Regarding the direction of China's economy in 2024, there are various opinions from all walks of life, and no conclusion has yet been formed.
According to the International Monetary Fund, China's GDP could grow by 4 percent this year under ideal circumstances6%, but it also warns that if the real estate sector continues to be sluggish, the growth rate may fall below 4%. Nomura** and domestic brokerages and other institutions also focus on the figure of 4%. However, most domestic institutions are more optimistic, believing that China's economy can achieve 5% growth. The weighted target growth rate of each province announced by the local two sessions is as high as 53%, showing the ambition of the local **.
These differences stem from three core issues:
First, the future of the real estate market remains uncertain. When and where it bottoms out is not only related to whether real estate investment can stop falling and rebound, but also has a direct impact on the increase or decrease of household consumption. After all, the crowding out effect of shrinking assets on household consumption should not be underestimated.
Second, the debt problem is also one of the focuses of the constraints on infrastructure investment. The newly released "Circular 47" clearly restricts new investment projects in 12 provinces and cities, highlighting the constraints of debt pressure on local infrastructure. In 2023, many debt-stressed provinces failed to meet their expected GDP growth targets, which undoubtedly cast a shadow over economic growth in 2024.
Finally, the instability in the export sector cannot be ignored. After experiencing staggered growth from 2020 to 2022, the scale of exports in 2023 has declined. Looking ahead to 2024, it remains to be seen whether exports will be able to maintain their current size.
It can be seen that to achieve the 5% economic growth target, it may need to rely on real estate and infrastructure. But it is worth pondering how much substantial benefit such a growth path can bring.
When it comes to property, it is both a source of wealth and an engine of the economy. As an asset, it can bring considerable wealth effect to holders and promote the prosperity and development of many industries such as construction and home appliances. In China's special economic growth model, the overall contribution of real estate to the economy is particularly significant, which can be called economic"Dinghaishen Needle".
However, look at it from another angleProperty is likewise a burden。In the cycle of buying and selling, the roles of assets and costs are constantly changing, and it is difficult to determine whether the benefits brought by assets as assets exceed the cost paid as costs. The soaring price of housing is surging like a tidal wave, squeezing other consumer spending, making people have to face the pressure of life while pursuing a comfortable life and contentment. Looking at infrastructure projects, these huge projects can indeed create a lot of jobs and inject vitality into the economy in the early days. But over time, as projects become saturated, their positive spillover effects on employment and the economy wane. At the same time,The debts piling up behind it are snowballing and worrying
It's like spending a lot of money to renovate a property, which can increase its value, but excessive decoration, such as putting two layers of floor tiles and building a sink with a lot of money, is too extravagant.
Similarly, although infrastructure projects rely on public sector input, their financing process is becoming more market-oriented, which will undoubtedly intensify competition between the public and private sectors, weaken the positive effects of infrastructure on the economy and employment, and may even exacerbate structural imbalances in the economy. Therefore,While pursuing economic development, we also need to think carefully and seek a more balanced and sustainable development path.
The reason why China's economy appears to be weakThe core of this lies in the fact that under the intertwined influence of multiple factors, the residential sector has gradually lost its former vitality and confidence。The downturn in the market and the decline in real estate values are like two invisible blades cutting through the stock of wealth in the residential sector. Conservative estimates,From 2021 to 2023, residents' wealth management accounts have decreased by 2 trillion yuan, and the market value has shrunk by 54 trillion yuan, and housing assets have shrunk by a staggering 68 trillion yuan. Against the backdrop of a massive decline in existing wealth, opportunities for incremental income are becoming scarcer and scarcer, like an oasis in the desert. Adjustments to industrial policies have intensified pressure and competition in the job market, resulting in an increase in the average weekly working hours of urban workers from less than 46 hours in June 2018 to 49 hours in December 2023. At the same time, however, the growth rate of per capita disposable income in urban areas has fallen by nearly 3 percentage points, which is undoubtedly another blow to the confidence of the residential sector. Nowadays,Almost all macroeconomic problems can be traced back to the lack of expectations and confidence in the household sector.
Whether it is overcapacity, low prices and deflationary risks in the field of industrial consumer goods, or the loose credit blockage caused by insufficient financing demand, and the historically low growth rate of M1, these are inextricably linked to the non-market adjustment costs borne by the household sector and having to face an ever-shrinking market. Therefore,To revitalize China's economy, the first task is to restore the confidence of the household sector, stimulate their vitality, and let the great ship of the economy set sail again.
In this context, the mere pursuit of economic growth figures pales in comparison. We must reiterate that a solid growth rate of 3 per cent, which truly benefits the population, is worth far more than a high growth rate of 5 per cent, which is disconnected from the well-being of the population. From this perspective, it is particularly important to stabilize the real estate market. However,Stability does not mean forcibly suppressing the market through administrative measures such as purchase and sale restrictions, nor is it artificially inflating real estate investment through non-market-oriented, large-scale affordable housing construction. The bubble in the real estate market is not completely formed spontaneously by the market, and the excessive involvement of land finance, infrastructure investment and credit has invisibly provided a hotbed for the expansion of the bubble. Therefore, we should respect the laws of the market, let the market play a decisive role in the allocation of resources, and at the same time supplement prudent macroeconomic regulation and control to ensure the healthy development of the real estate market. Article**: Fortune Fortune