Chen faith: the national economy and the people who live
who served text / Chen sincerely
【Content Guide: national affairs of the governed, especially economic policy makers, the need to improve or even give up the bureaucracy has been growing awareness of the prevalent trend of the I , stereotyped decision-making, policy dogma, economic administration and the pies, as effectively as possible to resolve the existing practical problems, such as soaring house prices consecutive issues, medical expenses and other people necessary to artificially high health care issues, declining quality of basic education high cost of higher education issues, issues of public goods price hikes, again income pay Naotidaogua issues related to public utilities industries lack of professional ethics practitioners, as well as other basic needs of the general problem of daily living beings, even though some of the issues relative to the in terms of economic growth only for information purposes only and does not constitute any person or any institution, to make any decisions based on business, nor constitute mentioned herein based on the evaluation of individuals or institutions.】
what China than in France not long ago you
a friend back to Paris on vacation. We chatted about many topics, and ultimately, the domestic public hot natural world economic issues of common concern to public opinion as a result of factors such as economic problems caused by social problems have been exposed mm, there are still in the latency. On the economic issue, we still can not escape, not open around the topic of total rates and other asset prices, loose monetary policy and investment of excess liquidity due to speculation and inflation rampant and so on. When talking about price increases , she may be issued a surprise to many people lamented: people have heard of, but many people have been skeptical. But if you know me, an say, people will be another taste.
my friend, though we can not say how much that rich, but certainly claim to be the envy of many of those. she returned from studying in France, in the province as a vice president of a major publishing house. However, she at home or a said she was sigh, can imagine how China's price level to the level of a world leader. However, our government departments, and some experts claim that China has all day although there are inflationary pressures are expected, but no inflation. < br> by government departments, to discourse, according to some experts, China has not identified the basis of inflation, the Chinese government official CPI data. National Bureau of Statistics data show that in 2009 the consumer price (CPI) declined over the previous year 0.7% In 2009 November, CPI's rise from negative to positive year on year, the month rose 0.6% in December 2009, CPI rose 1.9%. in accordance with the National Bureau of Statistics CPI data, some scholars, government officials believe that China is not only inflation did not happen will not happen, but deflation, in turn, China should continue the world's few loose monetary policy. However, some experts believe that China not only to inflation, and more particularly to prevent stagflation. 70s of last century The United States is one such emerging economic crisis. For China's problem, some scholars pointed out that China's inflation pressures and asset bubbles There are many types, such as demand-pull inflation, cost-push inflation and international imported inflation, and tightening of demand-pull inflation only play a role. For other types of inflation, monetary and fiscal policies requires not only the elastic matching, also need structural adjustment, particularly to address the economic situation of stagflation. When China's economic growth rate to 6%, inflation rate of over 4%, there will be stagflation.
to identify with a negative CPI inflation should not questioned
use this method from the data itself, for a government agency, the experts, the use of CPI data is not inflation, may be very reasonable, also very international, but based on the fact that the real economy, China No worries of inflation, says that the objective is now being questioned numerous people. This kind of challenge, including a wide range of content.
First, CPI data authenticity has been controversial because of rising prices in recent years So far less than the actual rate.
Second, the data in the CPI calculation problems, do not reflect the true level of inflation. Now is the manufactured goods and food determines the trend of CPI index, house prices are not calculated in the CPI. There data, said China's CPI calculations in 2009, finished goods and food factors not accounted for light weight, pork accounted for up to 3.03%. medical care, education and housing, among other factors accounted for much less weight, housing (not with prices) accounted for 14.69% weight, of which water, electricity, liquefied petroleum gas, pipeline gas, other fuel proportion of the five categories accounted for 40.8% of living, public goods in order to calculate the weight in the CPI in the proportion of approximately 5.99%. In particular, the present stage in China, real estate is the investment demand-led, in the consumer price index (CPI) in the non-residential rates. while in the United States, consumer demand-driven real estate, residential part of consumer goods in the consumer price index (CPI) statistics, accounting for up to 42% of residential housing prices. If included in the CPI in recent years, soaring house prices in many areas by 2-digit annual price gains included , the results can imagine In 2009, housing prices in China before the time and space, causing many people at home and abroad, organizations concerned with the worries. The reality is, in 2009, housing prices in some areas within six months to rise by 50% or more, for the full year, housing prices up to 50% of the city a few, in some areas the rate of increase greater than 50%, even more than 100%. may be interesting that the Chinese in the history of real estate the most crazy, largest and fastest rising house prices in 2009, National Bureau of Statistics data released turned out to be the year house prices rose only 1.5%. the data published, it caused people to question the consistency is almost even criticism, has even been dubbed the Bureau of Statistics early April Fool's Day to you too.
