China's economy to external shocks out of the shadows

 China's economy to external shocks out of the shadows?
(Speaking at a seminar on the record)
start labor costs, began to talk about economic growth and employment. For employment, I think the Chinese growth and high and is certainly consistent with high employment. Now to adjust the economic growth, employment would direction to what? adjustment in terms of economic growth, high labor costs are actually doing. From the perspective of economic growth, is certainly the hope of the central two, one is propelled from the export growth, domestic demand and promote the transformation into the second, to promote the transformation from the grounds of simple low-cost innovation-driven economic growth. change the mode of economic growth and employment can continue to grow, the key if the two parameters. The first argument, our current practice, including the new Labor Contract Law aims to narrow the income gap, but the extent to which effective? This is the first we need to know. Second, the income gap of overall economic growth will bring about what kind of effect? The second thing is basically put it clearly, we have studied the reduction of urban-rural income gap a driving force of economic growth, on average, reduce the urban-rural income gap ratio of 1, economic growth rate can be increased by 3 percentage points more, this can be known. But now the policy of how much the income gap can play a role is still unclear. If domestic demand growth on economic growth is a positive role in promoting the long term, short-term it, Since labor costs, labor demand is declining. If so, the negative effect of short-term and long-term effects of which are big? This is an empirical question, and now need to study.
accumulate short-term negative effects can accumulate long-term negative effects. Recently, a number of related issues to confuse public opinion there. For example, the implementation of the new labor contract law in China is too short, only half a year, so looking for international experience, the results found in India. Some economists do a labor law in India after the implementation, because 50,60 from the 20th century in India's implementation of labor laws, the implementation of India's efforts in various states is not the same, can be implemented relatively strong intensity of weak states and state efforts to do comparison then look to economic growth, investment and employment. Many people refer to this study, this study found that the implementation of the labor contract law relatively strong state, economic growth, investment and employment are negative, people take this case against China's Labor Contract Law implemented. I think there is some talk about a problem clearly, we must emphasize the background of each country and the implementation of labor law is not the same intensity. I see some Indian material, and their labor law enforcement more intensity than us. Recently I read a book about India, a company fired an alcoholic, drunk sued. in accordance with the laws of India, you can not dismiss, this alcoholic prosecution lawsuit, companies took 15 years to win the lawsuit, the cases occurred in China before? not.
I would like to talk about the macroeconomic point of view, but also points short and long term. I want to talk about both short-term view. First, I do not agree with this round of economic cycle is mainly monetary phenomenon point of view. If you use conventional monetary equation, inflation must be the currency of any phenomenon, this sentence is certainly right. but the same currency, the extent to which higher prices translate into? This is a structural problem. In China there are several structural issues to be discussed, one is the structural problems, China's CPI up inside, mainly by food prices, the matter must first be laid down, which is an increase volume of currency issue is not between large amount of China's currency rise, inevitably leading to asset price inflation and asset prices are not included in the CPI statistics. The second is an international structure, China today about inflation and the depreciation of the dollar. U.S. dollar and What about? and the sub-prime crisis-related, and the economic recession in the United States. America's subprime mortgage crisis, how is that? This would be referred to the global economic balance problem. U.S. situation today is a global re-structural adjustment results. China from the mid-90's massive trade surplus, accumulated large foreign exchange reserves, foreign exchange reserves to find a way out, at the international level, that is, a large amount of foreign exchange reserves to the United States to buy U.S. Treasury bonds, which were intangible the U.S. money supply increased . Americans to save money is very little, but mass consumption, the subprime market actually is to meet the growing consumption of U.S. residents, so prices rose. Finally, do not go on supporting the United States to raise interest rates, subprime crisis the. the sub-prime crisis, the root causes of imbalances and international trade is the long-term. Today's structural adjustment, there is a balanced adjustment of the global economy in which the flavor, so look, I think it is a simple monetary aggregates problem, but international and domestic structural adjustment, and how to re-direction of balance.
