The impact of the US subprime mortgage crisis on Guangdong's economy and its countermeasures
Liang Guiquan, president and researcher of Guangdong Academy of Social Sciences; Meggie Yu, deputy director and researcher of Institute of Modernization, Guangdong Academy of Social Sciences; You Aiqiong, Director of Personnel Department of Guangdong Academy of Social Sciences, is a researcher.
Abstract: The impact of American subprime mortgage crisis on Guangdong is both short-term and long-term. There are both positive and negative. In the face of the crisis, Guangdong should not respond passively, but must profoundly analyze and dialectically grasp risks and opportunities, and look for business opportunities in the crisis and opportunities in the challenge. Therefore, Guangdong should have two countermeasures: first, it should strategically deal with the negative impact and risk loss brought to Guangdong by the American subprime mortgage crisis, prepare for risk prevention, and reduce and resolve risks; Second, strategically take advantage of the transitional opportunities in the world economic development cycle, strengthen internal capabilities and compete for external potential, strive for new advantages in the next cycle, push Guangdong's development to a new level in an all-round way, and open the way for China's economic development in the next cycle.
Keywords: Countermeasures for the Impact of American Subprime Mortgage Crisis in Guangdong
The American Subprime Mortgage Crisis, which originated in 27, and the global economic and financial turmoil it caused are a foregone conclusion, and the trend and results are still unpredictable. Resolve the crisis, ensure stability, seize the opportunity and seek a leap. Guangdong should not only pay attention to the American subprime mortgage crisis and its uncertain trend and outcome, but also pay attention to the deep information and significance conveyed by the incident itself. It is the latter that becomes the starting point of our strategic decision. At present, many scholars and decision makers at home and abroad pay more attention to the event itself, especially the risks and losses that this event may bring; Now, we especially need to get rid of the habitual thinking path, emancipate our minds, look high and far, face the world and the future, seize the opportunity, form a brand-new strategic judgment and realize comprehensive strategic innovation.
The impact of American subprime mortgage crisis on Guangdong
The impact of American subprime mortgage crisis on Guangdong is both short-term and long-term; There are both positive and negative. More importantly, all changes are opportunities, which depend on our judgment of changes and our ability to use them. It is necessary to dialectically analyze the impact of American subprime mortgage crisis on Guangdong.
(1) positive effects
The positive effects of the subprime mortgage crisis on Guangdong mainly give a profound warning to Guangdong's economic development model, and also provide a good opportunity for Guangdong's development model innovation.
1. Objectively promote the optimization and upgrading of Guangdong's products and industrial structure
The current changes in the terms of foreign trade are not only a severe test for Guangdong, but also an important opportunity to optimize its structure and change its development mode. Guangdong should use this crisis to reevaluate the strategy of "earning foreign exchange through export". At present, the impact of the US subprime mortgage crisis on Guangdong mainly focuses on the low-end export products with rigid cost and price. This reveals that Guangdong's industries are mostly in the high-risk range of the global industrial chain, and reveals the limitations of Guangdong's economic structure that relies too much on the international market. The warning message from the subprime mortgage crisis can promote Guangdong to reflect on its current development model and path. Guangdong's export product structure has been improved after several years' adjustment and transformation. According to the statistics bureau and the Foreign Trade and Economic Cooperation Department, in 27, the export of high-tech products in Guangdong accounted for 32.79% of the total export value, up 59.1% year-on-year. From January to May 28, the export growth of high-tech products in Guangdong decreased, but it still increased by 25.1%. It can be seen that Guangdong's export products are not bleak under the impact of the subprime mortgage crisis, and the impact of subprime mortgage has tested the actual effect and direction of Guangdong's product adjustment from the opposite side.
