China is adjusting its economic layout on a large scale.

I am going to have an exchange with you for some time to come. I may be here to know that since March 2018, there have been six serious phenomena in Chinese social life.

The first phenomenon, a large number of SMEs reflect that enterprises are very difficult to do, and the pressure is great. There are both cost pressures and financial pressures. Some failures and closures occurred in June and July, so the first thing reflected in the real economy, most companies are calling for very difficult to do, and in June and July, they began to close down.

The second phenomenon is that the situation of corporate default is getting worse. The debt can not be repaid at maturity, and the breach of contract is very serious. At the beginning, it was a state-owned enterprise, later went to a private enterprise, and finally to a listed company. Listed companies have a lot of defaults, so it seems that the break of the debt chain has become more and more serious.

The third phenomenon, non-bank financial institutions, especially in the so-called new business formats in these years, has suddenly exploded, and the non-bank financial institutions that have emerged in recent years have caused a lot of problems. It was very serious in July.

The fourth phenomenon, the stock market has an irrational decline. It turned out that we thought that the national economy may affect the stock market decline is 300 points to 2800. As a result, it did not expect that the US stock market fell by 300 points. By 2500, the stock market experienced an irrational decline.

The fifth phenomenon, investors are more panic. Because no security assets can be found, everyone does not know what assets are the safest and cannot find security assets. Investors are very scared because the assets are not safest and don’t know. Because security assets are like a social motivation scale, once they are not, they are completely out of tune, and the pressure is very high.

The sixth phenomenon, people are very confused, and are not expected to be optimistic. I don’t know where China is going, it is very confused, and the phenomenon of confusion is even worse after October.

As a result, these six kinds of socio-economic phenomena have emerged since March, and overall they are not too optimistic about the future.

Then there is a question. Why do these six phenomena appear now? Why do people feel that the future expectations are not very good?

The analysis found that.

There is no problem with China’s fundamentals, and there is nothing wrong with the fundamentals of the entire social economy. The desire of the Chinese to become rich is still very strong, the momentum is still there, and the impulse is still very strong. In particular it more to the grassroots level, the more intense this momentum. The driving force for China’s economic growth still exists. People’s pursuit of interests and the longing for a better life are still very strong.

Second, there is no problem in the market. China is still one of the largest single markets in the world , with a population of nearly 1.4 billion. The proportion of the middle class is still rising, and there is no situation of consumption degradation. There is no evidence for the view that consumption is degraded. It is simply because the sale of mustard is sold more, and the instant noodles are sold more before consumption is downgraded. Without evidence, China is still a very large country.

Third, China is still the country with the most complete industrial categories announced by the United Nations. According to the industrial categories announced by the United Nations, China is the most complete country. There is no such thing as the rise in labor costs and the fact that some manufacturing industries have left China. The most typical Dongguan is one of the important manufacturers of Chinese furniture. We found that there is still a problem. If we do not go, they absorb the pressure brought by the rising labor force through self-adjustment, so the industrial category is still very complete, and this has not changed.

Fourth, China’s transportation facilities are still one of the most convenient and convenient countries in the world, and will be better and better . This will greatly benefit the product’s breakthrough in transportation pressure. Transportation facilities are still the most convenient and convenient country.

Fifth, the highest decision-making level has not changed the intention of reform and development trends. Although there are various sayings in the society, what private economy is leaving the market, etc., the highest decision-making level does not have any intention to change China’s reform and opening up trend. intention.

If this is analyzed, there is nothing wrong with the most fundamental aspects. Since there are no problems with the fundamentals, why do these six phenomena occur? Later, the results analysis found that the main thing was that five things collided. These five things, everything has negative things. A single occurrence does not affect too much, but the effect of the five things colliding together, the negative effects are superimposed. The negative things brought about by each of these five things are superimposed. This is a little more troublesome, so there is a phenomenon of superposition of negative effects, which leads to the emergence of these six phenomena.

Which five things:

The first thing, we are preventing financial risks.

Preventing financial risks has introduced many policies, such as de-leveraging, such as controlling real estate, such as managing financial chaos, etc. These practices have a double-edged sword. While achieving financial risks, it has brought about negative things. The pressure on the corporate capital chain is relatively large and even broken. In particular, companies with high debt and high growth in the past are basically unable to survive. And they have a variety of connections with normal companies, and companies that cause normal debts are not working. You know that China is a country that has long been operating on high debt. The proportion of direct financing is very small. It basically depends on the operation of debts. It has been so over for decades.

Suddenly, it is necessary to de-leverage, to shrink the debt, the enterprise can not stand it, leading to the break of the capital chain of some high-debt enterprises, and they have various links with other normal debt-producing enterprises, leading to problems in normal enterprises.