second question, today's short-term problems, mainly reflected in increased production costs, production costs, there are many reasons, today We need to seriously consider these increased costs of production, which is the main reason? I recently read something, I want to give a few basic facts. The first, how much labor costs? It is widely cited data from the annually, beginning in 2004 about 20%. Second, transportation costs, since the oil boom years, container from Shanghai to Rotterdam tripled the cost of transportation today. Broadly speaking up because the cost of the collapse of leading companies, has no meaning . in the end is what causes business failures? If this issue is not clear, it will cause errors in the policy. recent research in Jiangsu and Zhejiang, when I asked about, the answer is the impact of different enterprises by the main factor is not the same. There are some export-oriented, exchange rate of the most severely affected. some labor-intensive, such as the production of clothing, and labor costs of even more serious. This may explain why the impact than the length of the Pearl River Delta triangle large, this is because the Pearl River Delta's labor-intensive export-oriented enterprises more. There is also a worth speaking out, that is, land, land prices in China, partly due to increased levels of economic development, into the land, but on the other hand because the man-made, because so far China has strict restrictions on inter-provincial indicators of non-agricultural land transactions, limiting the supply of land in eastern, land prices caused by such factors can be through regional land configuration can be alleviated. There is another interest rate policy, the cost of funds raised. we mentioned earlier, inflation in China today, if overcome by the interest rate is the wrong way round. A fundamental problem we talked about earlier, when interest rates , unlike the standard textbook that talked about all the companies are also shrinking investment? not. China, after the credit crunch and hurt the small and medium enterprises, state enterprises, the impact is much less affected by competition authorities. more to raise interest rates,UGG boots cheap, economic growth,UGG boots, combat greater. Another problem, the more interest rate rises, the greater the pressure of RMB appreciation. hot money coming through Hong Kong to look at two things, one of China's relatively high interest rates, coupled with the RMB exchange rate may be even further appreciation, and These two incidents are linked to another.
look at long-term and long-term economic growth stresses in the end depend on labor productivity. particularly when the labor force today is basically near the end of dividend and capital growth is also facing declining domestic savings rates challenges. foreign capital into China has in the world and in the forefront, and then the next economic growth can only be sustained by increased labor productivity. China from the past to the future, changes in labor productivity is essentially three forms, first form, has long relied on two things, one is high investment, a low labor cost. low labor costs to maintain the support of the growth in nominal labor productivity, a rapid growth in output direction, and from 1994 to 2004 the basic wage workers do not rise, the unit labor costs continued to decline, the nominal labor productivity growth. There is another practical labor productivity, real labor productivity is a very important source of high investment, the investment in a large number of equipment upgrades. The second is also a nominal increase in labor productivity The. recent years,Bailey UGG boots, the product caused the rise in prices is still the name of improving labor productivity. The World Bank study found that the rise in prices minus the cost of raw material price increases, the difference between the rise in recent years, China seems more and more by the name of productivity growth to absorb increased costs. Thirdly, I think it is more important, most fundamental is to rely on long-term innovation. Innovation is divided into two types of learning type, there is a species is the original type. What is the current situation in China? learning innovation and progress and labor productivity related to investment, and investment more and more suppressed, on the other hand, their own original innovation can not get on. original innovation and what does not go on? certainly related with the financial system. But there is another very important source of innovation may depend on population, industry concentration, as an innovative source of the city will further grow. To do this, labor the free flow and cross-regional reallocation of land is especially important.'s economy continues to grow in terms of the demand side but also on the control of the income gap, increasing demand for low-income, aggregate demand can increase domestic.
further speaking,UGG bailey button, there is also the problem of the Japanese experience. Many people have problems in China today and Japan in the 1980s to compare, my own view is that, both at least a few different. First, Japan is already the 1980s oriented economy led by domestic demand, and not the same as China today, China is export-oriented economy. Japan since the 1960s, dependence on foreign trade has been only 14% to 25%, China in 2006, more than 65% of data. By 1980, 82 years, the greatest appreciation of the yen when the pressure dependence on foreign trade is only about 25%.
oriented economy led by domestic demand in Japan in the 1950s began to form. to the mid-60s, the proportion of tertiary industry accounted for over 60% of GDP to the highest dependence on foreign trade 80 to 82 years, the proportion of tertiary industry accounted for 58% GDP, 59% or so. The second great difference between Japan's income is not high, the Gini coefficient of 0.3 had a little today. China faces many challenging things for us is precisely the policy operation tool. Japan's large number of export manufacturing and trade surplus, the yen appreciation pressure is high, I just say in a few dimensions, almost no room for adjustment. China today is a serious imbalance in the economic situation, both bad and good thing, good thing is that there is room for further action, that is, to narrow the income gap by improving domestic demand. The Japanese have an experience that gathering, I have done A simple data analysis, the entire population of Tokyo is Japan's population accounts for the higher proportion of the time, that is, the faster economic growth in the mid-time of .1990, before and after ten years, this decade scholars called Japan wants to engage in functionally diversified capital plan, the absolute amount of Japan's population and the proportion of all down, this is not only the economic damage to Tokyo, but also damaged the Japanese economy. Why do I say that Japan's experience can tell us a lot of things? One is the domestic economy the income gap between the formation and control, there is a gathering economy. I think this is the next areas we can do.