2. Promote the adjustment of the regional structure of Guangdong's export products
The risk prevention principle of avoiding all eggs in one basket is reflected in the diversification of trading partners in international trade. The subprime mortgage crisis objectively warned of the concentration risk of trading partners and asymmetric import and export structure. From the perspective of regional adjustment of export products, the decline of Guangdong's exports to the United States under the influence of the subprime mortgage crisis has promoted the growth of exports to other regions. The regional structure of Guangdong's exports from January to June 28 is as follows: exports to the EU and ASEAN increased by 26.8% and 26.4% respectively; Exports to Africa and Latin America increased by 23.4% and 19.8% respectively, while exports to South Korea increased by 63.8%. Exports to India increased by 13.3% year-on-year. A gratifying phenomenon in the adjustment is that some labor-intensive industries and products have also grown through export regional transfer. For example, from January to May 28, Guangdong furniture exports to the United States decreased by 14.5% year-on-year, but exports to ASEAN doubled compared with the same period of last year, so the export of the whole industry increased by 24.6% year-on-year.
3. The situation of excessive trade surplus has been improved, which has achieved certain results in curbing false trade.
Since 24, the false trade components in China's import and export trade have been increasing, mainly in the import and export of miscellaneous goods, machinery and transportation equipment, textiles, rubber, mining and metallurgy products and their products, resulting in an extraordinary explosive growth in the trade surplus of these three categories of products. As the region with the largest export and surplus, Guangdong's problems in this regard are also very prominent. The subprime mortgage crisis and the adjustment of China's export policy have a certain effect on filtering false trade, which can help to make our export composition and trade surplus true and standardized. From January to June, 28, Guangdong's foreign trade surplus was US$ 51.154 billion, a year-on-year decrease of 46.2 percentage points.
In addition, there is another problem worthy of our further consideration. For a long time, Guangdong's industrialization strategy of relying on the secondary industry to maintain rapid economic growth has been blocked by the shortage of resources and soaring costs and prices. Since the second half of 27, the prices of agricultural and non-agricultural raw materials in Guangdong have risen sharply, and the horns of the factory price and the factory price of enterprises have been increasing. According to the survey data of Guangdong Branch of the National Investigation Corps, from January to June 28, the "scissors difference" between the purchase price index of raw materials, fuel and power and the ex-factory price index of industrial products is also expanding month by month. The subprime mortgage crisis has warned us: How can Guangdong adjust its industrial development strategy to adapt to the new development pattern and new conditions and environment?
(II) Negative Effects
The negative impact of the subprime mortgage crisis on Guangdong's economy is mainly reflected in the following aspects: demand contraction, order reduction, credit increase, price fluctuation, abnormal capital flow, declining corporate profit and investment motivation, and damage to overseas investment caused by the US economic slowdown, broken credit chain and fluctuation of exchange rate and interest rate. According to the analysis data of Guangdong's economic development in 28 by the Provincial Bureau of Statistics, the province's GDP increased by 1.7%, with a year-on-year decrease of 3.6 percentage points. The growth rates of the three major industries and the three major incomes all declined, the growth rate of fixed assets investment slowed down, and the losses of industrial enterprises ranked among the top in the country.
1. Impact on exports
The impact of the subprime mortgage crisis on Guangdong's exports is mainly reflected in the year-on-year decline in exports to the United States, the decline in the growth rate of total exports and the decline in the growth rate of trade surplus, which leads to a decline in the pulling force of exports on GDP, with the greatest impact on traditional labor-intensive commodities such as clothing and plastic products.
objectively speaking, there are many reasons for the sharp decline of Guangdong's export products. The subprime mortgage crisis in the United States is only one of the direct factors, and the influencing factors include national macro-policy regulation, rising costs, etc. These comprehensive factors work together to cause the production and export of labor-intensive traditional manufacturing and processing industries with rigid cost and price to get into trouble. However, mechanical and electrical products and high-tech products with economies of scale and scientific and technological content still have good competitiveness.
