The cold winter in the steel market has not only frozen steel mills and steel traders, but also cooled the confidence and enthusiasm of people in the industry. Before the end of the year, did the steel market really "pinched"? Is this year's "Story of Winter" really just a legend? The steel market can create a miracle? The author's warming from the policy outlook has briefly analyzed the steel market years ago.
Policy warming The European Central Bank announced a rate cut of 25 basis points on Thursday, cutting core interest rates from 1.25% to 1%, which is the second time the bank cut interest rates. The ECB’s two interest rate cuts are equivalent to erasing all the two interest rate hikes in the first half of the year and returning to the previous loose state, so the increasing global liquidity expectations are becoming a reality. In China, economic data released on the 9th showed that both the CPI and the PPI declined more than expected by previous experts and institutions. In view of the easing of global monetary policy, rising domestic economic downturn, and eased inflationary pressures, it is expected that both China’s monetary and fiscal policies will “step on the acceleratorâ€. In particular, monetary policy may be reduced in recent months. Therefore, the overall policy aspect should be warming, but a relatively clear direction policy has not yet been introduced.
Although it is certain that policy easing may not favor the steel market and downstream demand, the policy liberalization will at least be able to boost the steel market, especially to increase market confidence. In short, the improvement of the entire environment, even if the steel market can not directly benefit, will be more or less "benefit."
The fundamentals are hard to improve The author believes that if the steel market wants to create a miracle, the good news is that the policy is still not enough. In order to “break the ice,†fundamentals need to be improved, and it is expected that the fundamentals will not be greatly improved in the short term.
First of all, steel mills do not lose production. In October, more than one-third of domestic large steel companies suffered losses. However, according to the author's understanding, the death of a steel plant does not reduce production. China Iron and Steel Association estimates that the national crude steel production per day in late November was 1.6852 million tons, which was a month-on-month increase of 1.29%. The recovery of crude steel production and the ups and downs of steel mills will inevitably lead to inventory pressure.
Second, steel traders only fail to make progress. At present, at least 80% of the country's steel traders are in a loss state. Not only does the "Winter Storage" willingness drop to a low point, but traders are also under pressure from funds and lose money to sell their goods. Steel trading companies prefer to have low stocks or zero inventory for winters, rather than risking “continuing losses and sales†next year. In this way, steel mills do not cut their output, and traders lose money to sell goods. Under the influence of deeper winters, weak demand and pessimistic attitudes of businesses, it may mean that steel prices may fall again.
Again, it is a foregone conclusion that the demand is not going. At the close of the year, the steel market entered the traditional off-season. Due to the weather, construction of the construction site slowed down in most parts of the northern part of the country. Most of the projects entered the final stage, and the new construction started to gradually reduce. The downstream demand will be lighter and demand will gradually shrink.
Finally, the financial pressure is obvious. 2011 is destined to be a rather tragic year for the steel market, and it is a tangled year. In the first half of the year, the central bank continued to raise the rate of deposits and the impact of raising interest rates. Steel traders faced pressure on funds to face rare tensions. Although the financial pressure has eased in the second half of the year, it will not be able to solve the “hungry thirsty†of the steel market. Due to the pressure of repayment at the end of the year, traders had to choose to continue shipping in large quantities, and vicious competition in prices is inevitable. At the same time, financial pressure is also an important factor for many steel traders to abandon their winter storage.
On the whole, although the policy is expected to warm up, it is difficult for the fundamentals of the steel market to be weak. The demand seems to be getting more and more bearish. In the past, the demand for winter storage by traders was bound to be greatly reduced this year, and it is unlikely that steel mills will reduce their production.
Most merchants believe that due to the uncertainties in the market outlook, businesses nowadays generally hold the attitude of being able to come out, seize the current sales opportunities. Before the end of the year, it was very difficult for the steel market to create a miracle.
The increasingly fierce debt crisis in Europe and the United States has caused worries about a more serious recession in the world economy. Once again, the global “recovery of the market†will become the most important factor affecting the future steel and raw material markets. Due to the lack of Other effective means, the proliferation of liquidity after the “bailout†has the potential to push steel and raw materials prices to new highs. This is the necessary cost and cost to avoid falling into the economic crisis. China needs to deal with it properly.
