Thursday, February 10, 2011

China's Economic Outlook 2007, and Macroeconomic Policy

 Abstract: In 2006, macro-regulation achieved significant results, a preliminary check of the Chinese economy from the money and credit growth down the foundation is not solid, energy saving and pollution reduction is severe. in 2007 an increase of 9.5% of GDP, consumer prices rose about 3%, continue to better efficiency years, China's economic and social development for the new situations and changes and the outstanding problems in economic operation, the Central continue to strengthen and improve macro-control, initially to contain the Chinese economy from the showing a faster growth, better economic returns, the trend of low price levels, to achieve the caused by loose monetary liquidity situation has not changed, fixed assets investment, money and credit growth down the foundation is not solid, energy saving and pollution reduction grim .2007 is thoroughly implement the scientific concept of development, actively promote the socialist important year in building a harmonious society. must continue to strengthen and improve macro-control, speed up structural reform to improve the effectiveness of macro-control, the implementation of sound fiscal policy and monetary policy, and adhere strictly control the scale of investment in fixed assets, and actively expand the urban and rural residents, to adjust the import and export structure, speed up economic growth mode transformation, promote economic operation into a comprehensive, coordinated and sustainable development track.
a macro regulation achieved significant results
for the first half of 2006 economic operation of fixed assets excessive investment growth and the trend was increasing, excess money and credit, increasing imbalance in international payments, excessive energy consumption, increasing pressure on the environment and other outstanding problems, the State Council issued a series of control measures in a timely manner, in the second half pay close attention to the policy of economic work in the implementation of effective macro-control policy to gradually appear.
1, excessive fixed asset investment growth momentum has been checked
2006 in the first half, a distinct rebound in fixed asset investment growth, promote industrial production record breaking high-speed, second-quarter GDP growth reached 11.3%, economic operation by the to control credit growth and other specific control measures, and increase the intensity of implementation of the policy. the third quarter, along with the deepening of the inventory work, new projects slow growth, high fixed-asset investment growth rate began to drop .1 m11 months, cities and towns Fixed asset investment up 26.6% over last year, the cumulative growth rate down 4.7 percentage points over the first half. fell under the influence of investment, industrial production growth rate has gradually decreased 1-November, added value of industrial enterprises above designated size increased by 16.8%, the cumulative growth rate down 0.9 percentage points over the first half.
2, money and credit growth slowing down
rebound in fixed asset investment is one important reason for excessive money and credit .2006 6 at the end Broad money supply (M2) increased by 18.43% the balance, an increase of more than 2.76 percentage points over the same period last year; narrow money supply (M1) balance increased by 13.94%, an increase of more than 2.69 percentage points over the same period last year; All Financial Institutions Loans grew 15.24%, an increase over the same period last year, 1.99 percentage points higher than the 2.26 percentage point late last year. for high money and credit, put the outstanding problems, the People's Bank of China twice this year increased the statutory reserve ratio, the two times to raise lending rates, issuing bills and increased directional intensity of open market operations and window guidance to strengthen .11 end of broad money supply (M2) increased by 16.8%, an increase of more than 1.6 percentage points lower end 6. RMB loans increased Speed down steadily, reversing the trend of excessive growth of cumulative monthly increase of RMB loans .1-11 2.9667 trillion yuan, compared with 757.7 billion yuan more than the increase over the same period last year, the month of new .11 193.5 billion yuan of RMB loans, up by less 31.5 billion. less year on year growth for three consecutive months, the momentum of rapid loan growth was controlled.
3, the effect of policies to gradually expand the consumer release of the consumer market to keep 旺势
2006 years, the consumer goods market continued to maintain the purchasing booming trend, there is not short off-season, season even more vigorously good situation .1-11 month total, retail sales 6.8911 trillion yuan, up 13.6% over last year, compared with 0.7 percentage points a year earlier. consumer retail market trends Wang mainly due to central authorities have introduced a series of policies to improve urban and rural incomes. all over the increased minimum wage workers, increased the wages of migrant workers and debts in a timely manner to honor efforts to adjust the wages of civil servants, increasing subsidies to farmers urban and rural incomes increased rapidly. migrant workers to improve wages and timely cash and other policies to raise farm income, increased spending power of farmers, urban and rural markets to further narrow the gap between the city, 1-November retail sales up 14.2% and below the county retail sales up 12.5% gap between urban and rural market growth of 2.9 percentage points from last year narrowed to 1.7 percentage points. consumption structure was evident, household appliances and audiovisual equipment, construction and decoration materials, gold and silver jewelry, communications equipment, automobile, petroleum and products, sales growth of more than 20%.
