**: The general trend depends on finance.
Text: "Caijing" intern Wang Meilin, reporter Zou Biying.
The scholar who proposed the balance sheet (recession) in Japan at that time went to Beijing a few days ago and asked me by name to discuss this matter, and after the bursting of the real estate bubble in Japan in 1991, the balance sheet recession was lost, and it was lost for 30 years, which shows that this issue has attracted domestic attention. On December 16, at the Sanya Financial International Forum, Cao Yuanzheng, chief economist of Bank of China International, saidThe negative growth of the Chinese population at the beginning of 2022 means that the possibility of a balance sheet (recession) is long-lasting. At the same time, the per capita GDP of Chinese has reached 1$20,000, 1 from last year's World Bank high-income standardMore than $30,000 is a difference of $600, which can be said to be at the threshold of a high-income society. On the other hand, it also shows that China's development policies in low-income societies may no longer be applicable to above-middle-income societies, and if the policies do not adapt to the changes of the times, they may fall into the trap of middle-income society.
Cao Yuanzheng cited Latin America as an example, Argentina was the 10th largest country in the world more than 100 years ago, but people's income has been hovering at the middle-income level for more than 100 years. Argentina's new ** has adopted a very extreme policy in the hope of getting out of the predicament, which is the context of the current discussion:First, can a balance sheet recession be prevented in the face of persistently negative population growth?Is the current decline in prices and loans in China a sign of a recession?Second, is China capable of sustaining a high rate, breaking through the middle-income trap, and continuing to move towards a high-income society?
Cao Yuanzheng said that the most important symbol of a high-income society is a service society, service consumption is the focus of consumption, and the proportion of durable consumer goods continues to decline, both ** and sales will decline. At present, a similar phenomenon has emerged in China, the Engel coefficient has dropped to below 30%, and many consumer goods cannot be sold even if they are used for encouragement, but train tickets are hard to find during this year's summer vacation and National Day, which marks the beginning of the rise of service consumption and development consumption, and is also a sign of entering a high-income society.
Cao Yuanzheng said that Vietnam proposed to enter a high-income society by 2045, and it is estimated that China will also cross the threshold of a high-income society around 2025Modernization will be achieved by 2035, that is, the per capita GDP will reach the level of developed countries, but there are still major challenges to achieving this goal.
Cao Yuanzheng said that from the perspective of inflation, the United States has raised interest rates 11 times since March 2022, and the interest rate has risen to 55. The inflation rate is now above 3%, which is still one point short of 2%;The UK has raised interest rates 14 times, and inflation is still above 4%;The EU added 10 times, and negative interest rates turned positive. Under such circumstances, the sustainable growth of China's economy has become a global issue, especially in the period of entering a high-income society, and whether there are reasonable policy arrangements to overcome the middle-income trap is a key issue.
We are now in a new period of transition, the original growth momentum has been exhausted, the engine power is insufficient, new engines are emerging, in the first, what, can continue to exert force, become the core of the global problem, we believe that low-carbon economy is the only direction. Cao Yuanzheng said.
New growth momentumIn the past, China's GDP grew by nearly 10% a year, but few people paid attention to the total assets of the economy. We find that assets are growing at twice the rate of economic growth. Zhu Yunlai, former president and CEO of CICC, said at the forum that withAll kinds of assets are expanding rapidly, but the efficiency of asset output is relatively reduced. For example, during the 2008 financial crisis, assets were inflated through increased lending and bailouts, but the mismatch between inflated assets and actual productive capacity persisted.
Zhu Yunlai said that China's economy has experienced tremendous growth in the past 45 years, with a real growth of about 10 times, a nominal growth of about 90 times, and a growth rate twice that of the world, which is an unprecedented achievement in modern history. However, after a long period of rapid growth, the economic growth rate has slowed down, which is in line with the basic laws of economics. When new demand decreases, the rate of economic growth naturally declines. In the early days of socio-economic development plans, even tofu production plants needed special capital investment, but now these problems no longer exist, indicating that the production capacity is quite sufficient. With the long-term economic development, China has accumulated a lot, and the economic slowdown is understandable.