First, a more serious recession ** once again triggered a global "rescue"
At present, the “two-debt crisisâ€, especially the European debt crisis, has intensified, making the risk of more serious recession in the world economy increasing. This is mainly reflected in two aspects:
The first is the danger that some countries are not on debt. Such as Greece, Spain, Italy and other countries. They have too much debt, far beyond the ability to repay, must continue to borrow more new debt to repay old debt, and pay high interest rates. Because the debt rating of the above countries has been continuously lowered, it is more difficult for them to follow the loan, and "hard debt default" is only a matter of time. If these countries do not have any debt, their risk spillover will inevitably lead to a major impact on the financial system of the euro zone and the world financial system. Its worst situation will be the disintegration of the euro zone, including the euro as "wastepaper", which must be a major disaster for the world economy.
The second is the danger of over-consumption. Some countries, although they theoretically do not have debts, such as the United States, and Others, although fiscal deficits and debt balances have not yet reached the most dangerous levels, such as the United Kingdom and France, the common denominator is to tighten expenditures. Increase revenue. Consumers and government tighten the purse together, which leads to a serious suppression of spending power. Consumption is the engine of economic growth. Excessive tightening of consumption will also cause economic growth to lose momentum.
The most terrifying thing is that in the future, the world economy faces the possibility of the above-mentioned two dangers coming together, and the multiplier effect multiplier. If left unchecked, the vicious circle that emerges in front of people may be even worse than a more serious economic downturn - the unprecedented economic depression and a global society.
Although this worst situation has not yet occurred, it does not necessarily happen, but its panic expectations are real and govern the actual behavior of producers and investors. This is why, for a period of time, domestic and foreign capital markets and commodity markets have shrouded in gloomy conditions and prices have been depressed; some countries, including developed countries, have continued to demonstrate important factors. To this end, international authoritative organizations have frequently issued warnings that the risk of a global recession will increase again. In 2012, it will be a crucial year for the world economy to continue its slow growth or fall back into recession. The worse results have not arrived yet, and the situation is very grim. It also believes that the existing economic policies and stimulus measures in some countries do not adequately address the downside risks to the economy. Call for further stimulus measures from all countries in the world.
In order to avoid this catastrophe, the countries of the world must join forces to "save the market." Even if it pays a high cost for this, it will be even more costly. The recent Federal Reserve Bank and other major Western countries’ central banks have taken joint actions to reduce the commercial bank’s interest rate on U.S. dollar borrowing. This shows that determination.
Second, the Chinese economy can not be left alone The current global economic situation is grim, if a serious recession really occurs, China certainly can not alone. In addition to the world economic recession that will seriously impact China's export trade, it is also because the domestic demand trend is not satisfactory. The newly announced China PMI and non-manufacturing index have already entered the 50-plus-severe line; at the same time, due to the very poor real estate sales in more than one year, and the deep drop in residential prices, it will lead to In the future, the construction volume will shrink drastically, and the Chinese construction industry will also suffer a heavy blow.
In the four major industries in China: manufacturing, construction, service and export industries are not optimistic about the trend, if the decision-making departments continue to adhere to the tightening policy, China's economic "hard landing" situation will be difficult to avoid, that is, economic growth After falling below 7%, the capital market has slumped, businesses have closed down, and unemployment has increased. This is not sensational. Therefore, although China's economic growth rate is still enviable at this stage, it must not be taken lightly. It needs to adopt forward-looking stimulus measures to prevent economic growth from becoming "a drastic change."
Third, start printing presses to become the global "rescue" the main means The global "collective market rescue road map" should be the right medicine, to eliminate the above two major risks that cause the world economy more serious recession.
It is imperative to solve the problem that some countries do not have debt. For example, Greece, Italy, and other countries, to avoid the emergence of hard debt default, the risk of spread to the core countries, especially to prevent the collapse of the euro zone.
