Bloomberg is reporting that the following story from the People’s Daily is spooking markets, forgive the Chinglish:
This year is the decisive stage of building a moderately prosperous society and “Thirteen Five” the first year, but also to promote crucial year for the supply-side structural reforms. A quarter, in the face of complex domestic and international situation, the country has achieved economic development, structural optimization, a good start to improving people’s livelihood, but also facing a series of deep-seated contradictions and problems. For how to adjust the Chinese economy to see, how to do it? Recently, this reporter an exclusive interview with the authorities once again, for the Chinese economy interrogation pulse.
First, see how the economic situation?
■ overall situation of the economy in line with expectations, some bright spots better than expected. But the contradictions inherent in the economy did not ease, some new problems have exceeded expectations. It is difficult to describe the simple concept of “good start”, “Indian summer”, etc.
■ comprehensive judgment, our economy can not be U-shaped, but can not be V-shaped, but the L-shaped trend. The L-type is a stage, not a year or two past
■ “step back” in order to “two steps forward.” Our full economic potential, toughness, large room for maneuver, if not exciting, not to go down speed
■ some economic indicators rise, not glowing terms; some economic indicators down, do not panic
Q: The first quarter of this year, China’s GDP grew 6.7%, is still running at a reasonable range, better than market expectations. Meanwhile, some other economic indicators also significantly appear warm. Some people think that China’s economy to achieve a “good start”, it was considered into the “rebound” more optimistic believe that China’s economy has bottomed out, it will show a U-shaped recovery. This is not a description of the development trend of economic change? For the Chinese economy short-term and long-term trends, what your judgment?
Authorities: In general, a smooth start to this year’s economic situation. The overall situation of the economy in line with expectations, some bright spots better than expected.However, the contradictions inherent in the economy did not ease, some new problems have exceeded expectations. Therefore, it is difficult to describe with a simple concept of “good start”, “spring” and so on. In the end to see how? Or to insist on two points, or to combine development and in view of the international context.
From the first quarter of this situation, we hope that stability aspects, stabilize, and some even unexpected rebound. GDP grew 6.7% in the first quarter, the employment situation is generally stable, steady income growth. General economic and financial risk control, social stability. Part of industrial prices rebounded, industrial enterprises benefit from the fall turn liter; fixed asset investment accelerated, substantial growth in new projects; supply and booming real estate market, to accelerate inventory significantly.
We hope that aspect into, but also made new progress. Continue to enhance the service industry, a new model, the emergence of new competing formats, high value-added, high-tech products and the rapid growth of the consumer escalation, “51” small holiday hot domestic tourism, the Yangtze River Delta, Pearl River Delta initiative to adapt new normal, focusing on the needs analysis, the pursuit of innovation and quality and efficiency of the region, the stability of economic growth strengthened. Especially the various regions and departments of the importance of supply-side structural reforms increasing awareness, according to the requirements of the central active work effectiveness is gradually emerging.
However, it is undeniable that we are faced with the inherent contradiction has not fundamentally resolved, some new problems have also been exposed. “Stability” of the foundation is still mainly rely on the “old way”, that is investment-led, large fiscal balance pressure in some areas, increased economic risk probability. Especially private enterprises to invest a substantial decline, the real estate bubble, excess capacity increased, non-performing loans, local debt, equities, foreign exchange, bonds, and so the risk of illegal fund-raising point. Some lower market-oriented, industrial low-end, single structure of the region, economic downward pressure is still increasing, highlighting the problem of employment, social conflict has intensified. Thus, in the face of the main contradiction is down structural than cyclical situation, “into” is “stable” foundation. “In” is to solve the economic operation of the supply side, structural and institutional issues, which will take time, is still in the initial stage, the new power is also not afford to pick beam.
Comprehensive judgment, our economy can not be U-shaped, but can not be V-shaped, but the L-shaped trend.
I want to emphasize that this is an L-shaped stage, not a year or two past. The next few years, the overall weak demand and overcapacity coexist hard for fundamental change, economic growth is not possible, as once picked up it will continue upward as before and one after another to achieve high growth years. “Step back” in order to “two steps forward.”We are confident about the development prospects of China, China’s full economic potential, toughness, large room for maneuver, if not exciting, not much speed down. This must be internalized in the heart outside of the line. Some economic indicators to rebound, do not visibly; some economic indicators down, do not panic.
Pretty much what I’m expecting but this is apparently from some “top authority” whatever that means! Our own top authorities have already dismissed this with their forecasts so we can ignore Dalian which remains limit down…
