Discover and read the best of Twitter Threads about #Macroeconomy
Most recents (6)
Given China’s macroeconomic environment in December 2022, the following policies should be taken to boost China’s economic growth and deal with potential risks, said ZHANG Bin, CF40 Nonresident Senior Fellow: 1/5
1. Lower interest rate by 25 bps each time until the employment and growth targets are hit.
2. Issue new types of fiscally subsidized bonds and policy loans to support investment in public goods and quasi-public goods infrastructure projects that feature limited returns.2/4
2. Issue new types of fiscally subsidized bonds and policy loans to support investment in public goods and quasi-public goods infrastructure projects that feature limited returns.2/4
3. Set up special funds to help market entities battered during the pandemic get back on their feet; increase the amount of living allowance for low-income groups. 3/5
Real interest rate offers an important clue for understanding China’s #macroeconomy now and beyond, according to CF40 report “Changes of Real Interest Rates and Combination of Fiscal and Monetary Policies”:
cf40.org.cn/Uploads/Pictur…
1/7
cf40.org.cn/Uploads/Pictur…
1/7
In 2000-2011, as #savings and #investments continue to boom in #China, the real #interestrate fell. The turning point arrived in 2011. After that until 2019, the savings rate and investment rate kept falling, and the real interest rate picked up. How to explain the change? ...2/7
The decline in the real interest rate in the first period was caused by the falling relative price of capital goods, deteriorated income distribution, longer life expectancy and lower dependency ratio...3/7
3 Observations of China’s macroeconomy in Q1 by Dr. Gao Shanwen:
1. Both offline and online consumptions plunged, showing the complexity of consumer behavior amid the pandemic. Even if economic activities are resumed, spending won't fully recover until the virus is eliminated.
1. Both offline and online consumptions plunged, showing the complexity of consumer behavior amid the pandemic. Even if economic activities are resumed, spending won't fully recover until the virus is eliminated.
2.1. Economic growth rate under the pandemic’s shock slumped by 4 times as much as that back in 2008, while COVID19’s impact on the general price level is only 20% of that of the financial crisis.
2.2. Changes in total demands and supplies and the gap in between worth equal attention in policymaking efforts. It’s unwise to rely too much on aggregate demand management.
1/5 China’s #economy has been under downward pressure this year,but unlike the past, housing policies havn’t been eased. Does this mean a “decoupling” of housing policy with counter-cyclical measures?At least not 100%, according to cf40 member Wu Ge: mp.weixin.qq.com/s/TMxIiUlVelvs… 
2/5As housing market and the performance of #macroeconomy is highly connected, housing market policies may not fully abandon the counter-cyclical approach, although policymakers have said #housing market will not be used as a tool to boost the economy in short-term.
3/5From the demand side on housing market, lending rate has remained stable overall, which could help stabilize sales of houses. The loan prime rate reform shows that policies still emphasize “stability” of housing market.
While #China’s fiscal policies should remain active amid ongoing #trade frictions andslowing down domestic demand,specific measures should focus on maintaining a steady growth of “broad credit” according to cf40 senior fellow Zhang Bin.
An equation for “broad credit”,according to him,is “social financing - equity
financing + national debt + general debt of local govnt.”
financing + national debt + general debt of local govnt.”
While maintaining steady growth of “broad #credit” has generally been regarded as a monetary approach, govnt spending is now critical to stabilizing #Chinese #macroeconomy. baijiahao.baidu.com/s?id=163993710…
Summary of #China’s #macroeconomy in May, by CF40 Senior Fellow Zhang Bin:
1. The #economy declined. #Manufacturing #PMI dropped 0.7%; PMI of big, mid and small businesses dropped 50.3%, 48.8% and 47.8% respectively.
2. #Industrial growth rate continued to fall.
1. The #economy declined. #Manufacturing #PMI dropped 0.7%; PMI of big, mid and small businesses dropped 50.3%, 48.8% and 47.8% respectively.
2. #Industrial growth rate continued to fall.
3. #Consumption growth picked up: total retail sales of consumer goods increased by 8.6% YoY.
4. Fixed #asset #investment dropped. In the first 5 months of 2019, #China's fixed asset investment grew by 5.6% YoY, down 0.5% from the figure for the first 4 months of the year.
4. Fixed #asset #investment dropped. In the first 5 months of 2019, #China's fixed asset investment grew by 5.6% YoY, down 0.5% from the figure for the first 4 months of the year.