The second is to avoid excessive and excessive consumption crunch. Although Western countries’ high welfare policies cannot be sustained and require reforms, their adjustment needs a long period of time and cannot be accomplished overnight. In other words, increasing revenue and reducing expenditures cannot overly impact normal consumption. Otherwise, it will not only cause strong national enthusiasm, social turmoil, and economic growth will lose its stable foundation; but also because some countries will have too many debts. Even if all the income is used to repay debt, it will take several years, but economic growth cannot wait until Years later.
Only by resolving these two issues can we avoid a more serious recession in the world economy, even an unprecedented Great Depression. Under the existing conditions, the final solution to these problems is that there is no other effective means other than starting the printing press and continuing to print money. On the one hand, banknote printing can solve the problem of some European and American countries returning old debts with new debts, avoiding defaulting on hard debts, and delaying other core countries, leading to the collapse of the entire system. On the other hand, it is also possible to obtain payment means to reduce the degree of tightening of expenditures and to protect consumer spending necessary for economic growth, including both government expenditure and personal expenses.
Of course, to solve the problem of some countries’ sovereign debt crisis and solve the problem of liquidity shortage in some financial institutions, it is also possible to solve the issue of loans to fiscal surplus countries and transnational corporations by issuing more bonds. However, the problem is that these countries have huge fiscal deficits and debt balances. The outlook for national debt is negative and there is a lack of investment protection. Affected by this, emerging economies and transnational corporations are also unwilling to invest in bonds. The Fed also said that it would not be able to help the euro zone’s debt problems. This is the main reason why none of the G20 summits promised to directly fund European financial stability institutions. Therefore, the resolution of the European debt crisis ultimately depends on Europe itself, mainly because the European Central Bank purchases bonds to resolve.
Unlike the euro zone countries, the Fed can rely on the US dollar hegemony that still exists and use the Fed to purchase the national bond to start the printing press to solve the capital problem. And this is the plan that the U.S. government is most willing to implement.
It can thus be seen that the settlement of the debt crisis in Europe and the United States, in addition to relying on the central bank to purchase government bonds, continues to inject liquidity into the market, there is no other way out to choose. Based on this forecast, the Fed will not only launch QE3, but will even launch QE4 and QE5 until the economy re-enters growth and the unemployment rate reaches a reasonable level. The European Central Bank’s purchase of European bonds will also become the final solution to European countries’ debt problems.
Although this will be met with many criticisms and opposition. For example, the core countries of the euro zone, Germany and the United Kingdom, have opposed the use of the European Central Bank as a final solution, and they even oppose the European bonds themselves. The Fed also has different views on the new quantitative easing monetary policy. However, in the face of the collapse of the euro zone, the more severe economic recession of the United States, and the global depression, the ultimate goal is to "take the two evils away," and compromise.
Fourth, the banknote printing results continue to push up the price of steel and its raw materials The world's major economies have started printing machines together. Of course, a lot of liquidity has entered the market, which dilutes material wealth and pushes up commodity prices.
In the medium and long term, global commodity prices continue to operate at a high level. Trends in the international market such as oil, metals, and ore continue to fluctuate upward and successively exceed previous highs. For example, oil prices will exceed US$150/barrel and iron ore prices will reach 200 US dollars / ton. We are on the eve of severe global inflation.
Fifth, how should China respond?
How to deal with the complicated and changing market situation in the future?
1. Expand domestic demand and prevent the worst possible situation. Regardless of how the debt crisis in Europe and the United States is resolved, China will experience an external operating environment that is deteriorating, and it may also be subject to the unexpectedly declining impact of the domestic customs industry—manufacturing and construction industry. It is expected that in the first half of 2012, China’s internal and external demand, especially It is the situation of foreign trade exports that is more severe. To this end, a series of measures must be taken to increase domestic demand and prevent the worst possible economic situation.
Efforts to expand domestic demand and respond to the deteriorating export situation have left much room for China. One of the important aspects is to vigorously strengthen the construction of environmental protection and provide a better space for people's livelihood and economic growth. For a long time, we have put too much emphasis on production and construction. We have not paid enough attention to environmental protection and left behind huge historical debts. In this case, the urban and rural residents are very unsatisfied and the international review is also very bad. To meet this most demanding demand, invest tens of trillions of dollars in environmental protection construction, gradually make China's air, land, and water resources quality reach the world's advanced level, and at the same time create a strong environmental protection equipment industry, providing millions, and Thousands of jobs. It should be regarded as a new growth point for the Chinese economy.
