At present, China's economy is facing many problems, such as the decline of economic growth rate, the deflation of industrial products prices, the decline of private investment, the increase of leverage ratio, the false currency, the rise of labor costs, the outflow of manufacturing industry, the obstruction of urbanization, the prosperity of real estate industry, the spread of shadow banking, the accumulation of financial risks, the greater pressure of exchange rate depreciation, the sharp decline of foreign exchange reserves, the so-called capital idling, "asset shortage" and liquidity trap.
These problems seem to be independent of each other, but in fact they are interrelated. For policy makers, if there is no systematic analysis to demonstrate, it may be that determination will get twice the result with half the effort, or even there are many policies that restrict each other. For entrepreneurs and financial market investors, if they can't deeply understand the staggered relationship between problems, they will be easily influenced by short-term market sentiment fluctuations and drift with the tide, leading to decision-making mistakes.
In fact, there is a clear logical chain behind many problems in the macroeconomic and financial system-income suppresses demand, demand suppresses investment, investment forces leverage, leverage pushes up asset prices, and asset prices suppress exchange rates.
CPI-PPI- asset price gap, private investment-public investment gap, M 1-M2 gap, monetary-social financing gap, flattening of yield curve and other typical pictures in recent years are actually concrete reflections of the above logical chain at different nodes.
First, straighten out the logical chain of economic difficulties.
Let's straighten out the above logical chain through several prominent phenomena in the macro-economy and financial system.
The first outstanding phenomenon is that the demand in the industrial sector is insufficient and the production capacity is relatively surplus. Mainly reflected in the negative PPI for four consecutive years, the time span exceeded the deflation cycle of industrial products from 65438 to 0997 to 2002. Insufficient demand and overcapacity are two sides of the same coin, corresponding to each other. In the past, the overcapacity caused by the accumulation of investment in the economic upswing cycle was also the cause of deflation in coal, steel and other industries. The oversupply in the industrial field is in sharp contrast with the shortage in the financial market and the first-line real estate market.
The second outstanding phenomenon is the sharp decline in the growth rate of private investment. The main reason for the decline in investment is not optimistic about future demand (including domestic demand and export demand), lack of investment opportunities and expected return on capital, rather than lack of funds. According to the calculation of Bai Zhongen and Zhang Qiong (20 14), the macro capital return rate of China's economy has dropped from about 25% in the 1990s to 15% at present. Among them, from 2008 to 20 14, the speed and range of decline was particularly obvious, and it decreased by 10 percentage point in six years.
It is untenable to simply attribute the decline in investment growth to "financing difficulties". An example is that it is common for banks to pursue enterprises and fail to meet the loan targets. Loan harassment calls have become common in the last two years. For another example, many enterprises hold a large amount of their own cash on their books and are unwilling to invest. In addition, in recent years, the number of overseas M&A projects and the total capital scale of China enterprises are also expanding rapidly.
Insufficient demand depresses investment, and at the same time, in the short term, the decline in investment growth will in turn affect aggregate demand, leading to the contraction of macroeconomic aggregate demand.
The third prominent phenomenon is "pecking order" plus leverage. A direct impact of the decline in the return on investment in the real economy is to force various economic entities to increase leverage. We see that adding leverage is not limited to a single enterprise, a single industry or a single department, but a common phenomenon. From the very beginning, local governments added leverage, to non-financial enterprises added leverage, to non-standard and shadow banking systems, to Internet finance P2P, to leveraged trading in the stock market last year, and then to the expansion of insurance funds, down payment loans in the real estate market and residential mortgage loans this year.
The results of pecking order and leverage are: first, the ratio of total debt to /GDP is getting higher and higher; Second, and more importantly, the subject with leverage has gradually expanded to the subject with weak risk-taking ability. At the same time, financial risks are accumulated at the connotation and extension levels. Marginal leverage is more noteworthy than stock leverage. The "pecking order" plus leverage leads to higher and higher marginal leverage risk, which will lead to default after reaching a certain threshold, thus "reverse pecking order" devours existing leverage and causes systemic risk.