Furthermore, CPI data do not reflect the true social rate of increase in the price level and price. In recent years, particularly since the second half of 2006, the market prices of various commodities the rate of increase is not small, except in 2008, after a period of time was skyrocketing pork, eggs and other products prices have come down, but in most products, rising prices did not how to go back up. The CPI is calculated before the base year, year level, the higher the base the previous year, to make the lower the current data. to the fourth quarter of last year, almost all kinds of goods on the market fully prices, rising for months, pork, eggs, etc. higher product prices continue to accelerate the pace. Just go to the market a go will know, now, clothing, vegetables, daily necessities, etc., almost everything in the price, and that the rate increase is simply not as CPI data shows what a few percentage points less.
then there are, if the last round of pork is the main cause of inflation caused by price increases, then, is now a greater impact than the pork on the CPI of collective public goods rose sharply price, is to promote greater price increases, inflation. Just now this moment, the government departments, industry competition authorities also launched reform of resource prices. With increased asset bubble, not only service prices are rising, Moreover, with the resource price reform started, including water, electricity, gas, etc., open daily life and the people related resources products, price is a significant price increase of public, or for a substantial price increases, has now opened new round of price increases for energy resources, the prelude, though people do not want to .2009 since October, in the country, natural gas, water and other product prices surging momentum, Lanzhou, Changsha, Beijing, Yinchuan, Harbin and other places residential water price has been a sharp rise, or have been planned price increases. Lanzhou City residential water prices starting from November increased 0.3 yuan per cubic meter, water prices in Changsha City to be living up 0.89 yuan per ton, the price of the original 1 dollar and a sudden increased to about 2.6 million, residents after the final loss of the use of assessment may take up to 3 yuan more than the price. The other big product price.
the current trend of rising prices, in particular, public goods with monopoly prices, it is impossible not worth worrying. in the field of public goods, the operator has a monopoly, the pricing mechanism adopted in theory cost + profit up the number, or even up more. public utility companies are often from the sector, industry interests, pricing or price adjustment to the Government requirements, seemed very excessive, unreasonable, or even take more reported false statement of costs and other ways to achieve greater The purpose of the price, abuse of market monopoly power to reap high profits. from the past, many public goods experience price adjustment, provided that the price of public goods, market-oriented reforms, the public's first reaction is to worry about the price increase. In eyes of the public, the price reform of public goods is equivalent to price increases. Under such circumstances, we can imagine, the full price of public goods, is bound to cause prices of various energy resources, products price increases and lead to overall price a sharp rise. By that time, even if the Government does not recognize inflation, but people actually already fallen into the quagmire of inflation among the reduced quality of life, life is no guarantee even basic. Although the government enabled a large number of financial investment to stimulate economy, despite the government's fiscal revenue growth in the context of the economic crisis is still impressive, but most companies bring in raw material prices, after inflation, then the wage can not afford the rising costs too much, the people's source of revenue growth.
