Goldman Sachs judged the same as I did:
There is a high probability that economic stimulus will be increased next year, but this is likely to be wrong.
I am a feeling, a small personal blessing; Goldman Sachs has a data model, which is more scientific. However, there is a misunderstanding of the word science itself, and people always think that science is right and truthful; This is not the case at all, the basis of science is experience, the superposition of induction, the probability of infinite extension, nothing more.
In other words, such a multi-dimensional judgment of the economy can only be hypothetical.
Everyone is building data models, which is the favorite hard work of Dr. Ren's team, in fact, data is the fulcrum for judging trends, but the direction is the product of integrated thinking.
Will there be more stimulus next year?
The Chinese mind believes that things must be reversed, and they are not afraid of reincarnation, but they are afraid of wishful thinking.
The biggest problem in China's economy now is overcapacity, and there is serious overcapacity in both the real estate and the real economy, so how can this stimulate the economy?
A friend of the bank said that in the past, enterprises were chasing bank loans, but now banks are chasing enterprise loans, and enterprises lack orders, so what they need to do is not to expand their balance sheets, but to shrink their balance sheets; Not positively, of course. Does this mean that accommodative monetary policy has failed?
Of course not, in fact, everyone is still short of money, from localities, state-owned enterprises, private enterprises, and individuals, all of them are highly indebted, how can they not be poor in money. The question then becomes how to repair the balance sheet.
If there is overcapacity, how can the balance sheet be repaired?
This is back to the topic.
It is still necessary to stimulate the economy and widen the fiscal deficit; In fact, the direction has been clear, and the deficit ratio has been adjusted from "first-class debt" to "first-class debt", extending the debt cycle in the hope of stimulating a high growth.
This is actually very serious, because in addition to the breakthrough of foreign trade, I can't see the logic of high growth? Everything is very contradictory, but there is no choice, not only Goldman Sachs, I believe everyone understands that increasing economic stimulus is not a choice, it is a must. However, we are all likely to be overly optimistic about China's financial environment, which is already very resilient.
Therefore, the key is what kind of stimulus, can it produce benefits, and break through the blockage between investment and consumption? If you can't, it will end up being worse. What I know now is that we are going to invest again, not to invest in high-speed rail, but to invest in water conservancy.
In fact, this in itself is not very important, but what is important is that there is a fundamental problem of relying on investment to stimulate the economy, investment is systemic, and state-owned enterprises are in charge, and these long-term project investments cannot produce short-term benefits, or even long-term losses, and have no impact on residents' incomes, because state-owned enterprises only support employment. With such "stimulus", can the economy get out of the predicament? If so, there would have been no economic downturn in the past decade.
Since it is overcapacity, since it is insufficient aggregate demand, the flow of resources to the private economy is the right way.
What is China's most fundamental problem?
Quite simply, it is clear to everyone that the imbalance between household income and economic growth defines Chinese-style overcapacity. In the past, to a large extent, foreign trade was relied on to export excess capacity, foreign trade declined, and the contradiction of insufficient domestic demand was also highlighted.
China does not issue banknotes, nor does it have a hard target to improve the social security mechanism for all people, so there is only one way to raise income: to promote the private economy.
Therefore, the private economy is the key to economic recovery.
Because of the employment supported by the private economy, there are 150 million market players in itself, which is China's economy and people's livelihood. The social contribution rate of the private economy cannot be made up by state-owned enterprises in the past 40 years. From this point of view, to intensify economic stimulus, we must take the development of the private economy as the core value orientation, with the aim of adjusting the primary distribution, expanding the middle-income group, and increasing the proportion of residents' income.
The problem is that as of today, we have not seen a more powerful policy introduced, and what the policy is more eager to break through is foreign trade and international relations.
In addition, domestic demand needs to be supplemented.