The so-called prevention of financial risks is correct, nothing wrong. The problem is that the negative things it brings are also manifested. From the perspective of economics, any countermeasure is a double-edged sword. Therefore, an important pressure to prevent financial risks is that the financial situation of enterprises is relatively serious. Debt defaults, capital chain breaks, and the rude practices of some people in the operation, blindly reluctant to lend, make the situation even more serious. The first thing, preventing financial risks leads to some negative things, and the pressure on enterprises is very high.

The second thing, we are doing supply-side structural reforms.

The supply-side structural reform is actually a structural adjustment, and the economics community divides people’s lives into the demand side and the supply side. Demand side, investment demand, consumer demand, exports, etc., this is the demand side. The supply side refers to the production side, and the supply side structure refers to the industrial structure. Therefore, the industrial structure is being adjusted because some industries that originally supported us cannot continue to support China’s economic growth. Like the traditional manufacturing, construction, and real estate industries, it is difficult to continue to grow because they have problems. The so-called traditional manufacturing industry has a serious overcapacity, and we propose to de-capacity. The real estate bubble is forming. We have to suppress asset bubbles, which indicates that these industries are difficult to continue to support China’s development. China needs new industries that support growth.

These industries have been judged through analysis, know which industries will support us, and propose that the three major industries will support China in the future. First, strategic emerging industries, such as new energy, new materials, bioengineering, information technology and mobile Internet, energy saving and environmental protection. , new energy vehicles, artificial intelligence, high-end equipment manufacturing, etc., we are also known as strategic emerging industries, it will support our growth. Second, the service industry will become an important industry supporting China’s development. Consumer services, business services, production services, spiritual services, etc., will support China’s growth. Third, modern manufacturing, such as aerospace manufacturing, high-speed rail equipment manufacturing, UHV transmission equipment manufacturing, modern traditional manufacturing, etc., will support China’s growth.

Recognizing that these three industries will support China’s growth, it is pushing for structural adjustment. However, the process of adjustment needs to be carried out. At present, it is in the midst of adjusting a gap period. The contribution of the original traditional industries has dropped rapidly, and the new industry has not risen up, or is getting up. It is not so powerful, and there is a gap in structural adjustment. The negative thing brought about by this gap period is that the pressure for growth to fall is very high, the growth is unsettled, and the income has been going down. Therefore, the adjustment of the structure of this gap period brings a lot of pressure, that is, the pressure of the decline of growth is very large, leading to the uncertainty of the expectations of future judgments. This is the negative thing brought about by the second thing. The structural adjustment gap period has led to a relatively large downward pressure on growth.

The third thing is that China is transforming old and new kinetic energy.

The original support for China’s growth was mainly a cost advantage, and the cost advantage has suddenly disappeared. In principle, the disappearance of cost advantages should be supplemented by technological advantages. After the cost advantage disappears, it should be that technological advantages will soon grow and ensure China’s growth. But now the problem is that the formation of technological advantages requires a process, and there is a gap between the old and new kinetic energy conversion. The original advantages are lost, and the new technological advantages have not yet come out, resulting in a relatively large downward pressure on growth. There is also a gap period in the process of converting old and new kinetic energy. The negative thing is that the pressure of growth decline is relatively large, and people’s expectations do not seem to be very good.

The fourth thing is that China is engaged in ecological civilization reform.

You know the biggest difference between the 19th National Congress and the past, and mention the “five major reforms”, economic, political, cultural, social, and ecological. The reform of ecological civilization has become one of the “five major tasks” of reform. We are promoting the reform of ecological civilization. Ecological civilization is nothing more than two things. One thing is to solve the treatment of waste water, waste gas and solid waste in the process of industrialization and urbanization. This requires raising the company’s emission standards, because as long as this requires the company to raise emission standards, the standards for wastewater, waste gas and garbage should be raised. Another thing, the restoration of the ecological environment, because this is an important part of the so-called ecological civilization, the restoration of the ecological environment.

The ecological confounding repair also puts high demands on enterprises. For example, within the Yangtze River Economic Belt, factories within 3 km are not allowed to build factories. What have been done in the past? We have built many factories beside the Great Lakes and Dashan Dashui. It must be removed now. The reform of ecological civilization has led to one thing. Enterprises are under great pressure due to ecological problems. Coupled with the rudeness in our law enforcement process, many enterprises have closed down their production, and the growth rate will inevitably fall back. The pressure is very high. The reform of ecological civilization has led to a very troublesome thing. Whether the enterprise is emitting standards or relocating, it will affect the current economic growth, and the pressure of growth will fall back.