from China Ministry of Finance data show that in December 2009, the national fiscal revenue 508.4 billion yuan, an increase compared with 182.2 billion yuan a year earlier, an increase of 55.8%. month high revenue growth, investment, rapid credit growth to real estate, construction and installation industry substantial increase in sales tax is an important factor such as In 2009 January-December total, the implementation of the national fiscal revenue amounted to 6.8477 trillion yuan to preliminary statistics, an increase of 714.7 billion yuan, an increase of 11.7% In 2009 the cumulative January-December, the National Financial Expenditure for the implementation of the preliminary statistics 7.5874 trillion yuan, an increase of 1.3281 trillion yuan, up 21.2%. then announced by the combination of various economic data, China's economy encouraging signs of recovery emerged in 2009, has been successful, Eight According to the National Bureau of Investigation Team was launched in Guangzhou, 6.3%. Looking around the actual situation, the findings in Guangzhou is not unusual situation in most areas of the country with them is the same or worse. This can explain the Government make every effort to ensure national economic growth failed to keep quality of life of people? in response to the global economic crisis, the Chinese economy mainly by government investment and rebound quickly, but no real growth in consumption, consumption growth data is derived from the institutions and consumer spending confused?
over-loose monetary policy is an important reason leading to inflation inflation
On this topic, I and friends in France are naturally talked about China being implemented loose monetary policy. It is true that China should stimulate the economic growth, loose monetary policy needs to increase the money supply, increased credit can be a matter of fact, over-loose monetary policy, especially when put too much money and low-cost credit funds have not flowed into the real economy, and is the inflow of the chase and other types of assets such as real estate prices of investment, speculation and consumption of public funds of some people, it is likely to lead people to terrible inflation, and even the phenomenon of the 70s in the last century the United States that occurred kinds of stagflation.
famous economist Milton Friedman has made it clear that The credit fund led to excess liquidity chasing assets prices, hedging or arbitrage investing.
data from the People's Bank of China, in 2009, money supply grew rapidly, a substantial increase in new loans In 2009 12 at the end, the broad money supply (M2) amounted to 60.62 trillion yuan, an increase of 27.68%, an increase over the previous year high 9.86 percent. narrow money supply (M1) totaled 22 trillion yuan, an increase of 32.35%, increase over the previous year high 23.29 points. currency in circulation (M0) amounted to 3.82 trillion yuan, an increase of 11.77% In 2009 year, the cumulative net cash 402.7 billion yuan In 2009, RMB loans increased 9.59 trillion billion, up by more than 4.69 trillion yuan. It should be noted that the end of the year 2009, corresponding to the implementation of monetary easing is determined after the sharp increase in money supply in 2008 after 12 months. Thus, the Chinese currency issue and fast loan growth, increasing the amount of how much. The history of the Chinese economy over the past several occasions, Government to stimulate economic development, the state also launched a capital investment of RMB 4 trillion project. 4 trillion of them in this, the central government invested only a part of most local governments need to support. The central government plans to ensure that the full 4 trillion implementation, the local government may continue this year, loans to meet the matching requirements. It is reported that in early 2008, the national platform for investment and financing of local governments total debt of 1 trillion yuan by 2009, then increased rapidly to 5 trillion, most of which came from bank loans. As of the end of 2009, government financing platform, the loan balance is about 6 trillion yuan. Bank of Communications, Center for Financial Research said in a report, the local government, often through multiple financing platform companies to obtain credit from banks to form a weight.
credit for such large-scale, some experts have given the explanation that in order to ensure national economic growth. Moreover, the government's economic stimulus plan, and strive to maintain the 8% rate of economic development, it is also a advantage of the global financial crisis, the time difference to adjust the industrial structure and upgrade the country's overall innovation capability of this deeper meaning. from the current state of view, this goal is far from being achieved. Therefore, policies to stimulate the economy have to continue.
need to note that, with the massive credit growth, low interest rate policy in the execution. Despite continued calls for interest rate requirements, but has not been a rate hike. which, of course, may take into account factors such as international economic diplomacy. Moreover, in 2009, on the basis of low interest rates, real estate, consumer loans also are playing the 7 fold. home loans interest rates even lower than the base rate, which is contrary to the United States.
