In its World Economic Outlook released in October, the International Monetary Fund (IMF) set a global growth rate of 3.7 per cent between 2018 and 2019, 0.2 per cent below its April forecast. The IMF also expects the US and China to grow by 2.9 per cent and 6.6 per cent this year and 2.5 per cent and 6.2 per cent respectively in 2019.
Similarly, economic growth in the euro zone has slowed-the final value of manufacturing PMI in the euro zone fell to 51.8 in November, the lowest since August 2016. Germany's third-quarter GDP shrank for the first time since 2015, falling 0.2 per cent from a month earlier and up 1.1 per cent from a year earlier, the lowest since 2014. The UK is in slightly better shape, with GDP expanding to 1.5 per cent in the third quarter of this year, but still at its lowest level since 2013, and pulling away from Europe like a sharp blade hanging over the heads of Britons. A little carelessness could lead to economic turmoil; France's "yellow vest" resistance movement is in full swing, causing at least $1.1 billion in losses to France. The French finance minister said it could lower France's GDP by 0.1% in the fourth quarter, compared with a current GDP growth rate of only 1.4%. In a word, every family has its own difficult sutras, and no one has fewer problems than anyone else.
China's economic situation will continue to come under pressure next year, and without a clear point of growth, I am afraid it will have to rely on traditional industries such as infrastructure and real estate to maintain growth of about 6 per cent. Under the downward pressure of the economy, everyone's life will certainly be more difficult, and the pressure on the survival of enterprises will also be relatively great. At present, there are mainly the following economic difficulties at home and abroad:
Foreign countries: Sino-US trade frictions; the slippage of the world economy; the crackdown and sanctions imposed by the United States and its allies on Chinese enterprises.
Domestic: real estate bubble, financial deleveraging, financing difficulties of private enterprises, employment problems, high leverage of residents, inflation, environmental protection and so on.
The problems are interrelated, inextricably intertwined and intertwined. The emergence of a trade war between China and the United States has its inevitability. the United States moves middle-end and lower-end industries out of the United States through industrial transfer and occupies middle-and high-end high value-added industries. This is the result of the division of labor in the global industrial chain, and it is also the inevitable choice to enhance productivity. In addition, the dominance of the US dollar has led other countries to regard the US dollar as the primary foreign exchange reserve, and these US dollars have returned to the United States by buying treasury bonds for Americans to spend ahead of time, thus giving birth to the largest single consumer market of 40 trillion yuan in the United States. It is through this established dollar model that Americans enjoy a good life. China and the United States are already dependent on lips and teeth. It is good for you to take my goods and I will take your US dollar bills, but Trump hopes to reverse the long-term trade deficit and achieve his goal in a way that harms others and harms himself, so that the US trade deficit will widen again. The Republican Party lost the hearts and minds of the people, which in turn lost the House of Representatives. On the other hand, Trump's election marks the rise of the far right and is the inevitable result of the development of history: the people want to see a president who does not play by common sense bring some new stimulus to the American economy. Because the old model of the United States has aroused the collective dissatisfaction of the middle and lower classes.
The problem of domestic consumption is now more serious. One is the change in the expectations of the real estate market, so that the seller's market gradually into the buyer's market, now should worry not how the house price rises, but how the house price falls. On the current specific situation of the property market can refer to the SMM previous article "Gold nine silver ten dissipated house prices do not rise can fall is a big question!" "according to the latest data, nearly 70% of second-hand housing prices in key cities fell, as of November, the average price of second-hand housing in Baicheng has fallen for three months in a row. It can be said that the whole expectation has been reversed, when the rising myth of real estate is no longer, we see more housing without a market, transaction volume hit a new low one after another, real estate agents desolate to no one to ask for news and so on. Whether the country will relax the regulation and control of the property market, experts have different opinions. In my opinion, there are indeed two days of ice and fire in the property market. Rich people buy villas and luxury houses all over the world, and there are many people who have emptied their wallets to buy houses. The government should loosen its grip next year to avoid a sharp fall in property prices, not to allow prices to rise again. Before the Internet spread that the market value of Chinese real estate has exceeded the sum of Europe, the United States and Japan, if the news is true, then the bubble is huge, then the rise in house prices is undoubtedly drinking poison to quench thirst.
The other is car consumption. According to data from the Federation of Rivers, retail sales of broad passenger cars in China in November were 2.05 million units, down 18 percent from a year earlier, and fell for the sixth month in a row, with a 13.2 percent drop in October. It may be the first annual decline in sales in China's passenger car market in at least two decades, an iconic indicator of the arrival of a bottleneck in the car market. The collective mute fire in China's RV market has to be frightening, which once again shows that the high savings rate of Chinese residents has become a thing of the past, and the high leverage ratio of the Chinese residents sector has affected the two largest consumer markets in the country. The downturn in the consumer market will eventually reflect the upstream manufacturers, and the problem of overcapacity in the two RV cities will also materialize.
The state of China's economy this year is extremely complex. On the one hand, financial deleveraging and strong supervision have made it difficult for enterprises to raise funds; on the other hand, environmental protection has upgraded, polluting enterprises have limited or stopped production, and on the other hand, the property market has been heavily regulated, and the high cash flow policy of housing enterprises has failed. Superimposed on the trade war between China and the United States, the survival of enterprises can be said to be under great pressure. China's transformation and upgrading can not be achieved overnight, will be a slow process, in this period, I am afraid that the downward pressure on the economy will become the norm. The cost of opening wider to the outside world and speeding up transformation and upgrading is that GDP is out of control. Maintaining GDP will prolong the transition period and continue to rely on investment to a certain extent. The government may prefer the latter, give priority to stability, and trade time for space.
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