2. The price impact under the change of exchange rate and interest rate
The capital inflow and outflow of the United States account for one third and one fifth of the global total respectively. At the same time, global resource-based commodities are still priced in US dollars, and the pricing power of global commodity futures prices is mainly controlled by investment banks in developed countries. Therefore, the changes of its capital flow and the fluctuation of US dollar exchange rate directly affect the changes of asset market prices and resource prices. In particular, due to the further inversion of interest rates between China and the United States after the interest rate cut in the United States, the inflow of hot money, the increase of foreign exchange reserves and the expected weakening of the US dollar, since the second half of 27, the appreciation rate of RMB against the US dollar has obviously accelerated, and it broke through seven for the first time on April 1, 28. Since the exchange rate reform, the nominal exchange rate of RMB has appreciated by 18.5%. On the one hand, the depreciation of the dollar reduces the profit margin of export enterprises; On the other hand, the expected depreciation of the US dollar has caused international hot money to take oil and precious metals as a refuge for capital preservation and appreciation, which has led to a sharp rise in the prices of international commodities (such as oil and other mineral resources).
The rising prices of resource factors have increased the cost pressure of Guangdong's economic development, which is heavily dependent on the import of primary products. The profit margin of enterprises has further narrowed, the number of loss-making enterprises has increased, and the profit growth rate of enterprises has decreased year-on-year. From January to May, 28, the profit growth rate of industrial enterprises above designated size in Guangdong dropped by 44.8 percentage points year-on-year, and more than a quarter of enterprises suffered losses in different degrees. There were 11,6 loss-making enterprises in the province, and the loss growth rate increased by 25. percentage points year-on-year. It is expected that the loss-making enterprises will further increase in the second half of 28. Among the loss-making enterprises, there are many small and medium-sized labor-intensive enterprises. Judging from the current situation, it is difficult for some cost-sensitive SMEs to cope with high interest rates and high costs, and the situation of enterprises moving out and closing down will be further aggravated.
3. Other economic impacts
The subprime mortgage crisis will further lead to the break of the credit chain of export enterprises, the loss of overseas investment and the decline of investment motivation of enterprises. The first is the loss of export default. Since 27, the birthplace of the subprime mortgage crisis has become the hardest hit area for overseas commercial accounts. According to the estimation of the bad debt rate of the Ministry of Commerce, the total export of Guangdong in 27 was US$ 369.245 billion, and it is conservatively estimated that the bad debt amount is about US$ 12 billion to US$ 18 billion. At present, the penetration rate of export credit insurance to Guangdong's exports is only 1%, so it is difficult to effectively count the data of losses caused by the closure of overseas enterprises in Guangdong due to the subprime mortgage crisis. Second, the investment motivation and investment profit decline. With the financial crisis gradually infiltrating into the real economy, the global economy has entered a downward channel, leading to a decline in investment momentum. Statistics from Guangdong Provincial Bureau of Statistics show that from January to June 28, the investment in fixed assets of the whole society was 454.672 billion yuan, a year-on-year decrease of 1.2 percentage points. Among them, industrial investment only increased by 8.8% year-on-year, down by 4.7 percentage points.
In addition, the subprime mortgage crisis has also affected overseas investment in Guangdong, including overseas investment by domestic financial institutions (commercial banks, fund companies, insurance companies, etc.) and enterprises. Since August 27, with the deepening of the subprime mortgage crisis, the overseas investment performance of China enterprises has declined rapidly.
(III) Judgment on the further impact
How much impact the subprime mortgage crisis will have on China and Guangdong in the next step, and whether the negative effects have reached the bottom, depends on three factors: First, the time and depth of the impact of the subprime mortgage crisis on the United States, which is the most basic variable; Second, the depth of the impact of the subprime mortgage crisis on the international economy and international market; Third, the radioactive effect of the subprime mortgage crisis and Guangdong's tolerance.
how much impact will the subprime mortgage crisis have on the American economy, and will the United States fall into a cycle of economic stagnation? There are different opinions on this at present. The key factors are whether the US real estate market price can stabilize and whether the subprime mortgage risk can be controlled from the source. Judging from various comprehensive factors, it is unlikely that the American economy will decline sharply in the short term, but it may enter an adjustment period of slow decline. According to estimates, for every 1% decrease in the economic growth rate of the United States, China's exports to the United States will decrease by 5%~6%. Therefore, it can be predicted that the pressure of Guangdong's export growth decline will further increase in the second half of 28 or even in the first half of 29.