Zhu Yunlai pointed out that energy transition is an important topic at present. From a scientific and engineering point of view, photovoltaic power generation has the potential to replace traditional thermal power generation and coal power generation. Although photovoltaic power generation is currently costly, we can afford it, and this investment can be seen as an investment in environmental protection. According to preliminary estimates,Replacing an existing coal-fired power system with a photovoltaic system would require an investment of about 200 trillion yuan, or about 10 trillion yuan per year over 20 years. Considering that China's economy is 120 trillion yuan a year, such investments are feasible and necessary to protect our green homeland.
Zhu Yunlai said that China is pursuing green, low-carbon or even zero-carbon emissions. If we explicitly move forward with the energy transition, for example by announcing that we will not build new coal-fired power plants from now on, then we have already reached the goal of carbon peaking. On average, the asset life of a thermal power plant is 20 years, and after 20 years, the existing thermal power assets will be reduced to zero, thus achieving carbon neutrality. It is also a good opportunity to adjust the long-term development of the economy.
However, where will the funding for the green transition come from?Cao Yuanzheng said that green finance is a key issue at present. Currently, our balance sheet is largely dependent on the real estate market. Twenty years ago, however, property in China was primarily acquired through allotments. As the real estate market matures, real estate is endowed with **, thus expanding into an important asset. The same logic applies to carbon assets.
Cao Yuanzheng believes that in the past few years, China's low-carbon economy has developed rapidly, especially in the field of new energy vehicles, and China has become the world's largest producer. It took China about 17 years to get from the first to the 10 million, and only 27 months to go from the 10 million to the 20 million. China has a very large market, and all carbon reduction technologies are commercially sustainable. This means that as more and more financial capital begins to enter the green finance sector, the continuous conversion of assets will also form new balance sheets, replacing the balance sheets brought by traditional real estate, which is the core of preventing problems similar to those in Japan and Latin America.
Zhu Yunlai believes that it is very important to provide a clear framework and orientation. In the past decade, China has vigorously promoted low-carbon development, promoting the development of solar energy and wind power industries. "Right now, we're facing a problem that's just the right thing to do. If we stop building thermal power plants and we can peak our carbon emissions, we will naturally become carbon neutral after a twenty-year period of natural depreciation. Therefore, to identify the problem, to move forward unequivocally, to break it down to a scale of only 1 20 per year to build, with such a long-term decision, the likelihood of a major mistake will be smaller. Because only 5% of the adjustment is required per year, even if there is an error, it can be adjusted after a year or two with more advanced technology. The previous investment is still usable, just slightly less efficient. ”
Zhu Yunlai said that if we stop building thermal power stations, the future purchase of electricity will be photovoltaic, and the funds will naturally flow to the areas with income, and there will never be a shortage of funds.
The second important issue is opening up to the outside world. Zhu Yunlai pointed out that in the period of slowing economic growth, it is understandable that some problems need to be adjusted, such as the international situation is becoming more and more difficult, but we cannot give up because of difficulties. China should still be open to the world market. Historically, advanced countries have tended to be more open, while closed countries have struggled to make significant progress. Although there were many concerns when China joined the World Organization, it now seems that this decision has greatly improved our competitiveness. Competition may be the greatest driver of progress, and too much protection can lead to stagnation. The unilateral visa-free policy, as well as China's attitude towards opening up imports, used to be seen as a drain on domestic resources. However, boosting imports will not only help China participate in the world economy, but also bring development benefits. In the future, it may be necessary to consider reducing ** tariffs or even achieving a unilateral breakthrough.
Zhu Yunlai said that China has huge production capacity and abundant skills. Over the past 40 years, China has cultivated a large number of experienced workers and professional teams. These resources and capacities, if used in the domestic market, would mean that we have moved from a state of scarcity in the early days of reform to one where almost all needs are met today, except for a few commodities that are temporarily unproducible. From the point of view of the global economy,Many developing countries are still less economically sound than China, and they can actually make a significant contribution to socio-economic development with the help of China's production capacity, skills and large labor resources. It should be viewed from the perspective of global economic development. Despite all the protectionism and scrutiny, we still need to be actively involved in the negotiations and not have to adopt a confrontational attitude.