The fourth outstanding phenomenon is that funds are "divorced from reality" and financial market prices are rising in turn. The lack of investment opportunities in the real economy has also caused a result, which is to force a large amount of funds to flock to the financial market to seek returns. However, all financial assets must eventually correspond to a certain point in the real economy. When the real economy is depressed and the return on investment declines, the price of financial assets can only be pushed up by three forces: one is leverage, the other is irrational sentiment, and the third is the residual local arbitrage opportunity caused by distortion. From last year's bond bull market to stock bull market, and then to the booming real estate market in first-and second-tier cities, there is a * * * factor at work-adding leverage.
Of course, the role of entities and finance is mutual. Rising asset prices will in turn withdraw funds from the real economy, resulting in the so-called currency separation and liquidity trap. Behind this is both the thrust of the lack of investment opportunities in the real economy and the pull of rising asset prices.
The fifth outstanding phenomenon is that the currency is activated, the yield curve is flat and the exchange rate elasticity is weak. On the one hand, physical investment inhibits the ability of credit creation; On the other hand, the active financial market and real estate market are activating money again; Macro data show that the gap between the growth rate of M 1 and the growth rate of M2 exceeds 10 percentage point. The pattern of money creation has obviously changed.
Related to this is the flattening yield curve. At first, the decline in real return on investment suppressed long-term interest rates, and later it was the result of the central bank's intention. The purpose is to promote investment at one end and curb asset price bubbles at the other under the condition of poor transmission channels of monetary policy. In the price spectrum, the differentiation effect of monetary and credit structure slightly exceeds the Balassa-Samuelson effect.
The real economy and asset prices squeeze the exchange rate at the same time. The exchange rate between entities and finance, between long-term factors and short-term factors, between "floating fear" trading sentiment and the formation mechanism reform system construction, is weakened elastically according to the "double anchor camera conversion mechanism".
It should be noted that the logical chain proposed in this paper is only an abstract theoretical model. The function of the model is to provide reference for understanding and judging the economic situation, and it does not pursue a detailed description of reality, so it is far from perfect and omnipotent. In reality, the relationship between macroeconomic variables is often much more complicated, neither unidirectional nor linear, but an interrelated dynamic system.
Second, the strategy node on the logical chain.
Straightening out the above logical chain will make it easier to understand the macro-control policies in recent years. Fiscal policy, monetary policy and macro-prudential policy are all carried out along the above logical chain. Focus on five nodes.
First, expand infrastructure investment by means of finance, quasi-finance and PPP to fill the gap in total demand; At the same time, promote the supply side of key industries such as coal and steel to reduce production capacity.
The second is to promote private investment through fiscal tax reduction and fee reduction, structural monetary policy and other means.
Third, structural macro-debt management with leverage transfer, local debt replacement, short-term to long-term, non-standard to standard, non-financial enterprises to finance and residents as the main ideas.
Fourth, the yield curve "saves short and shortens long", dredges the transmission channel of monetary policy, reduces the motivation for funds to be divorced from reality, and inhibits the expansion of asset price bubbles. In addition, strict financial discipline is adopted to limit the excessive leverage of the financial sector, and systemic financial risks are closely monitored and prevented through macro-prudential mechanisms.
Fifth, take the opportunity to promote the reform of the exchange rate formation mechanism and allow the RMB exchange rate flexibility to weaken. The practice in reality can be roughly summarized as "double anchor camera conversion mechanism".
Macro-control policies are aimed at the economic cycle and cannot solve structural problems. For example, there are both cyclical and structural reasons behind the rise in housing prices in first-tier cities. This means that monetary policy, temporary purchase restriction, suspension of land auction, passive cooling and other measures can not fundamentally solve the problem, but must rely on the increase of land supply and the change of urban public governance concept and ability.
However, macro-control and structural reform policies are not contradictory in most cases. Some people think that macro-control is a "palliative" policy, which treats the symptoms rather than the root cause. Under the scale of long-term economic growth, this criticism has some truth; But it doesn't mean that macro-control is not needed. Just like treating a disease, it is necessary, if not a substitute for surgery. "Tackling the symptoms" can buy time for "curing the disease". The essence of economic policy lies in treating both the symptoms and the root causes, and properly handling the complex relationship between macro-control and structural reform.
Third, the paradox of low income and high cost.
The paradox of low income and high cost is another prominent phenomenon in the current economy. On the one hand, workers complain about low income and great pressure; On the other hand, manufacturers are complaining that labor costs are rising too fast. This seems to be a paradox. The direct cause of the paradox is the different frame of reference: the frame of reference for workers complaining about low wages is housing prices and medical education prices, while the frame of reference for enterprises complaining about high costs is the wage levels in the past and abroad.