Second, monetary liquidity is too loose rebound in economic growth so that the pressure remains
Despite initial success in macroeconomic regulation and control, but the foundation is not solid, economic operation of the outstanding contradictions and problems have not been fundamentally resolved.
1, possible rebound in fixed asset investment growth continue to exist
1-11 months total, China's total fixed asset investment growth rate of 26.6% year on year still high. large scale in the construction of the inertia of the strong investment growth. Although the macro-control policies on the access conditions for new projects, land management, made a new, provided that investment to promote economic growth and local taxes system, the government investment power but no responsibility system has not fundamentally changed the soft constraints, the institutional basis for expansion of investment and the contradiction between the macro-control policies will test the effectiveness of investment policy tightening. In addition, closely associated with the investment of money and credit expansion the problem is not fundamentally changed too loose. the third quarter, the RMB loan growth fell slightly less, and an increase in mainly through short-term loans and bill financing new small increase year on year to achieve, long-term loans are still more than the increase year on year. that long-term loans by impact of the huge growth in the construction of the scale of inertia is strong. from the long-term loans and investment capital in place of growth situation, relaxed environment for investment funds, investment growth remains the possibility of a rebound.
2, continue to record high trade surplus, Imbalances in international payments loose monetary liquidity situation has not changed
and 2006 the first 11 of the monthly cumulative trade surplus from January to November, China's foreign trade value of 1.593 trillion U.S. dollars, increased more than 311 billion U.S. dollars last year , an increase of 24.3%. which export 875 billion U.S. dollars, up 27.5%; imported 718 billion U.S. dollars, an increase of 20.5%. Although the export growth rate dropped 2.2 percentage points over the same period last year, import growth increased by 3.4 percentage points, but the trade surplus keep a record high, accumulated 157 billion U.S. dollars, increased more than 66 billion U.S. dollars last year, the surplus to expand the scale of 70% over last year. in the trade surplus and FDI inflows, driven by 11 at the end, the balance of foreign exchange reserves exceeded 1 trillion for the first time U.S. dollars, up 28.6%. a substantial surplus in international trade, promote foreign exchange base money increased delivery channels, resulting in the banking system is too loose monetary liquidity situation has not fundamentally changed. from balance of payments source control liquidity, and then control the domestic economy from overheating The need to further strengthen macro-control policies.
3, extensive pattern caused by the blind expansion of energy consumption, environmental pressures continue to increase, economic growth has not a fundamental change in the trend
as the Planning the first year of implementation, how to achieve sound and rapid scientific development are explored. in accordance with the In the data analysis based on experience, economy close to potential growth rate, but only in the potential growth rate of no more than run elasticity of energy consumption is possible the economy down to the long-term average near normal levels, the apparent deviation from the current rate of growth of the extensive potential type of blind expansion of the cost of China's economic growth is too large, economic growth in the structural contradiction, the smooth realization of the ; China's macroeconomic climate monitoring and analysis system little decrease in the basic situation. econometric models and policy background, according to the qualitative analysis, we expect the Chinese economy in 2006 under the guidance of macro-control policy, will continue to maintain rapid and stable growth trend, a slightly slower growth in the second half, but not significant decline. Annual real GDP growth will be 10.5%, 0.3 percentage points higher than the previous year, down 0.4 percentage points over the first half.