2 Guangdong's countermeasures to deal with the global economic and financial crisis
Challenges and opportunities are like two sides of a copper plate, which always go hand in hand. Any change is an opportunity, and the challenge is a test of the ability to respond to change. The key is how to deal with it. Especially as the province with the highest degree of opening to the outside world in China, Guangdong should not respond passively. It must profoundly analyze and dialectically grasp risks and opportunities, and look for business opportunities in the crisis and opportunities in the challenge. Therefore, Guangdong should have two countermeasures: first, it should strategically deal with the negative impact and risk loss brought to Guangdong by the American subprime mortgage crisis. Prepare for risk prevention, reduce and resolve risks. Second, strategically take advantage of the transitional opportunities in the world economic development cycle, strengthen internal capabilities and compete for external potential, strive for new advantages in the next cycle, push Guangdong's development to a new level in an all-round way, and open the way for China's economic development in the next cycle.
(1) Short-term strategic countermeasures: actively prevent and resolve the risky impact of the US subprime mortgage crisis on Guangdong's economy and society
At present, Guangdong's economic development is in a turning period of industrial structure adjustment, growth mode transformation and growth momentum transformation, and it is facing a series of contradictions and pressures. At this juncture, it encountered the subprime mortgage crisis in the United States and the external oscillation caused by the slowdown of world economic growth and the decline of international market demand, as well as the prominent impact of the intensive introduction of national macro-adjustment policies. To this end, Guangdong must take the initiative to take a series of strategic countermeasures to prevent and resolve possible risks.
1. Pay close attention to the latest situation of global economic and financial development, strengthen follow-up research and take timely countermeasures
Relevant departments, especially foreign trade management departments, should always pay attention to the latest situation of global financial crisis development, as well as the economic trend of the United States and even the world and its impact on China's economy, and keep abreast of relevant dynamic information. At the same time, to further investigate the subprime mortgage crisis and its impact on Guangdong, Guangdong should not only actively deal with the outside world, but also interact with the central government in time in order to obtain a more favorable macro-policy environment to deal with the crisis. In response to the unpredictable and uncertain international and domestic economic development situation, Guangdong needs to have advanced research and forecast and comprehensive dynamic macro-supporting policies, especially to strengthen the foresight of policies.
2. Timely introduction of emergency measures, combination of enterprise self-help and government policy support
Although the main body of market selection and development is enterprises, appropriate government policy support and perfect services can greatly enhance the market development ability of enterprises, especially their ability to cope with crisis. Facing the credit risk and exchange rate risk brought by the subprime mortgage crisis to enterprises, firstly, enterprises themselves must take flexible measures to seek self-help, and secondly, the government should timely introduce supporting emergency measures to maintain the stable development of export-oriented economy.
3. Highly guard against a new round of trade protectionism that may be triggered by the subprime mortgage crisis
At present, international trade protectionism is getting worse and trade frictions are becoming more and more complicated. Developed countries and regions such as the United States, Europe and Japan frequently use new trade protection means such as technical barriers, intellectual property rights, environmental protection standards and labor standards; Developing countries began to file more cases against China. By the end of 27, Guangdong * * * had encountered 125 trade protection cases in 15 countries, involving a total amount of more than 5 billion US dollars, showing a rapid growth in the number of cases and the cases involved. In 28, under the background that the world economic environment is more complicated and the American economy is in turmoil and recession, global trade may continue to decline, triggering a new trend of trade protectionism and leading to an increase in trade frictions. Facing the new trend of international trade protectionism with new standards, new rules and new means, Guangdong needs to speed up the improvement of its coping capacity.
we should actively cooperate with the implementation of the national win-win strategy and guide enterprises to actively and effectively adapt to international trade rules. Strengthen the self-discipline of enterprises and industries, and pay more attention to the cooperation of enterprises.