The change of population structure is the fundamental factor to push up the wage level: first, the total labor supply has shrunk, and the working-age population aged 15-59 has started to decline from 20 12; Second, after the second stage of urbanization, the rural surplus labor force has been greatly reduced.
However, in addition to the changes in the population structure itself, there is also a key crux-the growth of workers' income can not keep up with the rise in housing prices and medical education prices. Unfortunately, high housing prices and imperfect social security system have become high walls to prevent farmers from entering cities and becoming urban residents; Although the prices of other necessities have not risen rapidly, the prices of most manufactured goods have even fallen. Fortunately, high housing prices and the lack of public welfare for migrant workers are not "dead knots", and we can improve them to some extent through reform.
High housing prices and low welfare have increased the wage cost of manufacturing enterprises to a certain extent, which is passive and has no basis for improving productivity. It is not difficult to understand that it is the local "labor shortage" in recent years. In this sense, high housing prices and imperfect social security system are not only high walls that block the urbanization of population, but also high walls that once blocked traditional manufacturing industries.
Compared with workers, enterprises are often in a more active position. Faced with rising labor costs, enterprises can vote with their feet. After all, Vietnam, India and other countries still have a large number of laborers, and the government is actively pursuing the open policy of attracting foreign investment. The outflow of manufacturing industry has occurred, which deserves high vigilance for a country with a working-age population of 900 million and an urbanization rate of just over half.
Fourth, the source of logical chain.
The deep-seated reason of "low income and high cost paradox" lies in the factor reward structure and income inequality, which is also the source of the logical chain of economic difficulties.
Enterprise departments and government departments are in an advantageous position in factor distribution, which is directly related to the macroeconomic structure of low consumption rate and high savings rate. Moreover, in the total national savings, corporate savings and government savings account for a relatively large proportion. A large number of resources are used for investment, which in turn causes the consumption capacity in the economic system to be unable to absorb the production capacity, resulting in insufficient endogenous growth momentum of the economy.
In fact, the problem of factor distribution structure not only exists in China, but also is global. From 1995 to 20 14, the proportion of workers' compensation in the gross national income of the United States dropped from nearly 67% to less than 6 1%. The adjustment of income distribution occurs not only between capital and labor, but also between high-skilled workers and low-skilled workers.
The empirical study of economics shows that the decline in the proportion of labor remuneration is mainly driven by two factors: first, a large number of developing countries have joined the labor force in the process of economic globalization; Second, technological progress has led to the replacement of labor by machines.
In the past, the participation of China's labor force led to a decline in the proportion of labor remuneration in traditional manufacturing industries in the United States and Europe; In the future, the entry of Vietnamese, Indian and even African laborers will also affect China.
The machine is more efficient and easier to manage; But machines don't buy goods or consume services. Machines can make factories run more efficiently, but if the distribution method is not reformed accordingly, it may slow down the operation of the larger machine of market economy. In recent years, the development of science, technology and commerce shows that the trend of machines replacing labor will continue in the future, and the affected areas will expand from manufacturing departments to service departments such as secretaries, accounting, finance, law and logistics.
Enterprises are only the middle statistical link. The savings and investment of all enterprise departments will inevitably fall on real natural persons in the form of asset prices. Taking the ultimate natural person as the object, the marginal propensity to consume of the rich is lower than that of the poor. Without credit to make up the difference, the inequality of income and property will restrain the total demand, thus weakening the ability of sustainable economic growth.
You can imagine a thinking experiment: there is only one enterprise in the economy. Besides a boss, the enterprise only employs machines, and all the products and services needed in the economy are produced by machines. Then, the result must be that the boss is as rich as an enemy, and everyone except the boss is unemployed, relying on public welfare, and income distribution is polarized. Obviously, there can be no growth in this economy, and the rise in asset prices is unsustainable.
Although this limit state will not appear in reality, the world economy is indeed evolving in this direction. The value of thought experiment lies in that it enlightens us that in the process of economic evolution in this direction, we must either endure the downward or even stagnation of economic growth, or we must reform and adjust the distribution system, because a series of economic problems caused by this logical source are far from being solved by macro-control policies.