2. Raise the tolerance for rising prices, and adhere to the primary goal of maintaining growth. It can now be clearly seen that the biggest culprit in the world is not inflation, but a more serious recession, even an unprecedented Great Depression. "The two evils are lighter than others," and growth has become a global consensus. Moreover, the current rise in China’s price level is more of an increase in structural costs caused by economic imbalances, and it has a long-term upward trend. It is by no means our unilateral tightening of demand can solve the problem, but it will lead to more and more serious problems. Therefore, it is imperative to proceed from reality and increase the tolerance for price increases in China over a period of time. We must return the primary goal of macroeconomic regulation and control to “guarantee growth†and at the same time take into account the problem of excessive price increases.
It should be pointed out that at present, only monetary policy is fine-tuned, and the intensity is not enough. It is difficult to disperse the panic of haze and reverse the lack of confidence between producers and operators and investors. Therefore, there is a need to increase policy easing. Such as further reducing the deposit reserve ratio, lowering the ** interest rate, encouraging first-home suites and improving the demand for housing, large-scale construction of environmental protection and so on.
3. With good reserves, do everything possible to get more resources. The era of the future is still an era of "resources are king". It is an era in which resources cannot be copied and banknotes can be printed in large quantities. In the international market, the commodity prices of iron ore, metals and other commodities have declined in the short-term and cannot change the trend of long-term price increases. This is also why the U.S. government has to rely on strong military strength to bear huge consumption and even sacrificing the cost of bleeding. It also has to gain access to oil resources and control the transportation channel. In this case, we must not talk about the inflection point of the iron ore market. We wish to bet on the so-called Feng Shui rotation. Therefore, relevant Chinese departments and iron and steel enterprises must formulate a long-term strategy for the global resource distribution. To use the existing $3 trillion in errands, we must do everything possible to go out and buy as many bulk commodities as possible, including resource rights and resource products. This is also an important way to realize the diversification, materialization, capitalization, and equity of China’s ** reserves and avoid serious loss of value.
Policy warming The European Central Bank announced a rate cut of 25 basis points on Thursday, cutting core interest rates from 1.25% to 1%, which is the second time the bank cut interest rates. The ECB’s two interest rate cuts are equivalent to erasing all the two interest rate hikes in the first half of the year and returning to the previous loose state, so the increasing global liquidity expectations are becoming a reality. In China, economic data released on the 9th showed that both the CPI and the PPI declined more than expected by previous experts and institutions. In view of the easing of global monetary policy, rising domestic economic downturn, and eased inflationary pressures, it is expected that both China’s monetary and fiscal policies will “step on the acceleratorâ€. In particular, monetary policy may be reduced in recent months. Therefore, the overall policy aspect should be warming, but a relatively clear direction policy has not yet been introduced.
Although it is certain that policy easing may not favor the steel market and downstream demand, the policy liberalization will at least be able to boost the steel market, especially to increase market confidence. In short, the improvement of the entire environment, even if the steel market can not directly benefit, will be more or less "benefit."
The fundamentals are hard to improve The author believes that if the steel market wants to create a miracle, the good news is that the policy is still not enough. In order to “break the ice,†fundamentals need to be improved, and it is expected that the fundamentals will not be greatly improved in the short term.
First of all, steel mills do not lose production. In October, more than one-third of domestic large steel companies suffered losses. However, according to the author's understanding, the death of a steel plant does not reduce production. China Iron and Steel Association estimates that the national crude steel production per day in late November was 1.6852 million tons, which was a month-on-month increase of 1.29%. The recovery of crude steel production and the ups and downs of steel mills will inevitably lead to inventory pressure.
Second, steel traders only fail to make progress. At present, at least 80% of the country's steel traders are in a loss state. Not only does the "Winter Storage" willingness drop to a low point, but traders are also under pressure from funds and lose money to sell their goods. Steel trading companies prefer to have low stocks or zero inventory for winters, rather than risking “continuing losses and sales†next year. In this way, steel mills do not cut their output, and traders lose money to sell goods. Under the influence of deeper winters, weak demand and pessimistic attitudes of businesses, it may mean that steel prices may fall again.
