Recession in late Xiaonian

 December 27, 2008, China Europe International Business School professor Xu Xiaonian large auditorium in the Yanshan a report entitled . I very much agree with the tradition of Yanshan large auditorium, lecture halls in college, first of all adhere to the criticism, the second is constructive, and the third is open, the fourth is the independent, the intellectuals must be independent, otherwise there is no value, I hope Yanshan large auditorium can go all the way down the road. by the impact of the Cultural Revolution, we think that the word critique is very pejorative, the word in English is a neutral term, the conclusions of its existing , always critical of the concept of the existing attitude of skepticism, only this attitude can promote the development of learning in order to promote public policy, so I think criticism is very important.
recession more severe abnormalities < br> I am going to talk today is titled areas, such as Dongguan, Zhongshan, I see companies cut, cut or even close, a large number of workers were dismissed because the government does not allow factories lay off workers, so called Chao is also ahead of the arrival. negative growth in exports, electricity generation negative growth, profit growth of industrial enterprises decreased rapidly ,9-11 profit growth rate in industrial enterprises is negative.
economic downturn faster than all expectations, including myself, I feel a recession coming, but did not think came so fierce, it also prompts us to think every economist, the Chinese economy in the end how, the world economy in the end how is it? the first half of all policy are designed to prevent inflation, to the excessive growth rate down, in a few months time, 180-degree policy turn, all the policy instruments are used to ensure rapid economic growth. almost the risk of inflation in several disappeared between weeks, and now we are faced with deflation, recession, falling prices, rising unemployment. The Government in a very short period of time introduced a four trillion fiscal stimulus package, marked China's entry into the world believe in Cairns the ranks of capitalist countries, can apply Keynesian in today's China? I talked about this later.
us first look and see why our country's economy within a few months a dramatic change Is is because of the financial crisis? because of external factors? The answer is not the case, you want to understand why, we still have to look back over the past few years China's rapid economic growth. we have to ask why the impact of the financial tsunami Under the direction of the world's governments do not see the world's most developed economies, the most powerful U.S. economy is the financial tsunami do a find any. the U.S. financial system was facing collapse, dangerous climax in January of this year's 10,11 financial institutions collapse, the collapse of Lehman Brothers makes the whole financial market freeze, people Xinhuang Huang, precarious. If not the U.S. government to take urgent measures, the largest U.S. investment bank Goldman Sachs, Morgan Stanley's second-largest investment bank to be closed down The world economy may be drained. The U.S. government worked hard to make it from complete collapse of the financial buildings.
exactly how the case? This is a very long story to say, I say point of view, only one of many explanations, not necessarily my understanding is correct, the only.
wind, which in 2001
from .2001 in 2001 to begin with took place on the world economic stage, a event, is the Internet bubble burst. Meanwhile, in 2001 China's accession to WTO, this is a landmark event, before that, with China as the representative of the emerging market countries have their own economy and the global economy closely linked. China's accession to WTO, marked the world's two largest economies, one developed market economies the United States, one is developing in China, has been inseparable, the historic all right. But for this economic correlation the improvement of world governments, including the United States, the Chinese government's academic, business are lack of knowledge, people with past habits of thinking, using past experience to deal with these two economies have together today. result made a mistake, planted the seeds of the financial crisis.
