In Chinese thinking, 8 is a lucky number. However, in economic circles, it functions like a spell. In the past 20 years, every 8 there will be a great depression. 1988, 1998, 2008, has been the case.
More surprising is that the logic of the great depression and the result is three times is so consistent: rapid economic growth, and inflation, Perak administrative control means taken by the Government, led to rapid economic cold.
1998 "prices pass through" so far is one of the history of China's economic "pain points" in the previous three years, with the development of light industry to speed up, numbers soar, material supply tension of unprecedented fierce Central remonstrations, but still cannot stop the growing number of government agencies and State institutions to join to the reselling of materials. In order to promote the market allocation of price, Central decided to implement price reform, because the lack of preparation, a direct result of an unprecedented inflation, the Yearbook of the prices recorded in China, "in 1988 was since 1950 prices in China rose sharpest, inflation significantly exacerbated a year. At the national calculation of the retail price index in 383 items, fixed price above 95%, total annual retail prices index increased by 18?5% than last year, the prices rise again in three years on the basis of 23?7% per cent. "" Prices pass through the "only half a year on was emergency halt, to 1989 early, many construction project horse, about has 5 million farmers building workers returned home, and at this time in village, rectifying also makes large township enterprises collapse depression, social contradictions quickly intensified, to 1989 second half, national self-employed registered number reduced 3 million households, private enterprise from 200,000 home Xia fell to 9? 60,000 home, State-owned enterprises is due to production and marketing atrophy and was chain debts of plagued. This round of austerity will not be relieved until 1991.
Macro tightening of 1998 and this year, a certain degree of similarity. In past of four years in, China economic way triumphant advance, special in appliances, and food, area in the, local enterprise made has major success, domestic market unprecedented prosperity, and to 1997, United States Wall Street of hedge fund suddenly sniper Asia currency, raised Asia financial storm-the-the is in that crisis in the, told the under declared world entered financial capitalism of era, to defending RMB does not devaluation, Zhu Rongji Government bear has unprecedented of risk and pressure, implementation has severely of financial control and crunch policy. At the same time, under the influence of financial crisis, situation good export growth declined, domestic commodity stocks surge, weak consumer demand serious, in June, also suffered a flood in a century in the Yangtze basin, 29 provinces affected, killed 4,150 people. Beset, suddenly turn from overheating domestic economy cooled, national household savings reached a historical record, be regarded as "tiger in the cage".
2008 of scene had exactly: in past of three years in, inside and outside furniture Mong Kok high speed growth, to control economic overheating and inflation, Central Government suddenly brake, implementation credit crunch policy, a heap bonfire was Pocket head poured fight, and was sacrifice of still is surface large wide of private capital enterprise, only first half of on has 6? 70,000 home Enterprise collapse, but, international market mutation, United States of subprime crisis directly led has Europe market of depression and consumption confidence collapse, China economic in just number months between, by overheating directly fall ice stimulated Brillouin, in past number years in the, pull introduction economic growth of three large engine-the-the real estate consumption, and export-oriented of "China manufacturing" and fixed assets investment-the-the has two a thoroughly flameout, so, depression suddenly comes.
Now that the cause of the depression, the logic is the same, then we'll come, measures how many out of depression.
1988 of that depression continued has three years of time, in 1990 before and after had very of difficult, Zhu Rongji Yu 1991 fujing competent economic Hou, implementation has many major of policy adjustment means, which including severely of financial order rectifying, and tax reform, and State-owned enterprise mass listed, and RMB and dollars exchange rate adjustment and so on, meanwhile, for many of Foundation facilities investment and development zone construction, Deng Xiaoping more is in 1992 to "South patrol speech" of way calls people for reform and expanded consumption of confidence. In that round adjustment, centralised has been an unprecedented increase and ultimately economic recovery due to domestic household consumption, particularly home appliances market activation.
1998 saving strategy is both inside and outside, in the area of foreign trade, actively encouraging exports, using Asian neighboring countries, in particular the "four little dragons" tumbling by the financial turmoil of the opportunity, and formed a "made in China" the cost advantages. In terms of domestic demand, the Central Government was forced to open up the real estate market, to activate the consumer market, after two years, China's economic recovery. In this round of adjustment, centralization continued to be strengthened, through the "retreating" strategy, the Government put 100,000 of thousands of small and medium-sized state-owned enterprises dumped the markets, and in the financial, energy and resources firmly in the area formed a monopoly advantage.
It is clear that today's Chinese economy still walking in the controlling logic. Seen from the current scene, the basic three conclusions can be drawn:
First, to revive the economy, still three engines available to start. Recovery in foreign trade under the influence of the international environment is very large, so innovation of manufacturing for the domestic market has become very important. Secondly, massive amounts of fixed asset investment is still the most direct way to start, to $ 2 trillion in railway investment plan in the near future, and trillions of Guangdong and Zhejiang provinces have also launched the revitalization programme, are a way of rendering. Again, wake up people's consumption, it seems that in addition to activating the real estate developers, there is no other policy.
Second, control will be further strengthened, in the global economic crunch, rise of state capitalism, China's macro-control is bound to strengthen, in other words, the best market-oriented reform of time have missed, it is impossible to expect in the future a reform of the economic cycle to achieve a new breakthrough.
Third, the Central and local conflicts of interest become very sensitive. Under the current tax system, takes on 60% of local government expenditures, but only to about 30% of the income, if the estate cannot recover in the short term, local finance will face unprecedented difficulties, this month, experts have suggested the Central Government allowed the issuance of bonds. Dark struggle of the Central and local tax will be very interesting.
Ten-year round of depression, make us truly observed a certain fatalism and laws of the Chinese economic reform. We are still in a full sense of the unknown "history of the three Gorges" pushed forward.
Note: this article only represents the author view.
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