In my personal view, the current economic recovery should be attributed to the continuation of the old cycle, rather than the opening of the new cycle. In 2016, the main driver of the growth on the one hand rolex replica came from the more powerful real estate investment, on the other hand from the continued high investment in infrastructure. In the second half of 2015 to 2016, China’s second-tier real estate market entered a new round of rising cycle, leading to real estate investment growth from 2015 to 2.5% of the year significantly increased to swiss replica watches 2016 annual 6.8%. The first quarter of 2017, real estate investment is still at a high level of 6.8%. In the year of 2016, the growth rate of manufacturing and real estate investment in the three major investments was 4.2% and 6.8% respectively, but the investment growth rate was 17.4%. The first quarter of 2017, infrastructure investment growth is as high as 23.5%. This reflects the counter-cyclical efforts of the local government to respond to the economic downturn. In other words, the strong growth of China’s economy in the first quarter of 2017 continued to come from the contribution of traditional growth, such as real estate and infrastructure.
There are views that the new medium period (capacity cycle) may have been opened. Their argument is that the structural reform of the replica watches uk supply side has significantly improved the situation of overcapacity in the past. At present, the profits of leading enterprises in some industries are well maintained, and there will be a lot of cash. There will be a strong incentive to update production capacity and even establish New capacity.
However, at the end of the domestic and international demand is still weak under the premise of enterprises to invest in new capacity is probably still in the doldrums. For example, there are studies that show that in the middle reaches of the listed companies, those who focus on the faster increase in the industry, the lower the willingness to spend capital. This indicates that the current inventory cycle (short period or old cycle) can not be conducted to the production cycle (medium period or new cycle).
Although China’s economy started well this year, it remains to be seen whether economic growth has been completely out of the L-type decline. China’s economic growth is at least facing the following factors: First, the current urban and rural residents disposable income growth despite GDP growth, but the former since 2012 has been in decline. It is difficult to believe that the consumption of residents can grow strongly until the decline in urban and rural incomes has not changed. In fact, the current contribution to the growth of GDP growth is indeed rising, but the main reason for the increase in consumption contribution, not strong growth in consumption, but the investment growth rate fell too fast. Second, in the three major investments, private enterprise manufacturing investment is still faced with the ultimate weak demand, a variety of high cost constraints, the sustainability of real estate investment is facing the expansion of the real estate bubble caused by macroeconomic regulation and control to strengthen the constraints Investment is facing the impact of high local government debt. Third, the export is facing the global economy has not yet completely out of long-term stagnation, developed countries, the rise of trade protectionism pressure, the effective exchange rate level of the currency is still overvalued and other challenges, the sustainability of its growth is still facing greater pressure.