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What is the "4 trillion plan" to bring to China
2018/4/24
China's 4 trillion stimulus plan, the world's governments have been very grateful. China is a big face in those two years, of course, their lining is in a complete mess. Today, the 4 trillion to us leave, thoroughly soak in water in the mountains of debt, and do not know spend much time to completely digest the excess capacity; of course, give us brought today's supply side reforms.
The "4 trillion plan" to China brought what 2008 American debt crisis hit, at that time, China was the biggest impact is the external market to freeze for an instant, for at that time to export economy as the core of the world's first production capacity in China, the current impact is enormous. Thus, China's financial and asset market is also facing the another round of huge retracement; while the export enterprise bankrupt and unemployed workers and impact management fragile heart. They just did not see this is a must for China's economic structural adjustment.
Take advantage of adjusting window and deep pocketed face
After the 2008 crisis, the same as domestic capacity: Yen depreciation, expanding the market, protect the capacity; Germany during the crisis, the euro depreciated, capacity clear, wages fall, retired late, low cost, high efficiency, debt reduction; and I central country exchange rate rise, prices quadrupled, pay the, capacity expansion the, coal rose, imports increased, abroad more. All the good times of the years, we have to thank the 4 trillion stimulus plan, we believe that in addition to our gratitude, the world's governments have been very grateful. I have a big face is the central powers in the two years, of course, our own lining is broken into in a complete mess.
Today, the 4 trillion to us leave, thoroughly soak in water in the mountains of debt, and do not know spend much time to completely digest the excess capacity; of course, give us brought today's supply side reforms.
Integrated disease ills, rely on debt of opium
Since 2008, the infrastructure investment as the representative to the real estate consumer as the core, to the heavy heavy industry upstream industry to rely on the government and enterprise cluster forced expansion of the table, and rod, the formation of the domestic debt expansion structure and system of stimulating the economy. With the real estate prices see weak roof, corporate cash flow and debt scale is too large, economic growth parallel downward and debt deflation, led directly to the private sector (including corporate and family) the contraction of credit, the whole society deleveraging, and into a liquidity trap, led to the whole society into "debt deflation" (lrving Fisher) and "asset liability table recession" (Koo) the greatest difficulties.
By expanding the public sector, the government sector debt replacement of other sectors of the debt, the downward trend of the economic trend of hedge. Today, after 09 years and 11 years after the two rounds of domestic debt has been completely distorted, into a greater debt cycle. The rapid expansion of the size of the whole society debt, corporate profits and cash flow cannot repay captital with interest, social reality of the high cost of financing, funds poured into financial assets such as P2P, trust, local financing platform, banking, Internet banking and other. All these prove after two plus leverage distortions, the current domestic debt cycle has entered late Ponzi stage, Minsky moment has already arrived.
Since the crisis, in the 4 trillion fiscal stimulus, central bank balance sheet rapid expansion of the table, agency domestic financial the rapid expansion of the scale, formed to support the total social financing scale of RMB loan volume, and promotes the transmission mechanism of enterprises and government departments to increase leverage, eventually lead to domestic debt scale straight rise.
First of all, the central bank balance sheet expansion, the scale of money increased by over 2 times the size of the same period GDP M2 growth of 2.2 times. Till the end of 15, the central bank M1 supply for 40.1 trillion yuan, M2 to 139.2 billion yuan; in late 2008, M1 and M2 in total were 16.6 trillion yuan, 47.5 trillion yuan, 7 years, the scale of M1 increased 2.4 times, M2 scale increased 2.9 times. From the growth of M2 and GDP contrast, as of the end of 15, the same period M2 expansion of the scale of the same period, while the same period GDP growth of the scale of the same period, 7 years M2 scale growth is 2.5 times the GDP increase over the same period.
Secondly, in order to maintain debt, 6 years of rapid growth of social financing scale, an increase of nearly 200%. Since the end of 10 Central Economic Work Conference for the first time put forward "keep reasonable social financing scale and pace", rapid expansion of the financial agency of the total, become support on a round of the expansion to the real estate as the basic core, heavy heavy industries and other production industry characterization. 13 years of social financing scale up to 07 years, the scale of social financing was only 190.12% years, years, an increase of as high as 7.
Again, the local government debt investment, the size of the debt doubled. 07 years to 14 years, the local government's total liabilities increased by a total of, up to a total of more than a year, an increase of 118%. From the perspective of the structure of government debt, 12 years, the city and county levels of government debt rapid expansion, 12 years and 1.3 years, respectively, increased by 0.6 times, becoming the most rapid growth in the past 3 years, the domestic debt sector.
Fourth, corporate leverage expansion, the scale of liabilities increased by 222%, the corporate sector leverage ratio soared. 08 years, under the fiscal expansion, the central bank drainage and commodity prices and other factors, driven by the 09 consecutive rounds of enterprises with 11 consecutive plus leverage, debt, capacity expansion. By the end of 15, the domestic non-financial corporate sector total liabilities of up to 3.2 times, times the growth rate of 08 years, the corporate sector leverage ratio increased by 24 percentage points to 123%.
Finally, compared with other departments and other countries, the domestic residents of the Department of leverage ratio is low (36.4%), but also experienced a rapid increase in the leverage ratio. 08-14 years, the residents of the leverage ratio rose from 18% to 36.40%, an increase of more than 100%. Thankfully, the global horizontal comparison, China's household sector leverage rate at the lowest level in the major economies; of course, in domestic government, non financial enterprises and the household sector, the household sector leverage rate is the lowest, which is to promote the supply side reforms set aside some wiggle room.