U.S. interest rate differential against the borrower to take , that is the different rates of credit are not the same as the loan. once, the U.S. federal benchmark interest rate is 0.25%, while the personal housing mortgage loan interest rates to 5.3%, the secondary housing mortgage credit are even more likely to rate as high as 9%. In China, the benchmark interest rate is higher than the United States, such as the one-year deposit rate is 2.25%, one-year lending rate is 5.31%, but in 2009 the personal housing mortgage loans prime rate is 4.158 percent, much lower than in the U.S.. < br> in the international arena, there is public opinion in criticizing China's interest rate has been in a long time been too low. Critics point out that if, as the Swedish economist Knut b Victor Serge (Knut Wicksell) assumed, nominal interest rate is approximately equal to the natural growth rate of GDP, then most of this century, China's interest rate should be close to 10%. Federal Reserve (Fed) Chairman Alan b before Greenspan (Alan Greespan) has been accused of being the interest rate the weight of too low, causing the U.S. housing and credit bubble. But if the U.S. monetary policy is wrong for the United States, then, for those error even more serious. of course, want to see is that this criticism may be too extreme. According to this logic, according to Knut b Vic Searle assumptions, GDP growth in the realization of China's insurance necessary to achieve the 8%? If it happens, is frightening. In fact, it was pointed out that China's GDP growth rate reached 8%, calculated in accordance with internationally accepted standards, coupled with the presence of water data may, in fact, not only about less than 0.
but in any case to see that, due to the threat of inflation has been high on the Chinese government need to consider raising interest rates to combat inflation in a timely manner. Experience has shown the world economic governance, continuous, adequate range interest rate, is the most effective means of combating inflation.
put a lot of money and credit growth in the stock market bubble in the housing market spawned
In fact, it is because a lot of money into large-scale credit growth, the market liquidity abundant. excess liquidity, inflation expectations, the mad chase of the asset price inflation and investment, speculation, continue to promote housing and other asset prices. Moreover, the low interest rates, low capital cost of credit, increase credit flexibility in funding to promote the power of inflation, making the investment in real estate and other assets, greatly reduced the risk of investment real estate to buy a house, store to buy land and stock returns is expected to greatly improved asset bubbles.
the stock market in 2008 The most crazy period, the Shanghai stock market book value (pbr) more than 7 times higher than Japan's stock market in 1989 to 5 times. In addition, China's residential housing prices to income ratio, but also the United States and other countries Real estate boom to shame. recent data that the ratio of rental housing in Beijing 1:495, which means leasing a suite at least 40 years to recover the cost.
the situation in China today, almost 80 years in the last century in Japan Like most of the time. At that time, the Bank of Japan pedal to the metal to increase credit, the government placed on window guidance of monetary policy on bank lending, relax banking supervision, launched a full commercial bank lending to the patriotic spirit of the carnival, along with supported by the G7, the rapid appreciation of the yen, Japan's bubble opened last crazy big screen. After a hundred years management experience in quasi-capitalist economy, the Japanese government, the economic frustration suffered depression for years. In contrast, the Chinese economy is may embark on a disastrous course as Japan? face up to the citizens and the population may be the biggest bubble in history, the Chinese economy can, as stoically as the Japanese economy through the economic crisis may be followed or at least economic turmoil? author Chen sincerely believe that these issues are worth pondering.
particular, but also to see that a lot of credit funds in various ways into the real estate market, into the stock market into a state-owned enterprises, China economy of the country back into the phenomenon, there has been resources, capital, market rapidly to large enterprises, focused on the phenomenon of state-owned enterprises.
economic stimulus plan by the Government to invest in the largest proportion of investment in infrastructure construction, and participation in infrastructure Most of the enterprises are state-owned construction enterprises, the objective of making fiscal stimulus plan money supply and credit supply while focusing on the state-owned enterprises. a public opinion that the national plan 4 trillion of funds, most of the state-owned enterprises or fall upon local government agencies. and private enterprises in the economic stimulus plan in the fiscal and financial support to obtain much lower proportion of SMEs get less. Therefore, the economic stimulus plan, the objective gave birth to a certain extent the country back into loans and some into the real economy exacerbated overcapacity in some industries, excess supply of some products, the abundance of cheap credit funds, on the one hand and medium-sized developers to flow mainly through real estate development projects, on the other hand the flow of real estate through the state-owned enterprises development areas. cheap credit funds flush with developers, especially in some large state-owned enterprises, based on inflation expectations, excessive government support of housing prices expected to rise further under the house, the land under the government monopoly prices is expected, have the trouble on the land market, continue to push house prices, land prices. rising premium on, he posed the most original cost price theory inverse housing prices, pulled up housing prices is expected, making the Chinese real estate market has become increasingly abnormal.
