Professional Documents
Culture Documents
Policy Interpretation
Liu Lingling
Tsinghua University School of
Economics and Management
I. Judgement on China's present macro
economy
How to judge China’s macro economy situation?
—Type U?Type V?
—Type L?
2015 JUL AUG SEP OCT NOV DEC 2016 FEB MAR APR MAY JUN
JUN JAN 2015 JUL AUG SEP OCT NOV DEC 2016 FEB MAR APR MAY JUN
National CPI rangeability JUN JAN
2015 JUN JUL AUG SEP OCT NOV DEC 2016 FEB MAR APR MAY 2015 JUN JUL AUG SEP OCT NOV DEC 2016 FEB MAR APR MAY
MAY JAN MAY JAN
Private Fixed Asset Investment increased Year-on-year growth rate of value-added of
by 3.9%from January to May in 2016 industrial enterprises above designated size
In the late 1990s, China was hit by Asian financial crisis, leaving a large
number of people unemployed. The world financial crisis in 2008 and 2009
was influenced by short-term demand factor. Though China‘s potential
growth rate is high, its actual growth rate declines, leading to
insufficient utilization of production capacity. Capital under-utilization means
excess capital and underutilization of labor force suggests that many
people lost their jobs.
Economic growth slows down
Period year
GDP potential growth rate
The blue line represents potential growth rate. It is the highest growth rate
when all resources in a country (or a region ) are allocated optimally
and sufficiently. It’s reckoned that working-age population definitely
declined after 2010 and China’s economic potential growth rate during the
12th Five Year Plan was merely 6% or 7%. The potential growth rate
during 13th Five Year Plan will dramatically increase to 6.2%.
2、China has demographic dividend?
China’s total fertility rate is 1.4 (lower than the standard rate of 2.1 )
nationwide city countryside
total fertility rate
China’s total fertility rate is 1.4 (lower than the standard rate of 2.1 ). If
such rate remains, China’s population will face absolute decline one day.
This is quoted from Can China Create Economic Miracle Again ? by Cai
Fang.
http://news.ifeng.com/exclusive/lecture/special/caifang/
Prediction on China’s aging population size
(unit: million persons) In 2015, working age population
aged between 16 and 60 (under 60
years old) was 91,096, accounting
for 66.3% of total population;
Number of people aged above 60
(including 60 years old) was 22,200,
accounting for 16.1% of the total;
Number of people aged above 65
(including 65 years old) was 14,386,
accounting for 10.5% of the total.
The inventory shows a nationwide decreasing trend…… ……House prices in more and more cities tend t
o become stable and rise quarter-on-quarter
Price of newly built commodity housing in 70 large
Destocking cycle (by city hierarchy ) and medium-sized cities in China
Month Month on month, %
40 50
first-tier cities second-tier cities
35 40 first-tier second-tier third-tier 36.1%
third-tier cities nationwide cities cities cities
30 30
25 20
20 10 6.0%
15 0 0.7%
10 -10
5 -20
0 -30
Data source:CEIC, Research department at CICC Data source:CEIC, Research department at CICC
16
China’s housing demand is mainly from people’s need to
improve their housing and housing need of rural residents into cities.
Poor quality of plenty of houses cannot Urban home ownership rate fell between 2000 and 2010
meet people’s basic quality requirement.
Data source:CEIC, Research department at CICC Data source:CEIC, Research department at CICC
14
What contributes to high property price?
Urban residential construction land is in short supply. Governmental taxation and land-transferring fees
account for 60%-70% of the total urban house prices.
17
Cut property inventory and increase housing demand
Three tasks concerning 100 million people in the future: granting urban
residency to around 100 million rural people who have moved to cities ;
rebuilding rundown city areas and villages inside cities where around 100
million people live; guiding the urbanization of around 100 million rural
residents of the central and western regions in cities there .