III, in 2007 China Economic Outlook
1, international and domestic economic better environment, but the uncertainties increase
2006, the country in the world increasing inflationary pressures, the developed countries in general to raise interest rates to cool the economy straight. national macro-control measures have produced initial results, the international oil price and bulk commodity futures prices there was a substantial adjustment, capital market and make the appropriate response. in 2007 the world economy will show only a slight adjustment. On the whole, China's economic growth in 2007 is still a better international environment, high oil prices, high commodity prices, the negative impact on our economy will be weakened, but the foreign trade protectionism negative impact on our economy will be significantly enhanced.
this stage, China's consumption structure promote industrial upgrading and urban factors of development of strong growth in domestic demand, demographic dividend and other demographic factors help China to maintain a high level of savings rate, driven by economic globalization and changes in international division of labor in favor of China in the global allocation of resources, these long-term favorable factors supporting the economy of this round rising phase of the extension period. Meanwhile, to further accelerate China's economic reform, including the functions of the government, financial institutions, land management system, energy consumption, environmental monitoring system and accountability reforms, including fiscal and taxation system is being steadily, and the government in a market economy conditions and level of macro-control capacity has been improving in 2006 introduced a series of macro control policies in effect will become more apparent in 2007. As in previous years investment in the productive capacity of the formation of production, domestic supply capacity to support economic growth and further enhance , coal transportation support conditions will continue to improve in 2007. all this for the next year, China's rapid economic stability and lay a solid foundation for healthy operation. Of course, the economy next year, there are some unfavorable factors, the balance of payments imbalances through currency liquidity Pine situation and the extensive institutional investment impulse is difficult to blind a remarkable improvement in the economic structure and growth mode need to be further changes in pressure and overcapacity in the pressure of employment and reemployment increase over 2006.
2, fixed asset investment in the policy guidance expected to fall under
2006 年 smooth introduction of the inhibition of excessive growth in fixed assets policies and measures, not only for the total control of monetary policy, fiscal policy, short-term demand management measures, many intended to adjust the investment structure, improve the quality of long-term growth of reform, especially improving land management system, focusing on industry standards to improve market access, resource products pricing mechanism for adjusting the system of energy consumption and environmental accountability, the economic, legal, administrative control measures in 2007 will further show the effects of policies. in 2007 of excessive growth of new projects will be significantly curbed the momentum of some non-eligible projects under construction or even halt the correction, which will help to hold the assets .2006 cooling investment 1-11 months, the amount of foreign direct investment actually used slight increase of 2.1%, blind investment has been subject to certain restrictions. Land Inspector system will further increase the implementation of land management policies, the strict control of the land is inhibiting investment in fixed assets in 2007 of the most critical aspects of a rebound. As long as the policy is properly implemented, fixed asset investment growth in 2007 is expected to a certain degree of decline, the investment structure was further improved macro-control will achieve substantive results.
but In 2007 the growth rate of fixed asset investment callback limited range, one at the building scale is too large, many new projects in 2006. As of the end of November, more than 50 million urban construction projects total 267,839, an increase of 37,590; construction projects The planned total investment of 20.0651 trillion yuan, up 21.3%; under construction needs to be carried forward to 2007 to continue construction of the huge scale of investment, investment growth of investment in 2007 will slow down the inertia limited. Second, monetary liquidity will inevitably lead to the loose difficult to control long-term loan growth, operating efficiency of commercial banks to pursue the goal of the credit contraction will make capital investment in fixed assets binding is limited. Third, sources of funding business investment loose .1-10 year, national large-scale industrial enterprises realized profits of 1.4697 trillion yuan, up 30.1% over last year. industrial economic efficiency index 187.29, 17.12 points over last year to improve its own funds .2007 enterprises more abundant, loose monetary conditions also enable enterprises to better self-financing.
comprehensive the above analysis, macro-control policies, if implemented well, can be formed in the land of hard constraints on investment, capital investment in fixed assets has been strengthened over 2006 constraints. In tightening macro-control policies and market forces to compete in the spontaneous expansion of the two, Fixed asset investment in 2007 will slow down slightly year is expected to total fixed assets investment up 20% of the nominal urban fixed asset investment growth of 22% in nominal and real estate development investment of about 21% nominal increase.