in China's accession to WTO, the United States gains access to what? First, the products imported from China, while Chinese products are cheap. Second, the Americans suddenly discovered that there is such a huge world of Chinese plants in the United States of negotiations between employers and employees, the employer's position was strengthened. U.S. inflation Unlike in China, China's inflation is caused by supply shortages, such as sick pigs in Sichuan, pork price shot up. And the biggest reason for U.S. inflation from rising wage costs, it is a more developed market countries, supply-side bottlenecks almost is not, it is the big push inflation, wages, wages increased by more than the rise in labor productivity, workers pay more than the wealth of workers with labor occurs when the inflation . The China factor in the inhibition of this part of the U.S. inflation, U.S. employers to employee said, you want more money I will not give you add, I can do for me the Chinese people, under their orders to China, you want to strike me not made in China, so the U.S. inflation is the story of
If not, the authorities can maintain a loose monetary policy, inflation up only when the world's central banks will tighten the money supply, interest rates, tightening method used to reduce social aggregate demand, the inflation pressure down. As China's presence in the United States in a long time to maintain high economic growth, and there is no inflation, Greenspan a bit confused at this time, why the U.S. economy is not inflation? he wanted to raise interest rates, but can not see inflation, the enemy does not appear you fire a gun what does this mean? high rate of economic growth there is anything wrong with it. in being hesitant, Greenspan put Why should cut interest rates when the .911? as 911 attacks made the U.S. financial system into chaos, liquidity problems among financial system, the U.S. business confidence will be seriously affected, in order to stimulate investment and stimulate consumption to prevent the U.S. economy into recession, Green Greenspan after the dramatic cuts in the 911. However, Greenspan in a very long time do not see any signs of inflation, so he'll wait! so! so! wait until mid-2004, inflation began to rise in the U.S. Greenspan began raising interest rates, tightening money supply, but it was too late to .2001 after the war in 2004, the interest rate is the lowest level in about 1%, of course, today the U.S. interest rate than the moment is lower.
to maintain low interest rates after the war more than two years, causing the problem? low interest rates to excess liquidity. non-professional students may not understand the economy of liquidity, liquidity is money, money .1% of the interest rates too much, people will put the money in the bank be?, so the money wandering around in the market; 1% interest rate, the bank also released a large number of loans by people like money, because interest rates are low, capital is cheap; people do not save money, companies do not save money, and American families, businesses, financial institutions have a lot of borrowed money and borrowed the result is that we in terms of economics, the credit spread, liquidity flood We all live in borrowing money. Chinese people are tightening their belts to get along, we are the world's most frugal people, and our savings rate close to 50%, the highest in the world. U.S. savings rate? 0, For several years the savings rate is negative, borrowing money to survive. Why? too cheap to borrow money, interest rates too low, too much of a money economy is not a good thing, we should go wrong. Beijing under the rain, snow, We all feel so good rains in arid areas, very humid, but more than a second ring under the water under the bridge to the car to open is not passed, so the water can not be too much; a city water is not too much, an economy money can not be too much, too much money to the accident. If too much money, more than the physical needs of the economy, the extra money anywhere to? went to search for assets, as asset markets also fit the time, it transformed into assets bubble. too much money, how to do? into such stock, A stock Why rushed from 1,000 points 6,000 points, the U.S. stock market also, all the way to bullish. enter the property market, property market to create a large bubble in the expanding property market how the bubble is generated? is because too much money. commercial banks to get loans to people all got up, leaving those who are not qualified to get loans, but commercial banks and politicians in the United States are not eligible for these create the conditions for the people, let him borrow loans, such loans called real estate market, the real estate market bubble blowing one day at a large, blown bubble burst last year. the sub-prime after a big bubble blowing, coupled with financial innovation, MBS, made the sub-prime mortgage securitization, and then sold to investors, so the risk to spread to the market on the.
the root cause of the subprime mortgage crisis in the money too, why more money? because interest rates are low. Why do interest rates are low and not inflation? Pan is the chief culprit in the financial crisis, one of Greenspan's two big mistakes: first, monetary policy mistakes; the second is financial regulation error. Greenspan himself admitted a second mistake the other day, I think this is the easy way out, and now does not recognize the monetary policy mistakes. So Obama took office, he took Paul. Volcker asked to be director of economic regeneration committee, Paul is Greenspan's predecessor, Alan Greenspan should feel is lost, but his loss has nothing to complain about. This is the story of the American side.
Chinese stories
global economic integration, we will look at this side, China is how it was. U.S. money more, in addition to manufacturing the stock market bubble, the real estate bubble, but also to get the money to buy things on the international market, so the result of strong demand for Chinese exports. Although we are But outside demand for many, selling out will be able to make money. Since the strong demand, domestic enterprises to invest and increase production and supply capacity, since the beginning of this century the growth of our economy driven mainly by investment, investment-driven one hand, the strength of domestic demand the other is from overseas. After China's accession to WTO, there has been strong demand from overseas, we desperately investment, capacity of supply, the formation of too many products exported to the United States, which both sides of the fight together to form a complete international economic cycle.