Late decline by fdjerue7eeu


									Late decline
Late decline
Wen □ Xiaonian
Xiaonian Description: Renmin University of China in 1981, received
master's degree in Industrial Economics, 1991, University of California,
Davis received a Ph.D. in economics. In 1999 -2004 was the Managing Director of
China Research Department International Finance Corporation, previously served as
senior economist at Merrill Lynch Asia Pacific and the World Bank consultants.
Research areas include: macroeconomics, finance, financial institutions and financial
markets, transition economies and China's economic reforms.
December 27, 2008, Central European Business School professor Xu Xiaonian large
lecture hall in the Yanshan a report entitled "late recession"
keynote speech, the following main elements:
Xiaonian: I am delighted to Yanshan Lecture Hall. I very much agree with the
tradition of Yanshan large auditorium, lecture at universities, first of all adhere to
critical, the second is constructive, the third is open, the fourth is the independence,
intellectuals must be independent, otherwise no value I hope the Yanshan large
auditorium can go all the way along this road. By the Cultural Revolution, we feel
that the word critique is very pejorative, the word in English is a neutral word, its
current conclusions, always critical of the existing concept of the attitude of suspicion,
only that attitude to promote the academic development, to promote public policy, I
think criticism is very important.
Recession more severe abnormalities
I am going to talk today entitled "late recession." The current
economic situation our country how serious? Should be said that very serious. I
recently ran two trips south, to a number of more serious crisis-affected areas, such as
Dongguan, Zhongshan, I see companies cut production, suspend production or even
close, a large number of workers will be dismissed, because the government does not
allow factory lay off workers, so called "leave without pay,"
early this year, also the arrival of migrant workers returning to their homes. Negative
growth in exports of electricity of negative growth, the rapid growth of profits of
industrial enterprises decreased 9-November growth rate of profits of industrial
enterprises is negative.
Rate of economic decline than anyone expected, including me, I feel a recession
coming, but did not expect came so fierce, it also contributed to each of our
economists to think how the Chinese economy in the end matter, the world matter
how the economy in the end? the first half of all policies are 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 faster economic growth. The risk of inflation
almost disappear in a few weeks, and now we are facing deflation, recession, prices
fell, unemployment rose. Government in a very short period of time introduced a four
trillion fiscal stimulus package, marked China's entry into the world
believe in the ranks of the Keynesian state, Keynesian can not be applied in
today's China? That I will mentioned.
Let's look at why our country's economy within a few months a
dramatic change because of the financial tsunami Are? Because of external factors?
The answer is not the case, you want to understand why, we To look back over the
past few years China's rapid economic growth. We must also ask why the
financial tsunami, the world's governments do not see the direction of the
world's most developed economies, the most powerful U.S. economy is the
financial tsunami Gaode find any. Once the U.S. financial system collapse, dangerous
climax of months of this year's 10,11, financial institutions collapse,
Lehman Brothers bankruptcy 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's economy
may be drained. The U.S. government worked hard to make the whole building from
complete financial collapse.
How what happened? This is a very long story to say, I say the view is just one of
many explanations, not necessarily my understanding is correct, the only.
Wind in 2001
This should start with 2001. In 2001 the world economic stage a major event took
place is the Internet bubble burst. Meanwhile, in 2001 China joined the WTO, this is a
landmark event, before that, with China in the emerging market countries have their
own economy and the global economy closely linked. China joined the WTO, marked
the world's two largest economies, one developed market economies the
United States, one in developing countries, China, has been inseparable, the historic
all right. But this degree of Tigao Economic Association, the world Geguo
government, including the United States, the Chinese government academia, business
Du lack of understanding, with Guo Qu Huan Ren Men's habits of thinking,
to Chu Li Jing Yan with the last of the two economies Ti Yijingrongge together today.
The result is wrong, planted the seeds of the financial tsunami.
China's accession to WTO, the United States received what benefits? First,
the "Made in China" to help Americans effectively curbed
inflation, and why? Because a large number of products imported from China, while
Chinese products are cheap. Second, the Americans suddenly found that China is such
a huge world of plants in the United States in negotiations between employers and
employees, employers position has been strengthened. The United States and China,
not the same as inflation, China's inflation is caused by a supply shortage,
such as sick pigs in Sichuan, pork prices are up. The biggest reason for U.S. inflation
from rising wage costs, it is a market more developed countries, supply-side
bottlenecks are almost not, it is the big push inflation, wages, wages increased by
more than the labor productivity The increase in workers compensation than workers
with a wealth of labor occurs when inflation. The China factor in this part of the
United States curbed inflation, U.S. employers to employees that you want to increase
the wages I give you Canada, I can let the Chinese people for me to do, under their
orders to China, you want to strike me China would not have done, so the
"China factor" to suppress the U.S. inflation.
Inflation policy with the United States What is the relationship? With which the
United States policy in China? Course of monetary policy.
America's Story
If there is no inflation, the authorities can maintain a loose monetary policy, inflation
is up only when the world's central banks will tighten money supply,
interest rates, tightening the method used to reduce aggregate demand, the inflation
suppressed. As China's presence, the United States in a very long time to
maintain high economic growth, and there is no inflation, Greenspan this time a bit
confuse, why the U.S. economy is not inflation? He wanted to raise rates, but can not
see inflation, not the enemy What is the point there you fire a gun? high economic
growth there anything wrong with it. Among the hesitant, Greenspan put
"911" when the low interest rates maintained for two years. 911
Why should cut interest rates? As 911 attacks that made the U.S. financial system into
chaos, between the financial system liquidity problems, 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, Greenspan Pan cut substantially after the
911. However, Greenspan in a very long time do not see any signs of inflation, so he
just wait! So! So! Have to wait until mid-2004, inflation began to rise in the United
States, Greenspan began raising interest rates, tightening money supply, but it was too
late. 2001 to 2004, the interest rate is the lowest level after the war, about 1%, of
course, today the U.S. interest rate than the "911" had never
been seen lower.
Post-war low interest rates to keep 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 all about money too much. 1% interest rate, peopl

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