China's economy next year, up the risks outweigh downside risk

From China's economic growth situation, in the first half year of 2011 is still up fell back, is the second half year-on-year stabilising picks up, from the annulus comparing to see, the first and the second growth speed roughly smoothly, although domestic demand in the second half because regulation effective may slow, but may be part of the downside risk to the economy by the written. Therefore, on the whole, in 2011 China economic uplink the risks outweigh downside risk, macro policy should avoid excessive reaction to the downside risks. So in 2011, China's economy is the biggest risk to the global liquidity loose inflation and asset bubbles. Therefore, macro policy point should be rising inflation and asset bubbles in the prevention and control. Usually, the government in the evaluation of the economic situation, the custom economic downside risk estimates that a little, and the economic uplink risk evaluation of the a bit less, this kind of traditional thinking itself is risks. Economic growth: downside risk is not big, avoid excessive policy response 1. Export growth basic judgment is: although China's export to return to the supernormal growth before the crisis, but ZhongDiDuan the international competition ability of the product still exists, the next few years's share of world trade will continue to increase. In 2011, global trade growth will be in 5%, 8%, and between the Chinese export growth of 10% or more. For over 30 years of reform and opening up, China's export with an average annual growth rate of more than 16%, and the 2001-2008 more experienced a supernormal, at an average rate of 25%, but this is not normal, it's hard to return to the rate of growth of similar. 

The reason is that: 2001-2007 is the global economy supernormal boom, the world market expansion very fast; China's accession to the WTO, speed up the pace of integration into the world also. The two extraordinary just fusion together to China's exports of super speed growth. 2. Investment and consumption in 2011 China investment and consumption growth is still difficult to apparent. The positive factors including China domestic demand still greater space, residents of the family leverage ratio is still low; Negative factors include experience round after stimulating policies, investment and consumption will be back to normal. In the infrastructure investment, 2011 infrastructure investment growth will slowdown in the Midwest will basically is a relatively weak growth. In the real estate investment, the government may also will continue to take a tight situation, but will also increase the public housing, affordable housing. In manufacturing investment, 2011 this year than the great progress, the observed the enterprise with foreign capital investment has about started to rebound, various industries is high capacity utilization, including the steel industry. And next year's consumption may be a little faster than growth this year, on the one hand, the most recent period income growth, wage growth is faster, on the other hand in 2011 the government will also continue to expand the social security spending, including endowment insurance and medical insurance. Overall, 2011 Chinese economy still can achieve steady and fast growth, keep the rate of growth of more than 9%, little downside risks. If you consider that 2011 is the "1025" planning in the first year, the development of the impulse and policy cycle will be more apparent effect; Short-term risk still controlled, the government to economic entity should have a more robust judgment, macro policies should avoid excessive reaction. Inflation is the biggest uplink risk present policy debate mainly around the inflation. A basic view is: inflation has been formed, and more than 3% of policy bottom line, considering the CPI weight rent determined, the actual inflation pressure to report the data than out high. Can't boil down to simple monetary inflation high growth, high currency is difficult to explain vegetable prices up; Also can't boil down to simple wages rise, because wage growth is actually slow; At present to the transmission of PPI CPI is limited. Although the current inflation by some supply and natural factors trigger, but in the current liquidity inflow, the interest rate is negative, the food price inflation is easy to bring to spread to economic entity, evolved into the overall inflation. Therefore, monetary policy should be tight, liquidity management and raise interest rates should be, and not to say that tight monetary can restrain vegetable prices up, but can prevent it from spreading to the all the economic go up. At present, and some areas to take direct control of the prices in the short term measures may have a help, but not feasible medium and long term, if five months, vegetable prices to fall, not because of the result of direct price controls, but because farmers are increased supply. 2011 level of inflation judgment: the annual inflation will be higher, at 4%-5% between; Because QiaoWei factors in the first half, the second half will be greater than the inflation pressure; The second half and the summer food prices because base downward adjustment, inflation pressures will have fallen, but cooking oil, food and sugar prices at present is still weeks annulus comparing rise, food prices once ran high, not like vegetable prices dropped as soon, must go to the summer crops after harvest will be adjusted, this can happen in May 2011, after June, at this time also need to depend on the summer crops crop condition. Therefore, from the current trend, if no major natural disaster, the annual inflation next year is expected to peak in the first half of may mainly, tightening monetary, raise interest rates and the appreciation of the renminbi and other policies will mainly focus on the time window.