Downward Trend of China’s Economy

The first three quarters of this year, China’s economic growth rate declined quarter by quarter, the various changes from the current factors, the downward trend in the next two years the growth rate has been established in 2012, 2013, China’s economic growth rate will decline to 8% and 7% . Downward trend of China’s economic growth is not only the result of macro-control, but also the economy of endogenous factors. Because the main focus on macro monetary contraction, but the investment, consumption and export contraction, contraction is not directly related to the currency, but endogenous growth factors. Therefore, the downward trend in the economy will not be temporary, economic growth within the next two years or will continue downward. [Users something to say] the next two years to establish the economic downward trend
The first three quarters of this year, China’s economic growth rate declined quarter by quarter, the various changes from the current factors, the downward trend in the next two years the growth rate has been established in 2012, 2013, China’s economic growth rate will decline to 8% and 7% .
The “troika” sluggish
From an investment point of view, people tend to care only about the amount of investment to complete, but the demand perspective, the investment amount only needs to complete the “lagging” indicators. Because when the Bureau of Statistics reported data, as investment demand does not exist. Investment in the project’s construction process is the demand, once the project is completed, investments into supply, it should supply it as the “first” indicator. When we see a substantial amount of investment growth, when completed, should think of is the first substantial increase in supply capacity, rather than investment demand growth, because the annual amount of investment in fixed assets which will add more than 60% into fixed assets.
I think we should use the “construction projects with total investment” index the observed changes in investment demand, it shows all the investments in construction projects require much investment to complete, so you can reflect changes in inventory investment. If you look at construction projects with total investment, the first 10 months of this year’s growth rate of 19.8%, the first 10 months away growth rate of 25.7%, down 5.9 percentage points. However, this year’s high inflation rate over the previous year, the first three quarters of last year, investment in fixed assets price index is 3%, 6.8% this year, so actual stock investment last year’s growth rate is 22% this year, only 12.2%. That is the first 10 months of actual investment growth over last year contracted by 10 percentage points.
Real estate investment has a similar situation. In the first 10 months, real estate investment growth rate 31.1%, but still the amount of investment to complete. If the residential new construction area from the first indicators of real estate investment, it is shrinking dramatically. “Eleventh Five-Year” period, the average annual commercial residential new construction area growth rate was 18.7%, but the first 10 months of total residential new construction area of ​​-5.8%, which is -21.8% in October. This year all levels of government in the construction of affordable housing, according to the calculation of each 60 square meters, 10 million sets of 6 million square meters, accounting for 10 months before the new construction area of ​​12 million square meters of residential half, if you subtract the protection of housing construction area this year, the new construction area of ​​commercial housing declined significantly by 52%. Atrophy caused by real estate investment real estate, is bound to become the next economic downturn caused by an important reason.
Second, look at export demand. The first 10 months of this year, export growth rate of 22% or less in previous years may seem, but it must be noted that U.S. export growth rate is calculated at current prices. Subprime mortgage crisis, central banks in developed countries are released to save the city money the amount of days, the performance of exports in China since the beginning of this year the export price index increased dramatically. Meanwhile, the pace of yuan appreciation this year, to 10 end of the RMB has appreciated by 4.7%. Excluding these currency factors, calculated in RMB real export growth rate of only 6%, 9% had significantly lower rates of economic growth. Export growth than the economic growth, this situation since 2000, only the outbreak of the subprime mortgage crisis first appeared in 2008.
The third look at consumer demand. The only remains high is consumption. If the past three years and the average growth rate over the past 10 years, compared to consumption growth rate increased by 3.9 percent, investment increased by 2.6 percent, while exports fell 12 percent, clearly the contribution of consumption to economic growth rate increased significantly.
Consumption growth and rural incomes have a thriving relationship. In recent years, agricultural prices rose sharply, farmers’ income but also to follow up. 2010 and the first nine months of this year, growth in real income of urban residents is 7.8%, but the farmers’ income growth was 10.9% and 13.6%. This indicates that changes in the price mechanism between urban and rural redistribution of social wealth. China has 900 million farmers, the rural population is the main farmers’ income is bound to stimulate consumption boom.
However, although agricultural prices substantially increase their income, but led by rising food prices caused by the structural inflation. From October last year, the government macro-control anti-inflation focus on the implementation of a strong monetary tightening. After July of this year, consumer prices fell month by month trend there. But when we are pleased when a large number of agricultural products began to appear recently ‘difficult’ and the price crash reports, so the income of farmers is also difficult to sustain high growth, which gives future consumption growth has brought problems, the current CD a highlight of demand growth is also dim.
M1 M2 growth rate was significantly lower than
Means that the economic contraction
In fact the currency has also been demonstrated a significant trend in the economic downturn. As of late October, M2 growth rate was 19.3%, the end of October this year, has been contracted to 12.9%, the lowest point since the new millennium. Of course, this has anti-inflation factors active contraction, but the economic contraction not only in the intrinsic growth rate of decline in broad money, but also in narrow money growth rate substantially lower than the growth rate of broad money. Because of narrow money M1 is the currency for trading, M1 reflects the decline in production and business activities of the current contraction. Since the new millennium, M2 and M1, the average annual growth rate of only 0.7 percentage points difference, the basic is simultaneously increased. M2 growth in 2010 was 19.7%, M1 was 21.2%, M1 1.5 percentage points higher than the M2. Since early this year, M1 growth fell again, to the end of October has dropped to 8.4%, and poor growth rate of M2 has expanded to 4.5 percentage points, more than 0.7 percent normal times, the speed difference has been more than five times higher , and observe the last 30 years China’s economic performance, as long as there M1 M2 growth rate was significantly lower than the case, without exception, there will be significant economic slowdown.
In general, when M1 growth rate is lower than M2, the monetary transactions will become deposits, the deposits should be increased, but the deposits in July this year, down 600 billion, year on year in August and September by 370 billion yuan and less 730 billion yuan, to October, deposits and reduce 200 billion yuan, which indicates that the banking system in the outflow of funds. At the same time there is a proliferation of underground banks and usury rampant. This is due to monetary tightening, a large number of small and medium enterprises get loans from the banking system had to borrow loan sharks. Many surveys show that support for SMEs with loan sharks to operate, at most only stay six months, so the end of this year is likely to occur early next year, SMEs collapse climax, consequential economy slows significantly.
Production and a decline also reflected the economic trend, that is, changes in inventories. Inventories of raw materials inventory and finished goods inventory divided, in general, raw materials inventory increase reflects the company to prepare for the expansion of production, finished goods inventory may increase reflects the slow-moving. The first 11 months last year, inventories increased 30.9%, but the finished product inventories grew by only 11.2% this year to the end of August, inventories increased 26.1%, 23.4% growth in inventories of finished goods, raw materials inventory shows a substantial decline in growth rate, while growth in finished goods inventory significantly improved, it also reflects the production of contraction.
So, no matter from what perspective, China’s economic growth curve is downward trend. This trend is not only the result of macro-control, but also the economy of endogenous factors. Because the main focus on macro monetary contraction, but the investment, consumption and export contraction, contraction is not directly related to the currency, but endogenous growth factors. Therefore, the downward trend in the economy will not be temporary, economic growth within the next two years or will continue downward.
In the first 10 months of actual investment growth rate of contraction than 10 percentage points over the same period last year
Excluding currency, the yuan calculated according to the actual growth rate of only 6% of exports, has been significantly lower than the growth rate of over 9%
Consumption growth have a thriving relationship with the farmers ‘income, but farmers’ income, high-growth difficult to sustain, which gives problems to future consumption growth
Observed in China in recent 30 years of economic performance, as long as there M1 M2 growth rate was significantly lower than the case, without exception, there will be significant economic slowdown