3, consumer goods market continued to remain active strong trend
2007 maintain a rapid growth of consumption demand more favorable factors. In recent years, our government to increase spending on economic development role in boosting the strategic policy of expanding domestic demand as adhere to the focus, the implementation of a series of conducive to expanding consumption farmer-friendly policy. adjust income distribution, increasing the income of low-income persons. increase the income of the farmers in the implementation of minimum hourly wage. gradually solve the problem of low wages of migrant workers, establish and improve laws to prevent wage arrears and mechanisms for careful implementation of the revised personal income tax law, reducing the tax burden low-income persons, and appropriately increase enterprise retirees basic pension benefits, standards for financial aid entitled groups, urban minimum living subsidy standards, and reform the civil service wage system and a unified position and rank and salary system and the mechanism of regular pay increases. In recent years, by accelerating the improvement social security system and solve the education, health, housing and other areas of outstanding problems, to reduce the worries of residents to increase consumption; also vigorously develop the rural consumer market, strengthen the construction of rural circulation system and the market to support the business of urban distribution network extending to rural areas for to facilitate the farmers to increase consumption. These policy measures have achieved significant results, the basic income of urban residents in 2006 and economic growth simultaneously to achieve the level of growth, increase farmers income for several years on the basis of higher to maintain a rapid growth. Meanwhile, the economic boom significant improvement for many years to run high income urban and rural residents is expected, consumer confidence .2007, the government policy of expanding consumer orientation will continue to build a socialist harmonious society launched a series of measures will be Waste Management and have been implemented, consumer getting better and better policy environment for growth, to maintain a rapid growth in urban and rural incomes, strong consumer trend of market activity is expected to continue in 2007.
2007 annual consumption growth is also facing a number of adverse factors, first by the real estate control policies, housing Volume growth will slow down, housing-related spending to improve the leading role will be diminished. Second, the income of the farmers to continue rapid growth more difficult. Third, health care, education, pensions and other government processes and the improvement of public services, the people a wide gap between the strong demand, consumer worries very heavy consumption of urban residents was significantly lower than .2006 first three quarters of income growth, per capita disposable income of urban residents and 10.0% year on year real growth, real per capita consumption expenditure increased 7.5% year on year, a difference of 2.5 percentage points, the gap expanded more than 1.5 percentage points a year earlier.
comprehensive analysis, in 2007 total retail sales of consumer goods will continue to maintain the momentum of rapid growth, the consumer to further accelerate the pace of upgrading of the structure, transport, communications, tourism , food, education, medical centers and other services grew faster than consumer goods, consumer market is strong trend, rapidly improving living standards of urban and rural residents.
4, import and export growth, increased uncertainty on the 2007 international
the U.S. economy and world economic trends to determine divergence, and some even pessimistically predicts that the U.S. housing market will bring down the U.S. household consumption fell, U.S. economic growth will be reduced to 1.9% (3.6% originally expected), prediction will be greatly affected China's exports. We believe that over the past decade, the world economy significantly enhanced impact resistance, weak. the world economy the main reason for increased shock resistance, first, the impact of economic globalization in the global spread risks, and second, technological progress to increase the contribution rate of economic growth, oil and other traditional elements of economic growth weakened .2007 The world economy continued to grow steadily more favorable conditions, the economic globalization of trade between countries to rely on the constant increase in world trade growth callback rate limited.
from the domestic perspective, since the second half of 2006 introduced a series of international balance of payments, adjustment of trade growth, improve the quality of foreign investment policy will be further implemented in 2007, the impact of import and export trade will be gradually revealed. domestic export control policy of growth factors and cool the domestic economy will also have a greater impact on imports. However, significant labor cost advantage in China, increasing domestic terms of trade facilitation, technological progress and enhance its international competitiveness, foreign trade structure of processing trade and other long-term factors determine the pattern of growth in world trade in a favorable position, considering the moderate world economic slowdown, China's investment and industrial cooling, appreciation of the renminbi, the domestic policy adjustments and a variety of import and export trade in the short and long term of different factors, China is expected in 2007 more balanced development of foreign trade, annual export growth of 15% to the previous year dropped by nearly 10 percentage points. imports rose 14%, down 6 percentage points over the previous year, the trade surplus of about 180 billion U.S. dollars.