Again, it is a foregone conclusion that the demand is not going. At the close of the year, the steel market entered the traditional off-season. Due to the weather, construction of the construction site slowed down in most parts of the northern part of the country. Most of the projects entered the final stage, and the new construction started to gradually reduce. The downstream demand will be lighter and demand will gradually shrink.
Finally, the financial pressure is obvious. 2011 is destined to be a rather tragic year for the steel market, and it is a tangled year. In the first half of the year, the central bank continued to raise the rate of deposits and the impact of raising interest rates. Steel traders faced pressure on funds to face rare tensions. Although the financial pressure has eased in the second half of the year, it will not be able to solve the “hungry thirsty†of the steel market. Due to the pressure of repayment at the end of the year, traders had to choose to continue shipping in large quantities, and vicious competition in prices is inevitable. At the same time, financial pressure is also an important factor for many steel traders to abandon their winter storage.
On the whole, although the policy is expected to warm up, it is difficult for the fundamentals of the steel market to be weak. The demand seems to be getting more and more bearish. In the past, the demand for winter storage by traders was bound to be greatly reduced this year, and it is unlikely that steel mills will reduce their production.
Most merchants believe that due to the uncertainties in the market outlook, businesses nowadays generally hold the attitude of being able to come out, seize the current sales opportunities. Before the end of the year, it was very difficult for the steel market to create a miracle.
The increasingly fierce debt crisis in Europe and the United States has caused worries about a more serious recession in the world economy. Once again, the global “recovery of the market†will become the most important factor affecting the future steel and raw material markets. Due to the lack of Other effective means, the proliferation of liquidity after the “bailout†has the potential to push steel and raw materials prices to new highs. This is the necessary cost and cost to avoid falling into the economic crisis. China needs to deal with it properly.
First, a more serious recession ** once again triggered a global "rescue"
At present, the “two-debt crisisâ€, especially the European debt crisis, has intensified, making the risk of more serious recession in the world economy increasing. This is mainly reflected in two aspects:
The first is the danger that some countries are not on debt. Such as Greece, Spain, Italy and other countries. They have too much debt, far beyond the ability to repay, must continue to borrow more new debt to repay old debt, and pay high interest rates. Because the debt rating of the above countries has been continuously lowered, it is more difficult for them to follow the loan, and "hard debt default" is only a matter of time. If these countries do not have any debt, their risk spillover will inevitably lead to a major impact on the financial system of the euro zone and the world financial system. Its worst situation will be the disintegration of the euro zone, including the euro as "wastepaper", which must be a major disaster for the world economy.
The second is the danger of over-consumption. Some countries, although they theoretically do not have debts, such as the United States, and Others, although fiscal deficits and debt balances have not yet reached the most dangerous levels, such as the United Kingdom and France, the common denominator is to tighten expenditures. Increase revenue. Consumers and government tighten the purse together, which leads to a serious suppression of spending power. Consumption is the engine of economic growth. Excessive tightening of consumption will also cause economic growth to lose momentum.
The most terrifying thing is that in the future, the world economy faces the possibility of the above-mentioned two dangers coming together, and the multiplier effect multiplier. If left unchecked, the vicious circle that emerges in front of people may be even worse than a more serious economic downturn - the unprecedented economic depression and a global society.
Although this worst situation has not yet occurred, it does not necessarily happen, but its panic expectations are real and govern the actual behavior of producers and investors. This is why, for a period of time, domestic and foreign capital markets and commodity markets have shrouded in gloomy conditions and prices have been depressed; some countries, including developed countries, have continued to demonstrate important factors. To this end, international authoritative organizations have frequently issued warnings that the risk of a global recession will increase again. In 2012, it will be a crucial year for the world economy to continue its slow growth or fall back into recession. The worse results have not arrived yet, and the situation is very grim. It also believes that the existing economic policies and stimulus measures in some countries do not adequately address the downside risks to the economy. Call for further stimulus measures from all countries in the world.
