Behind The August Economic Rebound: Traditional Industries Face Two Risks Of De Stocking

Although August Macroeconomic data To be good, but relative to the inflation prevention problem that the market is generally worried at the beginning of the year, how to prevent the economic downturn may become a new challenge that needs attention in the next stage.

Look warm in August economic data You may need to see the clouds and see the sun.

In September 11th, the macroeconomic statistics released by the National Bureau of statistics in August showed that several important economic indicators are on the rise. Among them, industrial added value and total retail sales of consumer goods rebounded significantly compared with July, while fixed asset investment rebounded.

However, there are differences, but the mainstream view is still cautious about the prospects for economic growth. Compared with the inflation prevention problem which was widely feared earlier this year, how to prevent the economic downturn may become a new challenge that needs attention in the next stage.

" Small rebound "

"It was thought that 2008 and 2009 were the most dismal, but now it is inevitable that the sales volume of motorcycle industry across the country will continue to shrink." In September 17th, Mr. Wang, who was engaged in the manufacturing of electromechanical products such as motorcycles and automobile spare parts in Foshan, Guangdong, told the financial weekly. When he received a reporter's call, he just returned from a gathering of the industry association, and the industry exchange also made him immersed in anxiety.

The general walking motorcycle produced by Mr. Wang's company belongs to the "popular good" public goods. The large number of consumer groups is facing the middle and low end market, but its products are not necessities of life. At present, the business strategy of domestic motorcycles is mostly small profits but quick turnover.

"Our products are always sensitive to the prosperity of the market. When the purchasing power is not strong, sales volume will show a fast and obvious response. The overall feeling now is whether business is more difficult than in 2008, whether exported or domestic. Mr. Wang said. At present, Mr Wang's orders for export and domestic sales are 20% less than that in August and September 2009.

Across the country, such motorcycles can sell more than 13 million in the past year, and so far this year, sales have been hovering at about 8000000 units. He predicted that if the end of the year could rush to 10 million units, that would be a good figure.

"Nerve endings in the micro market are more sensitive, similar to what we have seen in recent research surveys. It will not be easy for 2011, especially in the first two quarters, and the GDP growth rate will probably remain at around 8%. Liu Yuanchun, vice president of School of economics, Renmin University of China, told reporters.

In his view, the optimism shown in the August data is likely to be only a temporary, phased rebound, and the trend of economic growth in the medium and long term has not changed much. Among them, industrial rebate, fixed asset investment and total retail sales of consumer goods showed a small rebound in August, mainly due to cyclical factors and policy stimulus, which is not related to the spontaneous rebound of the real economy.

Societe Generale Bank (601166, stock bar) capital operation center chief economist Lu commissar analysis pointed out that the cyclical factors are mainly indicators in the same period last year, the base is relatively low, August data stabilization and recovery has a higher degree of tail factors. The policy factor is mainly the inspection of 4 trillion related projects started in August.

"To a certain extent, it gave birth to a small wave of new projects in all parts of the country, which was equivalent to the implementation of a wavelet stimulation plan in August. This does not mean that the current economy is driven by demand and has the power to increase investment and output spontaneously. Lu commissar said.

New risks

Liu Yuhui, director of the China economic evaluation center of the Chinese Academy of Social Sciences, told the "financial and Economic Weekly" that the real estate industry, the most important pillar of China's economic growth in 2009, can not be expected to rebound at the end of this year and the first half of next year. As other traditional industries that have been playing a key role in economic growth, it is likely to face two risks of de stocking in the coming months.

JP Morgan's August report also expressed similar views. The report pointed out that the extent and depth of China's industrial enterprises inventory adjustment far exceeded expectations, and may face a long time inventory digestion process.

De stocking was once the theme song of 2009. However, since the second quarter of 2010, with the huge demand brought by the previous 4 trillion stimulus policies consumed a lot of historical inventory, and the economic situation is expected to stabilize, more and more enterprises are beginning to enter the replenishment cycle.

At present, this trend is still being strengthened. Liu Yuanchun said, on the one hand, the background of the supervision of the 4 trillion projects may cause some industries in some areas to launch a small wave of centralized projects; on the other hand, the industrial chain that is being staged across the country has been exacerbating the problem of over investment, resulting in the overcapacity of many industrial sectors.

The overcapacity effect caused by the superposition of all kinds of forces will probably appear in the fourth quarter, which will result in the compression of the profit space of enterprises, which will further reduce the willingness of enterprises and markets to invest spontaneously. "In the short term, the growth rate of industrial added value in the next few months will be 1~2 percentage points lower than that in August." Liu Yuanchun predicts.

