Many people use the economic cycle to describe the macroeconomic situation we have faced in recent years, but if you think about it, such a term does not seem to be enough to fully describe the severity and complexity we are currently facing.
And from 2020, or earlier, it depends on how you define it, and from what perspective you look at this round of economic cycle, if it is foreign trade, then it may be retrospective, if it is from the perspective of macro growth, 2020 can be described as a watershed.
Although the world was facing a stagnation or slowdown in economic growth at that particular time window, the recovery of the post-coronavirus world seems to be slowing even more slowly.
There is no need to go into too much detail about the strength of the U.S. economic recovery, even the Japanese economy, which has "lost three decades", has recently reached a new level of ** and corporate profit margins.
Then, we need to find an explanation, which is human nature, good and willing to explain all kinds of phenomena that are not reasonable or do not meet our expectations.
So, how do we explain this economic cyclical phenomenon?
First of all, a more pessimistic conclusion: this is not as simple as falling into the economic cycle.
There is a basis for this.
Generally, a small economic cycle is only three or four years, and the characteristics of this economic cycle are very prominent, such as the subprime mortgage crisis in the United States, which is essentially a loan issuance approval that is too large, resulting in the occurrence of bad debts.
In the face of this economic cycle, the problems we face and the problems that need to be solved are actually very prominent and obvious, but the problems we are facing, frankly speaking, are very many.
At the beginning of the first quarter of 2021, it is the peak of corporate profitability, and then it is to go down quarter by quarter.
The solution and time to solve a single problem and many problems are certainly different, and the problems facing our macroeconomy today are not only complex and risky, but also very diverse, which has led to many of our stimulus measures, which are difficult to concentrate on breakthroughs and are trapped in too many problems.
What are the risks to macroeconomic pressure?
The first is real estate, seventy percent of China's household asset structure is houses, which is the data of 2019; As soon as housing prices are a**, residents' wealth has shrunk, and natural consumption is less than expected.
When the housing prices in almost all cities are in the first place, the wealth is evaporating invisibly, which in turn exacerbates the demand for conservative savings of residents, so we see that in the past four years, China's residents' savings have increased by 58 trillion, which is almost the sum of the savings in the past ten years.
Up to now, the total savings of Chinese residents have reached more than 130 trillion yuan, which is almost the total GDP of China in a year, and 58 trillion of them have been saved in the past four years.
This is a very scary number.
If it is just a simple small economic cycle, we cannot explain why the total amount of household savings has increased so much in the past four years, and the increase in household deposits and savings is a good reflection of the arrival of a long cycle.
We can't give a concrete answer to how long this cycle will be, and no one can predict that the Japanese economy will fall into a period of stagnation for 30 years, just as Japan did back then.
The increase in conservative savings due to real estate, as well as the weak recovery in consumption, are the first big problems that we need to address.
On the whole, real estate and consumption are cause and effect of each other, but whether the simple stimulation of the real estate market can be exchanged for the growth of consumption is still unknown, but the past year's measures to boost the property market, we have also seen that the recovery of the real estate industry is still difficult.
Bubbles, shrinking assets, shrinking wealth, and downgrading consumption are interlocking with each other, and a spiral has to be worrisome.
Second, the superposition of historical problems and black swan events has led to a sharp increase in confidence.
Real estate is a historical legacy, which also includes local debt problems in various places, as well as weak investment returns, etc., which are historical problems, which are the debts caused by high leverage in the past.
These problems are not a problem at most times, at most a gray rhinoceros, but the worst thing is that we have encountered a new crown virus that is rare in human history in a century, such a black swan event lasted for three years, and to this day, we obviously cannot underestimate the heavy impact of this black swan time on the confidence of the entire macroeconomy, especially the private economy.
Compared with other economies, we have not taken large-scale cash stimulus in the past three years, or throwing money around, which has led to a certain extent that we have not recovered as much in the post-COVID era, whether in terms of consumption or otherwise, as well as several other major economies.
As a result, it should be expected that the income of Chinese residents is still polarized on the whole, and a large number of low-income groups have no safeguards and lack of public system support, and in three years, the income of many low-income groups has decreased, which has further affected the recovery of spending in the post-COVID era.
In other words, when the new crown passes, instead of being optimistic about the future and spending with revenge, many people have learned to learn their lessons, or to save heavily and reduce expenses.
After all, when your income starts to decrease, the mortgage and children's education expenses you have to pay will not decrease because your income decreases, these hard expenses are the costs you must pay, so it is difficult to completely recover the weakened confidence, even in the past year.
Confidence in spending, like PTSD, is not visible on a day-to-day basis, but whenever you want to spend or make a large expense, you may have a three-year scenario in your mind.
In addition, we don't have many cards in our hands, at least not as many as in 2008.
Why?