In order to avoid this catastrophe, the countries of the world must join forces to "save the market." Even if it pays a high cost for this, it will be even more costly. The recent Federal Reserve Bank and other major Western countries’ central banks have taken joint actions to reduce the commercial bank’s interest rate on U.S. dollar borrowing. This shows that determination.
Second, the Chinese economy can not be left alone The current global economic situation is grim, if a serious recession really occurs, China certainly can not alone. In addition to the world economic recession that will seriously impact China's export trade, it is also because the domestic demand trend is not satisfactory. The newly announced China PMI and non-manufacturing index have already entered the 50-plus-severe line; at the same time, due to the very poor real estate sales in more than one year, and the deep drop in residential prices, it will lead to In the future, the construction volume will shrink drastically, and the Chinese construction industry will also suffer a heavy blow.
In the four major industries in China: manufacturing, construction, service and export industries are not optimistic about the trend, if the decision-making departments continue to adhere to the tightening policy, China's economic "hard landing" situation will be difficult to avoid, that is, economic growth After falling below 7%, the capital market has slumped, businesses have closed down, and unemployment has increased. This is not sensational. Therefore, although China's economic growth rate is still enviable at this stage, it must not be taken lightly. It needs to adopt forward-looking stimulus measures to prevent economic growth from becoming "a drastic change."
Third, start printing presses to become the global "rescue" the main means The global "collective market rescue road map" should be the right medicine, to eliminate the above two major risks that cause the world economy more serious recession.
It is imperative to solve the problem that some countries do not have debt. For example, Greece, Italy, and other countries, to avoid the emergence of hard debt default, the risk of spread to the core countries, especially to prevent the collapse of the euro zone.
The second is to avoid excessive and excessive consumption crunch. Although Western countries’ high welfare policies cannot be sustained and require reforms, their adjustment needs a long period of time and cannot be accomplished overnight. In other words, increasing revenue and reducing expenditures cannot overly impact normal consumption. Otherwise, it will not only cause strong national enthusiasm, social turmoil, and economic growth will lose its stable foundation; but also because some countries will have too many debts. Even if all the income is used to repay debt, it will take several years, but economic growth cannot wait until Years later.
Only by resolving these two issues can we avoid a more serious recession in the world economy, even an unprecedented Great Depression. Under the existing conditions, the final solution to these problems is that there is no other effective means other than starting the printing press and continuing to print money. On the one hand, banknote printing can solve the problem of some European and American countries returning old debts with new debts, avoiding defaulting on hard debts, and delaying other core countries, leading to the collapse of the entire system. On the other hand, it is also possible to obtain payment means to reduce the degree of tightening of expenditures and to protect consumer spending necessary for economic growth, including both government expenditure and personal expenses.
Of course, to solve the problem of some countries’ sovereign debt crisis and solve the problem of liquidity shortage in some financial institutions, it is also possible to solve the issue of loans to fiscal surplus countries and transnational corporations by issuing more bonds. However, the problem is that these countries have huge fiscal deficits and debt balances. The outlook for national debt is negative and there is a lack of investment protection. Affected by this, emerging economies and transnational corporations are also unwilling to invest in bonds. The Fed also said that it would not be able to help the euro zone’s debt problems. This is the main reason why none of the G20 summits promised to directly fund European financial stability institutions. Therefore, the resolution of the European debt crisis ultimately depends on Europe itself, mainly because the European Central Bank purchases bonds to resolve.
Unlike the euro zone countries, the Fed can rely on the US dollar hegemony that still exists and use the Fed to purchase the national bond to start the printing press to solve the capital problem. And this is the plan that the U.S. government is most willing to implement.
It can thus be seen that the settlement of the debt crisis in Europe and the United States, in addition to relying on the central bank to purchase government bonds, continues to inject liquidity into the market, there is no other way out to choose. Based on this forecast, the Fed will not only launch QE3, but will even launch QE4 and QE5 until the economy re-enters growth and the unemployment rate reaches a reasonable level. The European Central Bank’s purchase of European bonds will also become the final solution to European countries’ debt problems.