Develop rental housing businesses. Chinese government supports
developing rental business by utilizing existing housing and newly built
housing. Individuals are encouraged to lease their own residential houses
according to the law. Commercial buildings are permitted to be transformed
into rental residential housing in accordance with regulations.
Boost monetization of public rental houses. Chinese government offers
allowances to tenants through rental housing market.
Improve preferential tax policies, encourage financial institutions to
increase support and increase rental housing land supply.
Strengthen regulation by practicing uniform model housing leasing
contract, supervising intermediary services and stabilizing leasehold
relations to safeguard legitimate rights and interests of tenants.
Smart city—“sponge city”,underground pipeline
Make plans before construction and build underground
infrastructure before constructing buildings on the ground.
——Underground pipeline :Paris:1833;London:1861.
——Enhance construction and transformation of municipal underground
pipe network, construction of sewage and garbage disposal and recycling
facilities, transformation of gas, heating and old pipe network,
construction of subway, light rail and other high-capacity public
transportation system and urban power distribution network construction.
Promote construction of intelligent power grid and ecological
environment and improve the functions of flood storage and drainage and
groundwater replenishment of urban green land.
——“Decrease real estate inventory by accelerating citizenization
of rural migrant workers and promoting reform of housing system that
focuses on the need of new urban residents to increase effective demand
and stabilize property market”.
Stimulate the development of city circle
centering on Lhasa and Kashgar.
"Fund
Town" in
Southern
Yuhuang
Mountain
Wanda Group totally invested 1.4 billion yuan in the poverty alleviation.
Among them, 300 million yuan is used for building Danzhai Vocational
Technical Institute, 600 million yuan for building a tourism town and 500 yuan
for setting up a special fund for the poverty alleviation in Danzhai.
Wanda promoted targeted poverty alleviation in Danzhai in fields of industry,
education and fund simultaneously and combined short, medium and long-term
considerations. By doing this, it created a new mode of targeted poverty
alleviation in China.
It's expected all impoverished people in Danzhai county will get rid of
poverty within two years. The operation of all projects in 2017 will bring great
change to the overall economy in Danzhai county and achieve sustainable
development there. It's believed that Wanda can help lift people in Danzhai out
of poverty for good.
Danzhai boasts convenient
transportation. The establishment of
Xiamen-Chengdu freeway shortened
distance between Danzhai county and
important economic cities, including
Guiyang, Guilin and Guangzhou. This lays
a solid foundation for Danzhai to integrate
into Pan-Pearl River Delta economic circle.
potato
powder
potato bread
technology of processing
potato noodles
steamed potato bun
Agriculture "going out"
Brazil's agricultural land is up to about 264.5 million hectares, 61 million of
which is arable land. Brazilian land price is cheaper than that of China (750
yuan per mu in China while dozens of yuan in Brazil). China imports 60 to 70
million tons of soybean every year. Soybeans of the US, Brazil and Argentina
are mainly exported to China. Brazil's 74.3 million hectares of dry land can
produce 150 million tons of soybeans.
Russia possesses 220 million hectares of agricultural land and 134 million
hectares of arable land, accounting for 8% of total arable land in the world.
Russian per capita farm land is 0.84 hectare, 10.9 times as large as that of
China. Russia’s increasing population leads to labor shortage. Russian land in
Far East is vacant and free from contamination.
We can cooperate with Cambodia, Laos, Vietnam and other countries.
Cambodian land along both sides of Mekong is very fertile. Planting
sugarcane there doesn't need chemical fertilizer and the output is higher than
China's. Rare natural disasters there represents favorable plant conditions.
Ethiopia, Nigeria and other African countries boast cheap land and good
conditions for planting grain.
Raising fish in paddy field, a kind of traditional Chinese agricultural technology is
introduced into Nigeria and spread to Sierra Leone and Mali. The application of
this technology reduces the utilization of pesticides and significantly increases grain
output, contributing to agricultural and environmental sustainable development.
