张明：或者调整，或者继续下行

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张明（中国社科院金融所副所长、国家金融与发展实验室副主任，中国首席经济学家论坛理事）

  注：本文发表于China Daily，2021年11月2日，转载请务必注明出处。
  Tweak or bleak
  China's economic growth could lose steam faster than expected unless the government adjusts its macroeconomic policy and maintains a relatively loose environment.
  China's GDP expanded by 18.3 percent and 7.9 percent in the first and second quarters of this year. It fell to 4.9 percent in the third quarter and is expected to dip further in the fourth quarter. Although the growth rate this year is expected to be the highest since 2011, we should not be too optimistic.
  Compared with 2019, the average GDP growth rate for 2020 and 2021 stands at 5.1 percent, lower than the expected rate of about 6 percent. Statistics show the country's macro-economy faces significant downward pressure in the short run.
  Among the three forces driving the economy, net exports have registered the strongest performance since the outbreak of the novel coronavirus, followed by investment, and lastly consumption.
  The reason consumption is registering such a slow recovery is that the pandemic has hit the service industry particularly hard－and therefore its employees hard, most of whom belong to middle and low-income groups. Until these families' incomes rebound to the pre-pandemic levels, the recovery of consumption will remain sluggish. The year-on-year growth rate of social retail sales of consumer goods dropped from 8.5 percent in July to 2.5 percent in August, a worrying sign.
  The slower consumption growth is associated with the resurgence of the pandemic in the summer. The figure rebounded to 4.4 percent in September, still at a low level.
  Since the outbreak of the COVID-19 pandemic, the investment in real estate has performed better than that in infrastructure, while the investment in the manufacturing sector is even worse than that in infrastructure, because of the weak total demand both domestically and internationally. The purchasing managers index for the manufacturing sector has been on the decline for six months in a row, and fell below the 50 threshold in September, representing contraction. The recent power shortages across the country, too, have hit industrial production, the manufacturing sector and exports.
  Since the second half of 2020, a series of measures have been introduced in China's real estate sector, such as the three balance sheet red lines that constrain property developers' debt burdens, control the concentration of bank loans, and centralized bidding and auction of urban land.
  With these measures in place, investment in the real estate sector is expected to drop remarkably in the foreseeable future. In the first nine months of 2021, the year-on-year growth rate of infrastructure investment fell sharply to 1.5 percent, significantly lower than investment in real estate and manufacturing. Given the financing difficulties and strengthened monitoring of the debt default risk faced by the local governments, the investment in infrastructure is unlikely to rebound soon.
  China's exports have grown strongly since the second half of 2020 because of a combination of factors. The pandemic has stimulated exports of medical and remote working equipment. As China was the first to largely bring the pandemic under control and resume production, there were few substitutes for Chinese exports. And global demand is recovering from the shock of the pandemic. But it is hard to sustain this momentum, as evidenced by the decline of new orders in recent months.
  Meanwhile, inflation is under control. The growth rate of the country's core consumer price index is still at a relatively low level, which indicates that weak demand remains a major problem. In September, the CPI grew by 0.7 percent year-on-year, and the producer price index by 10.7 percent. A closer look shows that the rapid growth of the PPI was not driven by demand, but by the rising prices of global bulk commodities. The core CPI－which excludes volatile food and energy prices and is deemed as a better gauge of the supply-demand relationship－only went up by 1.2 percent in September. It is estimated that the CPI will grow moderately in the near future while the PPI growth will decline.
  In terms of the labor market, in the first nine months, the registered urban unemployment rate was 4.9 percent. However, the jobless rate for people aged 16 to 24 stood at 14.6 percent. Since 9 million college graduates will enter the job market this year, the country will face huge unemployment pressure. To create enough jobs for the vast new labor force, China is obliged to maintain its economy's growth rate.
  The country's fiscal revenue rose by 18.4 percent year-on-year in the first eight months, while its fiscal expenditure grew by a mere 3.6 percent. From February to September, the growth rate of the M1 money supply decreased for eight months in a row. In July, total social financing grew by 1.08 trillion yuan ($169 billion), the lowest since February 2020. The growth rate of total social financing was－17.1 percent and-16.4 percent in August and September respectively, indicating relatively tight money and credit supply.
  In conclusion, it is possible that China's economic growth will lose steam faster than previously expected at the end of 2021 and the first half of 2022 unless the government adjusts its macroeconomic policy and maintains a relatively loose environment.
  In terms of fiscal policy, the government should raise the proportion of central fiscal deficit in GDP, and expedite the issuing of local debts. Local governments should be urged to reduce taxes and fees for small and medium-sized enterprises and increase fiscal subsidies for low- and middle-income families by offering consumption coupons.
  Amid the growing concern over a massive default of real estate developers following the default of Evergrande, the central bank should further lower the reserve requirement ration and inject liquidity into the market. It should also cut the medium-term lending facility rate to encourage commercial banks to lower the loan prime rate and loan interest rates for enterprises.
  The author is deputy director of the Institute of Finance and Banking at the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily.
  The views do not necessarily reflect those of China Daily.