The "4 trillion plan" to China brought what 2008 American debt crisis hit, at that time, China was the biggest impact is the external market to freeze for an instant, for at that time to export economy as the core of the world's first production capacity in China, the current impact is enormous. Thus, China's financial and asset market is also facing the another round of huge retracement; while the export enterprise bankrupt and unemployed workers and impact management fragile heart. They just did not see this is a must for China's economic structural adjustment.
Take advantage of adjusting window and deep pocketed face
After the 2008 crisis, the same as domestic capacity: Yen depreciation, expanding the market, protect the capacity; Germany during the crisis, the euro depreciated, capacity clear, wages fall, retired late, low cost, high efficiency, debt reduction; and I central country exchange rate rise, prices quadrupled, pay the, capacity expansion the, coal rose, imports increased, abroad more. All the good times of the years, we have to thank the 4 trillion stimulus plan, we believe that in addition to our gratitude, the world's governments have been very grateful. I have a big face is the central powers in the two years, of course, our own lining is broken into in a complete mess.
Today, the 4 trillion to us leave, thoroughly soak in water in the mountains of debt, and do not know spend much time to completely digest the excess capacity; of course, give us brought today's supply side reforms.
Integrated disease ills, rely on debt of opium
Since 2008, the infrastructure investment as the representative to the real estate consumer as the core, to the heavy heavy industry upstream industry to rely on the government and enterprise cluster forced expansion of the table, and rod, the formation of the domestic debt expansion structure and system of stimulating the economy. With the real estate prices see weak roof, corporate cash flow and debt scale is too large, economic growth parallel downward and debt deflation, led directly to the private sector (including corporate and family) the contraction of credit, the whole society deleveraging, and into a liquidity trap, led to the whole society into "debt deflation" (lrving Fisher) and "asset liability table recession" (Koo) the greatest difficulties.
By expanding the public sector, the government sector debt replacement of other sectors of the debt, the downward trend of the economic trend of hedge. Today, after 09 years and 11 years after the two rounds of domestic debt has been completely distorted, into a greater debt cycle. The rapid expansion of the size of the whole society debt, corporate profits and cash flow cannot repay captital with interest, social reality of the high cost of financing, funds poured into financial assets such as P2P, trust, local financing platform, banking, Internet banking and other. All these prove after two plus leverage distortions, the current domestic debt cycle has entered late Ponzi stage, Minsky moment has already arrived.
Since the crisis, in the 4 trillion fiscal stimulus, central bank balance sheet rapid expansion of the table, agency domestic financial the rapid expansion of the scale, formed to support the total social financing scale of RMB loan volume, and promotes the transmission mechanism of enterprises and government departments to increase leverage, eventually lead to domestic debt scale straight rise.
First of all, the central bank balance sheet expansion, the scale of money increased by over 2 times the size of the same period GDP M2 growth of 2.2 times. Till the end of 15, the central bank M1 supply for 40.1 trillion yuan, M2 to 139.2 billion yuan; in late 2008, M1 and M2 in total were 16.6 trillion yuan, 47.5 trillion yuan, 7 years, the scale of M1 increased 2.4 times, M2 scale increased 2.9 times. From the growth of M2 and GDP contrast, as of the end of 15, the same period M2 expansion of the scale of the same period, while the same period GDP growth of the scale of the same period, 7 years M2 scale growth is 2.5 times the GDP increase over the same period.
Secondly, in order to maintain debt, 6 years of rapid growth of social financing scale, an increase of nearly 200%. Since the end of 10 Central Economic Work Conference for the first time put forward "keep reasonable social financing scale and pace", rapid expansion of the financial agency of the total, become support on a round of the expansion to the real estate as the basic core, heavy heavy industries and other production industry characterization. 13 years of social financing scale up to 07 years, the scale of social financing was only 190.12% years, years, an increase of as high as 7.
Again, the local government debt investment, the size of the debt doubled. 07 years to 14 years, the local government's total liabilities increased by a total of, up to a total of more than a year, an increase of 118%. From the perspective of the structure of government debt, 12 years, the city and county levels of government debt rapid expansion, 12 years and 1.3 years, respectively, increased by 0.6 times, becoming the most rapid growth in the past 3 years, the domestic debt sector.
Fourth, corporate leverage expansion, the scale of liabilities increased by 222%, the corporate sector leverage ratio soared. 08 years, under the fiscal expansion, the central bank drainage and commodity prices and other factors, driven by the 09 consecutive rounds of enterprises with 11 consecutive plus leverage, debt, capacity expansion. By the end of 15, the domestic non-financial corporate sector total liabilities of up to 3.2 times, times the growth rate of 08 years, the corporate sector leverage ratio increased by 24 percentage points to 123%.
Finally, compared with other departments and other countries, the domestic residents of the Department of leverage ratio is low (36.4%), but also experienced a rapid increase in the leverage ratio. 08-14 years, the residents of the leverage ratio rose from 18% to 36.40%, an increase of more than 100%. Thankfully, the global horizontal comparison, China's household sector leverage rate at the lowest level in the major economies; of course, in domestic government, non financial enterprises and the household sector, the household sector leverage rate is the lowest, which is to promote the supply side reforms set aside some wiggle room.
Links：
Department of Commerce of Anhui Province
| Mcdonald 's
| China Business Network
| Ministry of Commerce of P.R. China
| HC Net
| Pursmatt
| Alibaba
| Wal-mart
| Carrefour
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