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China-US Basketball Game Brawl

Chinese team members the day before the U.S. team in college basketball powerhouse Georgetown game, the two sides and led to gang fights because Dongzuoguoda event, almost all the players involved, the game was eventually forced to stop.

Both sides in this game against a very intense, making game from the outset, fiery, two players have a larger movement, which also foreshadowed the end of the brawl.

When the Section 8 minutes and 27 seconds left when the Bayi team when a player was fouled backboard, Xu Zhong Hao expressed dissatisfaction and tried to push the opponent about the theory, but this small conflict two players were both teammates quickly opened. After 1 minute, Xu Zhong Hao was in an offensive player directly to Georgetown University’s leave it to the ground, his anger towards the coach seats, protested loudly with each other’s coach.

Bayi team then moves gradually become larger, Georgetown University, an attack also suffered a serious foul, the two sides have been at daggers drawn at this time. End of game, two teams compete for rebounds in a time and twisted into a ball, Zhongguang was knocked to the ground, many conflicts brewing the fuse was finally lit, the two players began pushing each other, then turned into gang fights, and bench players who did not exercise restraint, all streaming to the arena brawl.

According to an eyewitness said the two sides into a ball court player in the scuffle, the bench players will have a chair thrown into the central arena, and the game of the audience threw a bottle of mineral water will be Georgetown University team alternate seat , a chaotic scene, the final race was discontinued.