As the wheels of time roll forward, we find that the cycle of pork is like a tide, with its natural laws. Usually in a three-year cycle, China's annual pig slaughter is as high as 600 million, but now, this number has shrunk to 100 million. On the stage of pig production capacity, the three giants have controlled most of the country, and they are like precision machines, constantly expanding, breaking the traditional pig cycle.
Once upon a time, pig raising was mostly a small ** livelihood, and when it was profitable, it was scattered. This effect leads to a three-year pig cycle. However, with the advancement of technology, the pig slaughter cycle has been shortened to six months, giving the market two opportunities to seize it.
Next year, the pig cycle may usher in **, but this year there is no rise, resulting in a negative CPI. In my speech yesterday, I mentioned that China's real interest rates are the highest in the world, and the reason behind this is that inflation in the United States is 89%, and real interest rates are still negative after raising interest rates. In China, the CPI is minus 05%, the interest rate may start from 351% rises to 4%, which is the highest figure in the world.
If the country does not introduce strong policies, the economy is likely to remain weak. But I **, next year the state may invest 10 trillion to stimulate the economy. In fact, 4 trillion bond investments have been announced today. Why 10 trillion because in 08 China invested 4 trillion, accounting for nearly 10% of GDP, and now, GDP has reached 120 trillion, if you want to stimulate the economy and change the law of economic operation, you need about 10 to 12 trillion investment.
Now, consumption and investment expectations are declining, once ** becomes the last buyer, it can drive economic growth through debt and investment, and private enterprises will follow.
Although M2 is increasing, there is stagflation in liquidity. The balance sheet is declining, and the asset-liability ratio is on the high side, some even reaching 100%. However, due to the depreciation of assets, people are not under pressure to repay bank loans, which allows cash flow to be maintained. But it also makes people lose confidence in investing, everyone is paying off old debts, and no one wants to take the risk of borrowing money to develop new projects.
At this time, the only possible thing is for the state to borrow money. Therefore, the state needs about 10 trillion to stimulate the economic cycle. Now, the speed of the economic cycle is like blood circulation, not that there is not enough blood, but that the blood does not circulate and flows too slowly.
In addition, the problem of triangular debt also needs to be solved urgently. Everyone is worried that the other party will not pay them, which leads to the reluctance of everyone to increase investment and reduce costs. This not only reduces employment and investment, but also puts the society into a state of deflation, which will lead to a decline in CPI, or even become negative. The ideal range for CPI should be between 2% and 3%.
Therefore, the problem facing our country now is how to balance the relationship between money and goods and maintain a dynamic balance in order to achieve stable economic growth.
In the past, the amount of money once surged, and the broad money M2 was as high as 280 trillion, which is comparable to the United States, Europe, and Japan combined. However, the inflow of large amounts of money into the real estate market has failed to effectively activate the consumption sector, thus limiting the liquidity of money. As a result, although there is abundant capital on the surface, in fact, there is a lack of circulating funds in the market, resulting in a surplus of commodities, and the CPI index declines. CPI is not only a consumer index, but also an investment vane. In the current environment, investment is declining, production is hurting, and the risk of the economy falling into deflation increases.
China's current economic challenge lies in how to resolve local debts and promote circulation. If local bonds and urban investment bonds can be effectively resolved, enterprises will receive financial support, and the economic cycle will naturally be active. At the same time, China's tax system also needs to be reformed, and consumption tax, as a tax directly aimed at consumers, may become a new growth point.
China is making efforts to readjust its economic structure and seek to diversify its market. In the face of the United States' restrictions, we have not only deepened cooperation with ASEAN, but also sought new partners in Europe. Despite pressures such as countervailing duty investigations, we seek to maintain relationships with all parties. In this process, China exports more and more intermediate goods, which is not only a response to the US policy, but also a strategic choice for the globalization of Chinese enterprises.
At present, Chinese enterprises are facing fierce domestic competition, but this is also an opportunity to enter the global market. China, which has a complete ** chain, should not be limited to the local market, but should look at the world. At the same time, the business model needs to change, and only those companies that can make their products to the extreme and achieve global scale production can stand out from the competition.
In summary, the current economic environment is the coexistence of challenges and opportunities, and only those companies with unique business models and cost-effective products can survive in the fierce market competition. Every economic crisis is a process of economic reshuffle, and it is also a moment of the rise of the new upstarts.