The 4 trillion stimulus plan in 2008 was driven by infrastructure, which can be said to have helped us through the global financial turmoil caused by the subprime mortgage crisis in the United States, but in today's context, we found that not only is there not much infrastructure that can be pulled, but the high local debt also makes this stimulus model risky.
In the past three years, the epidemic prevention expenditure has put great pressure on the local government, and the downturn in the real estate market has also led to a sharp reduction in the income from land transfer fees that the local government relied on in the past.
That's why we're still using more conservative stimulus measures.
Of course, if you look inward, the short- and medium-term problem is the weak consumption caused by local debt, infrastructure saturation, and real estate downturn.
Together, it has brought out a new business pattern such as the severe employment situation and involution.
Involution, a word that no one would have paid attention to ten years ago, but today, almost everyone, from college students to veteran birds in the workplace, uses this word to describe the pressure or state they are currently facing.
Does the normalization of involution also mean that an era has passed?
The macro economy is expressed by data, but at the micro level, from the feelings of individuals to the feelings of a group, they all show that the economy has undergone a qualitative change at this time.
Third, the population structure is the most important factor affecting China's economy in the long run.
If the above two points are short- and medium-term factors, then population is definitely a long-term factor, looking at 10 years, 20 years, 50 years or even 100 years, the structural changes in the population will inevitably cause very great pressure on China's macroeconomy.
The pressure is not only to generate revenue, but also to spend.
At present, China's population structure is like a seesaw, but the difference is that the other end of this seesaw is getting heavier and heavier, in the past, office workers and retirees were maintained in a delicate balance, but now with a generation of baby boomers facing retirement in a large area, aging has begun to intensify, and the seesaw at the end of retirement is getting heavier and heavier, which also means that the pressure on office workers at this end will be greater and greater.
Not to mention, the pension alone is a huge pressure, in addition to the medical insurance expenditure and so on, pension is not only the responsibility of individual children and families, in a broader context, it is also the common responsibility of our entire society, which is actually the consensus of developed economies.
The older the population, the more money needs to be spent on the retirement group each year, in other words, the greater the financial pressure.
In addition, because the elderly population does not have jobs, this will not help us improve productivity, and the livelihood of a large number of elderly people in rural areas and low-income groups may also form a major livelihood problem in the future.
Taking migrant workers as an example, there are tens of millions of post-70s migrant workers in China, and after they retire in the future, because many of them are only children, with today's per capita GDP, pension is not only a pressure, but also a heavy burden.
Unable to generate income and increasing expenses, it is difficult for young people to not only support their parents, but also face the burden of an aging society as a whole, and how to grow the economy at this time.
These are just some of the economic issues we are facing internally, but if we take a broader view, we will also see complex changes in the external situation.
During her visit to China last year, Yellen said: "1980-2010 was the honeymoon period between China and the United States, and during these 30 years, China's economy grew at an average annual rate of 10%. ”
Of course, this sentence is Yellen's own exaggeration of the United States, but it also confirms from the side that we may never return to the era of double-digit growth, in other words, this is no longer a problem of the economic cycle, just as the United States cannot grow GDP more than 10% per year, this is the past of an era, not an economic cycle.
The times roll forward, and the will of the individual cannot influence the times, but is often influenced by the times.
I still remember ten years ago, we were so high-spirited, a thriving scene of prosperity on social platforms, people were witnessing and looking forward to the next decade will be better, an upward economic cycle, not only deeply bound to the economy, but also deeply bound to the fate of individuals.
Nowadays, just as we can no longer return to an average annual growth rate of 10%, many things seem to be irreversible, and it may be difficult for parents to invest heavily in education as they were ten years ago, full of hope and optimism for their children, hoping that he can get ahead.
Because even the parents themselves are beginning to understand that it is becoming more and more difficult to get ahead.
But on the other hand, we should all be soberly aware that no economy in history can maintain an average annual growth rate of 10% forever, just as the population will always age, the industry will always be saturated, and the development of technology will always encounter bottlenecks, and it will always shift with the labor costs of different economies.
This is a basic economic law that we can hardly violate.
Knowing this, in addition to being relieved, the only thing we can do is to make more money when we can still make money, and we are not afraid of hardship when we are young.
Similarly, for an economy, if you don't take advantage of the time when the economy can still grow, fight for the economy, is it difficult to wait for the aging population to intensify and the labor cost is high before fighting the economy?
The growth of an economy is, in a sense, no different from the income growth pursued by a person, and under the market economy, each of us pursues income growth as the goal, so the GDP of an economy will grow.
An era has passed, we bury our heads in regret, raise our heads, and we will continue in the end.
end.Author: Luo sir, the workplace reference of the new youth. Concerned about the logic behind the development of things, optimistic pessimists. Follow me and grind the knowledge to you.
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