Although this will be met with many criticisms and opposition. For example, the core countries of the euro zone, Germany and the United Kingdom, have opposed the use of the European Central Bank as a final solution, and they even oppose the European bonds themselves. The Fed also has different views on the new quantitative easing monetary policy. However, in the face of the collapse of the euro zone, the more severe economic recession of the United States, and the global depression, the ultimate goal is to "take the two evils away," and compromise.
Fourth, the banknote printing results continue to push up the price of steel and its raw materials The world's major economies have started printing machines together. Of course, a lot of liquidity has entered the market, which dilutes material wealth and pushes up commodity prices.
In the medium and long term, global commodity prices continue to operate at a high level. Trends in the international market such as oil, metals, and ore continue to fluctuate upward and successively exceed previous highs. For example, oil prices will exceed US$150/barrel and iron ore prices will reach 200 US dollars / ton. We are on the eve of severe global inflation.
Fifth, how should China respond?
How to deal with the complicated and changing market situation in the future?
1. Expand domestic demand and prevent the worst possible situation. Regardless of how the debt crisis in Europe and the United States is resolved, China will experience an external operating environment that is deteriorating, and it may also be subject to the unexpectedly declining impact of the domestic customs industry—manufacturing and construction industry. It is expected that in the first half of 2012, China’s internal and external demand, especially It is the situation of foreign trade exports that is more severe. To this end, a series of measures must be taken to increase domestic demand and prevent the worst possible economic situation.
Efforts to expand domestic demand and respond to the deteriorating export situation have left much room for China. One of the important aspects is to vigorously strengthen the construction of environmental protection and provide a better space for people's livelihood and economic growth. For a long time, we have put too much emphasis on production and construction. We have not paid enough attention to environmental protection and left behind huge historical debts. In this case, the urban and rural residents are very unsatisfied and the international review is also very bad. To meet this most demanding demand, invest tens of trillions of dollars in environmental protection construction, gradually make China's air, land, and water resources quality reach the world's advanced level, and at the same time create a strong environmental protection equipment industry, providing millions, and Thousands of jobs. It should be regarded as a new growth point for the Chinese economy.
2. Raise the tolerance for rising prices, and adhere to the primary goal of maintaining growth. It can now be clearly seen that the biggest culprit in the world is not inflation, but a more serious recession, even an unprecedented Great Depression. "The two evils are lighter than others," and growth has become a global consensus. Moreover, the current rise in China’s price level is more of an increase in structural costs caused by economic imbalances, and it has a long-term upward trend. It is by no means our unilateral tightening of demand can solve the problem, but it will lead to more and more serious problems. Therefore, it is imperative to proceed from reality and increase the tolerance for price increases in China over a period of time. We must return the primary goal of macroeconomic regulation and control to “guarantee growth†and at the same time take into account the problem of excessive price increases.
It should be pointed out that at present, only monetary policy is fine-tuned, and the intensity is not enough. It is difficult to disperse the panic of haze and reverse the lack of confidence between producers and operators and investors. Therefore, there is a need to increase policy easing. Such as further reducing the deposit reserve ratio, lowering the ** interest rate, encouraging first-home suites and improving the demand for housing, large-scale construction of environmental protection and so on.
3. With good reserves, do everything possible to get more resources. The era of the future is still an era of "resources are king". It is an era in which resources cannot be copied and banknotes can be printed in large quantities. In the international market, the commodity prices of iron ore, metals and other commodities have declined in the short-term and cannot change the trend of long-term price increases. This is also why the U.S. government has to rely on strong military strength to bear huge consumption and even sacrificing the cost of bleeding. It also has to gain access to oil resources and control the transportation channel. In this case, we must not talk about the inflection point of the iron ore market. We wish to bet on the so-called Feng Shui rotation. Therefore, relevant Chinese departments and iron and steel enterprises must formulate a long-term strategy for the global resource distribution. To use the existing $3 trillion in errands, we must do everything possible to go out and buy as many bulk commodities as possible, including resource rights and resource products. This is also an important way to realize the diversification, materialization, capitalization, and equity of China’s ** reserves and avoid serious loss of value.
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