5, China's economy maintained steady and rapid growth in the world economy remains
assumes steady growth, steady pattern of slight decline, although the fluctuations in international oil prices, but on average slightly lower than 2006 levels, domestic and international economic development did not affect the major conflict Fat incidents; macro-control policies on the steady operation of tight, overheated economic governance have been promulgated the policies and measures (in particular, land control measures) to achieve better implementation and to continue to introduce changes according to the actual operation targeted fine-tuning measures. continue to implement prudent fiscal policy, GDP, fiscal deficit continues to decline, expenditure to the benefit of expanding consumption, improve people's livelihood, technological innovation, energy saving and new rural construction in the direction tilted; implement a prudent monetary policy, broad money and narrow control money supply growth rates were 16% and 14%, the scale of 3 trillion yuan of new loans, but strict control of the proportion of long-term loans. In these conditions, gross domestic product in 2007 will grow by 9.5%, an increase of more than 2006, down 1 percentage point, down to 8% -10% of the potential growth range. sub-industries, the primary industry after two consecutive years of rapid growth, the growth rate from 5% in 2006 down to 4.5% . secondary industry declined by the impact of investment growth, a decline of heavy industry and construction growth, large-scale industrial added value in 2006 from 17.1% to 15% slowdown, but also by the secondary industry growth of 12.2% in 2006 slowed down to 10.7%. by the steady growth in consumer demand and the policy implications of expanding consumption, the tertiary industry growth rate is expected in 2007 to the previous year. Consumer prices rose 3%.
four stable macro-control policies in 2007 tight
2007 in China's macro-control policies in general, should adhere to the stable and tight orientation, prudent fiscal policy and monetary policy, continue to strengthen and improve macro-control, focus on adjusting the economic structure and change the mode of growth, focus on strengthening resource conservation and environmental protection, efforts to promote reform and opening up and independent innovation, strive to promote social development and livelihood issues, to continue to curb excessive growth in fixed asset investment to further consolidate macro-control as the core of the results, pay attention to the balance of payments from the change in control of the economy heat source of funds to strengthen the coordination between the various policies, give prominence to the implementation of policies already in place to further improve the effectiveness of macro-control policies. promote the economic and social development effectively into the track of scientific development, efforts to achieve national economic and good and fast development.
1.
fiscal policy to adjust fiscal policy to play a better national economic performance, and promote economic restructuring and significant role in sustainable development. accelerate the Enterprise Income Tax Law of merging the two. To grasp the full implementation of the VAT reform of the specific proposals and supporting measures, make preparations before the reform; to fulfill and implement the new land use tax, vehicle and vessel tax regulations; to adjust and improve urban land use tax standards, the introduction of the implementation of new resource tax system. promptly improve the fuel tax reform program and choose the implementation; perfect stamp policy; closely followed the introduction of real estate has been the implementation of tax-related effects of regulatory policies, and continuously improve the relevant policies and measures; to be in strict accordance with the provisions of the Housing Provident Fund benefits and some land for urban housing security income. to further adjust export tax rebate rate, adjusting the structure of export products, in order to reverse the imbalance of international payments provide a more rational tax system environment.
actively adjust the orientation of direct government investment, infrastructure facilities focus on the transfer of public services, increase basic education, public health, rural construction, innovation capacity-building, social security and rural public services, resource conservation and environmental protection investment.
Government Procurement intellectual property rights should vigorously support the significant technology focus. embodying the will of the state government procurement, technology development to support its major policy tool. shall, as soon as the government procurement into the national innovation system, bring government procurement of major technologies with independent intellectual property rights enabling role, to accelerate its pace of industrialization.
2.
domestic monetary policy, the deep-seated contradictions in economic and financial decisions of the phenomenon of excess liquidity will persist in 2007, it will not help to curb investment and asset prices excessive growth. proposed in 2007 a prudent monetary policy tight in the steady operation, continuing to control the excess liquidity as the core of monetary policy, adhere to the to strengthen liquidity management, and investment according to changes in economic operation, the camera taken to improve the deposit and lending rates, raise the statutory deposit reserve, open market operations, directed to issue bills to commercial banks, regulate market liquidity, reasonable control of money and credit growth and maintain an overall balance; same time to further improve the exchange rate formation mechanism of RMB exchange rate flexibility, enhance appropriate, increase the capital account convertibility reform. actively adjusted M2 growth in the credit structure .2007 rate should be controlled at about 16%, M1 growth rate should be controlled at 14% growth target for control of yuan of new loans in less than 3 trillion yuan. to increase the adjustment of interest rate policy, improve the cost of capital, to prevent the continued rapid rise in asset prices .