Being a peasant in America: the first
Chinese farm
Harvesting oat
5.Service industry develops rapidly
—— By 2020:
Set up a catalogue of national basic public services.
Average number of years of schooling received by the
working-age population increases from 10. 23 to 10. 8
years.
Create 50 million plus new urban jobs.
Rebuild 20 million housing units in rundown urban
areas.
Average Life Expectancy rises by 1 year in China.
Jpanese experience: supply creates demand
• Revolution in Kitchen
• ——Rice cooker, tableware, preservative film(PVDC) , etc.
• Revolution in washroom
• ——Toilet cover, small appliance, daily chemical products, etc.
• Hair washing and care: “no silicon”; Hair dye: “no
ammonia”; Detergent (powder) : “without phosphorus and
fluorescent whitening agent”; Cosmetics: “lead-free”, etc.
• Revolution of bedding articles
• ——textile Upgrading
• Revolution of home decoration
• ——Advocate natural materials——formaldehyde-resistant and
so on.
Aging industry and medical services
Sports industry will produce 3 trillion yuan by 2020 and 5
trillion yuan market value by 2025.
China is building 20,000 special schools featuring football
training in 5 years.
Multi-tiered cultural products and elements market will be
established.
——To encourage the combination of financial capital
social capital and cultural resources.
Expand the scope of tourism, including developing
"beautiful village tour" and exploration tour.
Remote online education——MOOC market
Information service
Financial reform and deleveraging
Wu Xiaoling: China issued 30 Billion dollars
Figure 8 China's foreign exchange reserves
trillion credit loan from 1949 to 2008. between 2011 and 2015
The figure rose by 63 trillion between
2009 and 2015. That is to say, double
the loan size extended during the
pervious 30 years was extended within
the subsequent 7 years.
She concludes that excess money
supply results in either rising price or
bump in asset price.
By the end of March in 2016, Renminbi loan increased by 4.61 trillion yuan in the
first quarter (2.51 trillion in January).
M2 balance is 144.62 trillion yuan, up 13.4% year on year.
M1 balance is 41.16 trillion yuan, up 22.1% year on year.
M0 balance is 6.47 trillion yuan, up 4.4% year on year.
Balance of China's foreign exchange reserves is 3.21 trillion US dollars at the end
of March. Exchange rate is RMB 6.2 /USD 1.
Deleveraging
Based on restoring market financing function and protecting
rights and interests of investors, stock market should give full
play to the adjustment function of market mechanism,
strengthen the establishment of basic systems of issuing and
delisting and trade, enhance market supervision, improve the
quality of information disclosure and crack down on insider
trading, price manipulation and other improper behaviours.
Focusing on improving the autonomy of monetary policy and
implementing balance of payments automatic adjustment
mechanism, foreign currency market should gradually form a
two-way floating exchange rate mechanism on the basis of
market supply and demand with flexibility while keeping the
exchange rate basically stable.
Ⅱ.“Three cuts, one reduction and one shore up"
(3)athlete:state-owned enterprise
China‘s oil consumption was 543 million tons in 2015 , with the
dependence on foreign trade exceeding 60% for the first time.
Currently China’s oil consumption outpaces its GDP growth rate. Total oil
consumption is projected to reach 600 million tons by 2020.
By 2030, 80% of China's oil consumption need to be imported.
China’s apparent natural gas consumption is expected to grow by 7.3% to
205 billion cubic meters in 2016. Natural gas imports is estimated to grow by
10.6% to 69 billion cubic meters.
Energy Development Strategic Action Plan (Year 2014-
2020)
Strategy of prioritizing energy saving -- Control the overall consumption of
primary energy within around 4.8 billion tons of standard coal and that of coal
within 4.2 billion tons.
Strategy of relying on domestic resources -- Ensure that, by 2020,
domestic overall production volume of primary energy reaches 4.2 tons of
standard coal, the energy self-sufficiency rate maintains at 85% or so, the
reserve and production ratio of petroleum increases to 14-15 and an
emergency system of energy reserves basically takes its shape.
