressure and financial risks. After that, they are forced to adjust, and once they enter the downward track, they may fall fast, which is the so-called ups and downs

in fact, we face different speed combinations. One is a big rise and fall; The other is moderate speed, but strong stability and sustainability. In a few years, the average growth rate of the latter may be higher. Development is still the absolute principle. At this stage, the experimental procedure for solving all China's economic and social problems: we must maintain a certain growth rate. Proposing the decline of potential growth rate and emphasizing the transformation of growth stages is not to ignore the growth rate, but to effectively maintain the necessary and possible growth rate on the basis of recognizing the growth law. In recent years, we have been talking about stabilizing growth. In the transition period of growth stage, it is more necessary and difficult to stabilize, and we should put more emphasis on stability. It is a great success to be able to stabilize without big ups and downs

therefore, the main tone of macro policy in the transition period of growth stage is to support the bottom rather than push up. It's good to maintain an increase of 7% - 8%. If there is any sign of overheating, brake in time; On the other hand, we should pay more attention to the prevention, which will make a lot of progress, and make necessary policy and project reserves, so that once problems occur, we can act in a timely and effective manner. If the transformation process is relatively smooth, it may enter the stage of medium speed growth in two or three years. The growth equilibrium point of this stage remains to be seen. There may be a bottoming or trial and error process, which is estimated to fall between 6% and 7%

looking for growth momentum in the new stage

the report of the 18th CPC National Congress proposed that China is still in a period of promising strategic opportunities, but the connotation and conditions of the period of strategic opportunities will change. This change will be embodied in the new growth stage

if the high growth stage in the past 30 years is mainly stalling, the new stage is mainly upgrading, and there are two steps, industrial upgrading and innovation. In short, in the past 30 years of high growth, agriculture has shifted to non-agricultural industries dominated by industry. On the one hand, it has provided employment opportunities for a large number of potential unemployed people in rural areas and significantly increased the labor participation rate; On the other hand, due to the huge productivity gap between agricultural and non-agricultural sectors, the reallocation of labor among sectors has greatly improved the labor productivity of the whole society

after entering the new growth stage, the transfer of labor force between agriculture and non-agricultural industries will continue, but the speed will gradually slow down, and the focus of improving efficiency will shift to the intra industry and inter industry of non-agricultural industries. International experience shows that competition and restructuring in the industry can significantly improve productivity by eliminating inefficient enterprises. At the same time, with the acceleration of agricultural industrialization and modernization, the productivity of the agricultural sector will also approach the level of non-agricultural industries. Such a changing picture is what we call the process of industrialization, informatization, urbanization and agricultural modernization advancing synchronously

in this context, a series of new growth points may emerge in the new growth stage

infrastructure investment. There is still great potential for investment growth, such as high-speed rail, subway, transportation facilities in the central and western regions, etc. The problem is how to promote investment growth on the basis of preventing and controlling risks and improving efficiency

urbanization. In the next 20 to 30 years, China's urbanization rate should still have more than 20 percentage points of growth space, involving more than 200 million people. Among the existing urban permanent residents, there are still nearly 20% of the non registered residence population. Some studies believe that after these people solve the problem of registered residence, their consumption will increase by about 30%, which is equivalent to the pulling effect of six percentage points of farmers entering the city on consumption

industrial upgrading. In 2010, China's industrial value-added rate was 23%, while Japan's was 31.4% and the United States' was 38.5%. If we can achieve the same level as Japan and the United States through industrial upgrading, there will be 30% - 70% room for improvement

consumption upgrading. The implementation of the income doubling plan will help to increase the proportion of consumption. The urban middle-income group (middle class) is the main force driving consumption growth. It is expected that the proportion of this group will reach 45% by 2020

integrate into the global labor division system to a greater extent and with higher quality. By improving trade and investment activities, the team said they had conducted early experiments to improve their position in the global value chain, and formed new competitive advantages in some areas, such as foreign trade, labor export and investment related to infrastructure capacity

innovation. China has shown great innovation potential in many fields. In addition to technological innovation, business model innovation should not be underestimated

note: This article is excerpted from "ten year outlook for China's economic growth (), looking for new impetus and balance", written by liushijin, deputy director of the development research center of the State Council. The title has been changed

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