More than 20 years ago, China joined the WTO, and taking advantage of this opportunity, Japan's economy has developed rapidly since then.
Even after the global financial turmoil in 2008, it was only a pause button, and then restarted, and the growth rate was still ahead of the developed countries in the West.
But this year, we have encountered a difficult situation that we have not encountered in the past 20 years.
In the past 20 years, exports have become an important engine to promote economic growth, but with the changes in the global environment and intensified competition, China's export situation has gradually become severe.
China's export dilemma is caused by many aspects, the rise in labor costs has led to a decline in the competitiveness of the manufacturing industry, which has impacted China's competitiveness in labor-intensive industries. At the same time, some emerging-market countries have advantages in low-cost manufacturing, attracting foreign investment and manufacturing orders.
** The rise of friction and protectionist policies has also taken a toll on China's exports.
The increase in uncertainty in the international environment and the increase in tariff barriers and restrictive measures have hindered exports. Disputes between major partner countries have brought great uncertainty to China's export market, which has made foreign investors more cautious about considering investment and orders in China.
And at home, the shadow of deflation is also looming from time to time.
In the past, ordinary people often faced inflation, but now, the country may face the risk of no longer the highest price.
Last month's consumer price index (CPI) was negative by 03%, prices are no longer **, and even beginning**.
While on an individual level, prices** mean increased consumer purchasing power, deflation can lead to a range of problems from an overall economic perspective.
On the one hand, when prices persist, companies tend to wait and see, reluctant to increase investment.
After all, they expect sales to be further, leading to lower profits. This wait-and-see mentality will hinder companies' expansion plans and dampen economic growth.
At the same time, deflation can also lead to downsizing in order to reduce costs. Employees who lose their jobs will face financial hardship, and the reduction in income will further reduce their spending power.
This will create a vicious circle in which companies reduce investment and lay off workers, leading to weaker consumption and further exacerbating the problem of deflation.
In addition, deflation can have a negative impact on debt and debt ratios. In a deflationary environment, the real burden of debt increases because borrowers need to repay more than the price of goods**.
This is a burden for individuals, businesses, and can lead to more debt defaults and economic instability.
A lot of people are worried about how we can deal with these two situations
In fact, things are not as bad as imagined, this is just the pain of China's economic transformation.
In fact, there are many reasons for the decline in exports, and environmental factors are one of them.
First, the continued interest rate hikes in the United States have had an impact on the global economy. Therefore, the decline in demand from European and American countries has inevitably affected the reduction of China's exports.
The problem is not just with China. Other manufacturing and export-oriented countries in Asia are also facing the dilemma of declining exports, but the decline has been high and low.
But China, unlike other countries, has made efforts in high-end manufacturing, and has achieved good results.
For example, the benefits of China's exports of new energy vehicles may be more prominent than those of products that are exported in relatively large quantities but with low added value.
Therefore, we should continue to optimize the structure of the domestic manufacturing industry, as long as we get through this period of difficulties, the future will usher in a new 20 or even 50 years of rapid growth.
The temporary decline in CPI is the pain caused by the adjustment of domestic consumption structure.
In the past, China's consumption was mainly focused on physical consumption, such as food, clothing and household goods.
However, with the development of the economy and the increase of people's income, people's pursuit of quality of life and personal enjoyment is also growing. As a result, more and more people are spending money on services such as travel, culture and entertainment.
This summer, there has been an explosive growth in service consumption, and ** has also shown a significant year-on-year growth trend. This phenomenon shows that China's consumption structure is changing, and service consumption has gradually become one of the main driving forces of consumption.
However, we don't have to worry about deflation. We should be aware that the funds driven by service consumption will naturally flow to all walks of life, and ultimately achieve economic balance and stability.
Therefore, we can expect that CPI will gradually return to normal growth over time.