Strategy of advancing green and low carbon -- In 2020, non-fossil energy
accounts for 15% of primary energy and natural gas 10%; coal contributes less
than 62% to the energy consumption mix.
Strategy of emphasizing innovation-driven growth -- A modern energy
market system featuring integration, openness, competitiveness and orderliness
is basically formed by 2020.
China's Energy Utilization Status
Shanghai “Wai3 Miracle” justifies China's thermal power
Vietnam
Administrative
Planning Graph
Population
Heihe-Hengchong
Density
geographical population line
(person/km2)
Northern Sand Belt
Qinghai-Tibet Plateau
Ecological Barrier
• Projects invested
by China
• Korean investment Railways
(suspended)
• Indian investement
(suspended)
China Railway Construction Corporation, by adopting the EPC (Engineer, Procure, Construct) method,
finished the construction of the fastest railway in Angola. The length of the railway reaches 1,344 km.
Mombasa-Nairobi Railway
constitutes the starting section of the
East African railway network.
Constructed according to China's
national railway Class One Standard,
the railway measures 480 km in length
and has a carrying capacity of 25
million tonnes. It links Nairobi, capital
of Kenya, with Mombasa port, the
largest port in the area, and is
expected to lead to the six East African
countries of Kenya, Tanzania, Uganda,
Rwanda, Burundi and South Sudan in
the long run.
Road in Rowanda
built with the help of
China
Chinese manufacturers in Rwanda -- one main attraction of African countries is that with
the preferential trade agreement they signed with European and American countries,
manufacturers of textile products are exempt from import taxes as high as 30%.
Broadband China Strategy
As the 4G network is being
constructed on a large scale, the three
Chinese mobile operators, CMCC, China
Unicom and China Telecom, are
confronted with the grave pressure of
building more transmission stations and
towers. The establishment of
independent base station/tower
enterprises would facilitate their sharing
of such resources as machinery rooms,
stations and pipes, effectively reduce
network construction costs and accelerate
of network construction process.
XI Guohua, chief executive of CMCC, stated that, “the tower enterprise jointly invested by the
three giant operators would be completed in the third quarter of 2015. When completed, the
enterprise would receive facility assets of 2G, 3G and 4G in the first place. Newly-added facilities
would be introduced as the priority, followed by other existing ones. The total value of these
facilities reaches around 200 billion yuan.
The ownership structure is as follows: CMCC, as the largest shareholder, owns 40% of the
equity; China Unicom 30% and China Telecom 30%. Private capital is expected to be introduced,
but its share shall not exceed that of CMCC.
Broadband World Stragety
The Laos satellite station project China
undertook was launched.
At 00:07 on November 21, 2015, the
Laosat communications satellite was
launched by Longue March 3B in Xichang.
Laosat is another communication satellite
project independently implemented by
Chinese enterprise following the Laos
broadcasting-communication satellite of the
China Asia-Pacific Mobile Communication
satellite Co., Ltd. The launch of Laosat is
groundbreaking in satellite export by
Chinese private enterprise. The project is
contracted by Laos LH International satellite
Communication Co., Ltd (a Sino-Laos joint
venture). Once put into operation, the
satellite will provide Laos with such service
as HD TV programs, telemedicine, remote
education and government emergency
communication. Meanwhile, the enterprise
will launch supporting projects, including
constructing satellite industry building,
satellite industrial parks and aerospace
science and technology university in
Vientiane.
Civil Aviation Transportation
-- National Civil Airport Layout Planning, By 2020, the number of
China‘s civil airports will reach 244, 97 of which are newly built after
2006, thus forming airport clusters in the five regions of northern,
northeastern, central south, southwestern and northwestern China.
-- By then, over 80% of national county-level administrative regions
and above will have access to aviation service even if the ground
transportation distance is only 100 km or takes only 1.5 hours. In
these regions, the population accounts for 82% and GDP 96% of the
national total. An airport network system consisting of hubs, arteries
and regional lines will take shape.