January 14, 2010, the National Development and Reform Commission, the National Bureau of Statistics survey, December 2009, 70 cities nationwide housing sales price rose 7.8%, the seventh consecutive increase over the same period , or more than 2.1 percentage point increase the previous month; chain rose 1.5%, or more than 0.3 percentage point increase the previous month. Comparison of historical data shows that, in December 2009, the National house prices year on year and sequential increase in more than 11 months. enter In 2010, housing prices still continue to rise. According to the State Development and Reform Commission, the National Bureau of Statistics survey, January 2010, 70 cities nationwide housing sales price rose 9.5%, or more than in December 2009 expanded 1.7 percentage points ; chain rose 1.3%, or lower than in December last year, 0.2 percentage points. is worth noting that the country is the eighth consecutive month house prices over the same period increased, but also since March last year the chain increased for 11 consecutive months, Shanghai and other cities have been rising continuously for 12 months. Moreover, the objects of the same period last year, is the result of the last round of price increases under the high base.
2009, the house prices in some areas up within six months more than 50%, for the full year, housing prices up to 50% of the city a few, in some areas the rate of increase greater than 50%, even more than 100%. Shanghai, Beijing's housing prices have been from a few years ago, a few thousand dollars per square meter rose to about 2 million, within six months housing prices in Shenzhen rose by more than 50%, stir again by real estate in Hainan, Sanya a month house prices doubled, housing prices in Guangzhou many times leading the country to rise. Many areas of the country's housing prices rose, and statistics show a tremendous contrast to a few percentage points.
eighth consecutive national house prices rose over the previous year, compared with the tenth consecutive month ring up the previous month's data, more and more market analysts and developers that have formed the real estate market bubble exacerbated the problem of asset bubbles in real estate and other concerns. The main reason is that in the past year stimulus and a series of large-scale real estate credit growth.
only to non-normal market situation in which, despite high prices have been a serious threat to the housing needs of the people need to be the government, the experts also promise to claim housing is not high, many related to the real estate industry to shoulder the task of stimulating economic growth reasons, advocates of preferential policies to continue to be exciting, trying to push prices to higher prices, although China's housing prices have seriously than most families capacity, even though housing prices in China than the United States and other developed countries is even higher.
prices in China than the United States
Mr. Xie Guozhong you have stated publicly that the price for office space in New York Island, now only Shanghai's Pudong district office half the price, while the per capita wage is seven times that of Shanghai. Maybe somebody will say, since the end of 2007 since the U.S. recession, U.S. companies laid off to reduce the demand for office buildings, shopping centers and office buildings led to no one is interested, commercial real estate prices getting low. Thus, the U.S. office prices may not represent the level of U.S. housing prices.
For this, Mr. Jin Yanshi the author gives a responsive answer: housing prices in Chinese cities than in the U.S. expensive, This is not news. Mr. Jin Yanshi author pointed out that the vast majority of American-occupied residential to single-family residential based. Even the highest prices in the United States in 2007 when the U.S. single-family residential housing prices moderate, but also median family annual income is only about 4 times, now down to 3 times.
and the Chinese property market than the United States the biggest difference is the area of property ownership, the United States have both houses and residential area. In addition a large residential area of difference is the calculation of the valuation of residential units in China, the construction area, the villa is no exception, are considered an area of the garage and basement. priced residential units in the United States is comprising an area of algorithm is equivalent to 300 square meters), in the statistical comparison of the 310 U.S. cities, the average price of residential buildings fell more than 363 thousand U.S. dollars, equivalent to about 2.48 million yuan Mei Dong, about 12,000 yuan per square meter. 84 cities, housing prices lower than $ 200,000, which is the cheapest Gelei Lin City, Michigan, less than $ 113,000.