3, streaming foreign exchange reserves, foreign exchange policy
actively promote the diversification of official foreign exchange reserves and use. to possession of the Meeting to the people, for the residents held a variety of forms to create conditions for the use of foreign exchange. According to the international market of crude oil, important strategic materials such as metal price changes, timely strategic materials to increase reserves, expand participation in global commodity trading; reserve assets necessary to meet the liquidity and safety of the premise of excess reserves to set up a special investment institution separate and expand reserves investment channels, to extend the investment period, reserve assets, foreign exchange reserves to increase the level of investment income, and promote active management of foreign exchange reserves.
strengthen the foreign exchange market. in breadth, to encourage the development of RMB derivatives, have been allowed to offer yuan in long-term and mutual based on the change and continue to launch RMB option and futures; in depth, improve the RMB forward transactions, making enterprises the main tool to avoid foreign exchange risk, allowing banks to participate in the offshore RMB NDF transactions, so the banks can hedge net foreign exchange positions held, increasing the liquidity of the renminbi forward market for the spot exchange rate of RMB found a reasonable basis to provide market level.
order to fully reflect changes in current account, maintain the international balance of payments, should be expedited establish international standards, a standardized system of trade in services statistics: First, the establishment of trade in goods trade in services statistics corresponding to the monthly statistical report system; second is to establish national trade in services statistics system; third is to establish import and export statistics system related service industries .
4.
investment policies inhibiting investment in fixed assets in the same time, to adjust the investment structure focused and continue to implement the industrial development and industrial upgrading policy, land policy, environmental standards, safety standards, and many other requirements. to continue to strictly control market access, increased industrial market access. rigorous examination of fixed assets investment projects that do not meet the national industrial policy, energy saving, environmental protection, security, land and other requirements of the project, shall not be approved; on illegal construction projects, should be corrected in a timely manner, carry out its construction procedure. corresponds to review the project for approval, procedures should be strictly in accordance with auditing procedures. non ultra vires review prohibited dismembered avoid review. We will promptly formulate energy-saving assessments of fixed asset investment projects and review of the specific measures, the energy consumption standards as project approval, approval of the mandatory threshold. to pass environmental and safety measures to limit investment in related industries. as soon as possible develop and improve the urban environmental capacity of each functional area standards, strict control of access to environmentally sensitive areas related industries
5. Land Policy
2007 Land policy should be released this year in implementing the Notice annual plan of land use management and assessment, to strengthen the land and around the actual construction of the verification of the collection of land revenue, land inspectorate for local governments to strengthen supervision and inspection of land management. Second is the distribution of land revenue adjustment mechanism, will state-owned land use right transfer the total purchase price in full into the local budgets, in order to curb blind expansion of local government land the size of the impulse. make the total of state-owned land use right transfer price uniform transfer of the lowest standard disclosure systems do price transparency, information disclosure. Third is to strengthen local government land management responsibilities, the provincial government on the amount of cultivated land within the administrative region, the basic farmland protection area overall responsibility.
6 .
foreign trade policy to promote transformation and upgrading of processing trade, processing trade enterprises to strengthen the guidance of supporting industries, and gradually from generation to generation of process design and create their own brand development, processing trade enterprises to encourage more use of domestic materials and parts, extension of the processing trade the industrial chain. sound important commodity exports for early warning and coordinated response to trade friction. excessive growth of exports, likely to cause some trade frictions limit the export of labor-intensive products to take voluntary measures to increase domestic shortages of key goods and advanced technology equipment imports. further improve the utilization of foreign capital and foreign investment work. further amendments, the implementation of foreign investment industries guide policy, improve the package of measures to encourage foreign investment in the project approval system and national coordination mechanisms, support and guide the qualified enterprises to transnational mergers and acquisitions. actively develop overseas processing trade, transfer part of the surplus. encouraging some companies to back- transferred out of processing capacity, driving the upper reaches of processing equipment and exports, the nearest open up the market.
National Information Center Director Fan Jian

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