-- By 2020, the annual growth rate of cargo and passenger throughput
of airports nationwide will be kept at 15% and 11.4% respectively. The
number of airports handling over 30 million passengers annually will
be 13 (only 2 at present); 6 airports (only 3 at present) handling 20-30
million passengers and 10 (only 5 at present) handling 10-20.
The development of the general aviation industry
facilitates improvement of the comprehensive
transportation system, helps foster new areas of
growth and propels job creation and service industry
upgrading.
First, speed up building general airports in remote
areas, areas with inconvenient transportation, areas
frequently afflicted by natural disasters and areas
densely populated or confronted with severe traffic
congestion. Develop general aviation in main
agricultural production regions and key national forests,
to meet the demand of disaster relief, emergency
rescue, medical aid and industrial, agricultural and
forestry development. Set proper the general airports
construction standards and encourage enterprises and
Build over 500 general airports by 2020 individuals to be participants of airport construction.
Send, accelerate the R&D and application of
general planes, navigation communication
facilities and other core equipment, and cultivate
general aviation enterprises with international
competitiveness. Apply general aviation in such
fields as resource prospection, environment
surveillance, and transportation service.
Third, steadily open the low-altitude
airspace. Streamline the review and filing
process of general aviation flight tasks,
intensify safety supervision for flight and air
defense safety.
Waterway -- ocean transportation, coastal transportation
and inland river shipping
The State Council approved the National Inland Waterway and
Port Layout Planning in 2007
By 2020, an all-weather modern water transportation safety
supervision and rescue system featuring prompt response, covering
all areas and focusing on Chinese coastal cities and Yangtze River
basin basically takes shape.
-- High-end inland waterways and major ports will be established
in 20 provinces, prefectures and municipalities nationwide. 27
national class-one ports will be in place to connect 56 cities with a
population of over 500,000, thus linking main resource areas with
consumption areas.
-- Guide and advance the upsizing and standardization of shipping
vessels, in a way to promote the upgrading and modernization of
inland water transportation industry, save a large amount of land
resources and enhance comprehensive transportation capacity.
The Fifth Largest Transportation Industry -- China's Oil and
Gas Pipelines Network
In April 2009, China and Russia signed an agreement concerning the designing,
construction and operation of pipelines leading from Skovorodino, Russia to Chinese
borders. The length of the Sino-Russia crude oil pipeline measures around 70 km in Russia
and 960 km in China.
At present, China has built and operated long-distance oil and gas pipelines of over 60,000
km, the length equaling 1.5 rounds of the equator. Among the 60,000-km pipelines, 17,000
km are used for crude oil, 1.2 for refined oil, 3.3 for natural gas and 3,000 offshore.
As the major pipeline projects such as those transmitting gas from west to east and those
carrying crude oil products in western China, a oil and gas supply pattern featuring
transmitting oil and gas from west to east and from north to south is taking shape.
By the end of the 11th Five-Year Plan, the total length of oil and gas pipelines would
exceed 80,000 km, forming four largest oil and gas transmission channels in northeastern,
northwestern and southwestern China and offshore.
In 2009, apart from such major projects as central Asia pipeline and the WEPPII under
construction, the oil and gas transmission projects of building the third Shaanxi-Beijing
pipeline, the Qinhuangdao-Shenyang pipeline, Shandong natural gas network and Huining
double pipelines were also launched successively. Besides, the construction of China-
Myanmar pipeline, the second phase of national reserve storage and business reserve
storage are also under consideration.
Since 2010, China will also make plans for the building of the third west-east natural gas
pipelines, crude oil pipelines in Duwushan, Changlan, Yin and Dajin as well as the Dajin-
Zhengzhou refined oil pipelines.
Roadmap of bringing the gas from west to east
Project at the Colombo Port City, Sri Lanka
got the works resumption approval