The prospect of foreign trade is also uninspiring and facing many uncertainties. Domestic institutional and research figures predict that the growth rate of exports in 2011 will fall to a single digit year by year.

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"The contraction of the US and European markets will become the trend of the times, rather than a crisis," he said. Mr. Wang, the owner of the above mechanical and electrical enterprise, said.

"The strong rebound in exports in the first half of this year was mainly based on a relatively low base last year. It is certain that trade growth in 2011 will be worse than this year. It will not bring any surprises, but will bring a lot of uncertainty to the steady recovery of the economy. " He Zhicheng, a senior economist at Agricultural Bank of China (601288), said that the extent to which it will fall depends on the game between China and the United States. The key point is the issue of RMB exchange rate.

The difficult recovery of the US economy also brings great uncertainty to China's export prospects. Research data from JP Morgan show that the fluctuation of us GDP growth rate will bring about 5% of China's export growth. In the next few months, China's exports will bring 0.8% to 1.1% negative growth in economic growth.

From the perspective of consumption, entering the fourth quarter of this year and after 2011, on the basis of general stability, there will be an obvious negative factor, that is, the low level of housing consumption caused by the real estate market reality, such as the decoration market, furniture market and so on.

"We are now experiencing an endogenous downward trajectory after continuing high growth. 2009 is just an episode to deal with the crisis, and 2011 is the continuation of the 2008 cycle. Liu Yuhui said.

This cycle started in the middle of 2008, but in September 2008, with the collapse of Lehman brothers and the escalation of the global financial crisis, the adjustment of China's economic spontaneity had to be suspended in the context of worsening external environment. The massive fiscal stimulus that followed will bring the economy up quickly in the short term. However, the medium and long term adjustment brought about by the weak market demand and weak consumer demand will not escape.

Liu Yuanchun believes that if the excess capacity can bring more economic growth to the crackdown, there will be at least one year's gap between the old and new industries, and the economic downturn will probably last at least 2 years.

The eastern region economy, which plays an important role in China's economic growth, has reached the threshold of structural adjustment. The policies of energy conservation and emission reduction are expected to play a long-term role in the "12th Five-Year plan" starting next year; and as a new industry in the new round of economic growth in the future, most of the new industries are still small, and some areas do not even have industrialization.

Greater uncertainty

While the economic growth is slowing down, the price level is expected to increase moderately. Most economists and analysts believe that the price level at the end of 2010 and 2011 will remain a moderate inflation but controllable situation.

Since 2010, grain prices have risen and staff wages have been raised overall. The very loose credit policy in 2009 has become an important factor in pushing up the price level and will continue to play a role in 2011. However, when the total supply is greater than the total demand and there are overcapacity in many important industrial sectors, the possibility of a sharp rise in prices is still small.

At present, the relatively radical forecast in the industry will raise CPI to 3% or 3.5% in 2011, and most of the forecasts remain below 5% of the inflation warning line.

Greater uncertainty is concerned about real estate in addition to the international environment.

RMB appreciation may become an important boost to stimulate housing prices in the future. Li Xunlei, chief economist of Guotai Junan, said that from the M2 data in August, when the credit policy did not relax significantly and the scale of credit did not change significantly, the increase of M2 implied the variable that international hot money was re - killing the Chinese market. This led to the difficulty of controlling housing prices at a stable level at the end of this year and the first half of next year, and will rise again.

He Zhicheng analysis said that if housing prices are rising or even rising again, the government may introduce more real estate regulation policies. This will also create a dilemma for monetary policy. "If we have to take interest rate measures to control housing prices, then the production and profit margins of industrial enterprises will be further suppressed."

He pointed out that under the situation of economic growth still not getting rid of fatigue, the room for raising interest rates is very small. In the short term, the macro-economy needs to balance the capital market and maintain a stable economic rope. If it is not properly handled, it will probably bring the economy to a short-term "stagflation" situation.

Liu Yuhui believes that the main countries are still using a large number of ways to release liquidity to stimulate economic growth, which is likely to lead to a depreciation of the currency and a sharp rise in international commodity prices in the following year, thereby stimulating the fed to raise interest rates.

"If China does not pay enough attention to this risk, the hot money accumulated in the Chinese market will likely return to the US after the interest rate hike is raised, which will make China's capital market bubble face the risk of a hard landing." Liu Yuhui said, "once this happens, we will not rule out the possibility that the economy will shift from short-term stagflation to deflation."