in Manhattan, less than the price of luxury apartments luxury apartments Beijing CBD, and Shanghai Lujiazui area of comparable price is almost the same. the highest prices in the United States, California, in the greater Los Angeles area, in addition to the new port city of Beverly, and other luxury residential area, usually the middle class living in the house is not expensive. to Los Angeles as the center, the equivalent of six rings in the ring position Beijing, covering China, 1-2 acres, an area of 3,400 square meters of carpet detached villas, now taken over from the bank down the price of the hands of 30 million -35 million, equivalent to 80-100 U.S. dollars per square foot, are translated into RMB 6,000 yuan per square meter. similar comparable Shanghai villa, the price to more than 3 times higher. Golf in suburban Los Angeles house prices, low price of 100 million -120 ten thousand U.S. dollars , high prices in the 300 million -400 million, comparable to the Shanghai Sheshan Villas same is 30 to 100 million yuan or more, it is almost 3 times the price.
rental rate of return according to the Los Angeles suburb of 300,000 -35 million single-family homes, now in the 2000-2500 dollar range monthly rent, that is 10-12 years of rental return on investment. 70 cities, the average rental return on investment is about 30 years, Shanghai, Hangzhou is more up to 40 years.
natural than the real estate investment products, investors are natural like real estate, but real estate prices will one day be back to nature, to return to their nature primarily as a consumer. From this sense, we can today status of the U.S. property market, property market in China as the future prospects after the bubble burst. In the past five years, the famous Nevada Las Vegas is a city bursting housing bubble generation and a typical case.
real estate once the regression its consumer nature, the investment of premiums or asset bubble will suddenly disappear. With the investment in real estate prices and rising capital inflows, and outflows of funds as investment and real estate slump.
which can be seen out, whether residential or office buildings or other commercial real estate, housing prices in China than the United States expensive. No wonder my friend in France sent a including the price.
many problems of high prices is a centralized outbreak
can say that high prices caused by China are many reasons, the deeper it is the room under the social and economic system property system is a government monopoly of the supply of land and land administration system, from the shallow, it is housing prices had the support of the government attitude and policy to support the real estate market, has been ineffective against the high prices, a large number of running a massive increase in money and credit inflation is expected to further promote increased housing prices, cost of capital is the result of low credit risk is too low and the return of real estate is expected to rise, real estate investors against the government ineffective, on the store to store room Shill bidding profit combat ineffective behavior, is a centralized outbreak many problems.
in a highly leveraged properties of the forms of capital, the real estate to the huge liabilities of banks threatened to banks, thus threatening the entire economy. As a result, the Housing Bank prices fell so hard, bureaucrats anxious for falling prices, it emerged last year's despite the massive public bailout. As a bailout, consumers lose your head, so wait and see who ahead of the market, so price increases developer sell, fueling the store to idle, the cover plate reluctant sellers, driving up prices and other bad behavior, contribute to the investment real estate speculators and other malicious acts. In the end, last year the government bailout of the result, the 2008 has just entered the adjustment of the channel's high prices, the end of last year, quickly bounced back up, then pushed to new, even more than the high peak in 2007. The author Chen sincerely believe that objective, the Government's rescue on the property, in fact, become of very high market prices, the price of the default history, real estate speculation and investment behavior of developers bidding security.
is, however, despite the high prices have been a serious threat to most people's basic living need, but there are still many people today stressed the need to continue to use policies to stimulate the real estate consumer, and its high-sounding reason that the government needs the real estate to boost mm national economic growth. In the eyes of the government and some experts, if not see the problem : extremely high house prices is not only a threat to people's lives, but also a threat to social and economic sustainable development. At this point, can not help but do not ask the Department of Housing and Urban sound experts, in such high prices, how to do 3 families move into new houses %, and apparently high proportion. In fact, the serious real estate speculation, housing prices continued to rise non-normal, the real negative impact on economic development has, to some extent ...
