The above views seem to give people the impression that the economic cycles of China and the United States are out of sync. The American economy has crossed the high point and started to decline; China's economy has not yet faced an inflection point. If so, it will be a great blessing for the world economy. /kloc-from the second half of the 0/9th century to the First World War, a key factor for the smooth operation of the world economy under the gold standard was that the British economic cycle at that time was out of sync with most parts of the world (such as colonies). When the British economy was depressed, the Bank of England lowered interest rates, which promoted the export of British capital and stimulated investment in other parts of the world. In the process of British economic prosperity, the production capacity formed by investment in other parts of the world just met the import demand of Britain. In this way, the world economy will complement each other and slow down economic fluctuations. However, with the deepening of economic globalization, the economic cycles of various countries tend to be more consistent. If the economic development of China and the United States is cyclical, it is more likely to be synchronous. At present, the different performances are mainly related to the different pace of interest rate hikes in the two countries and the impact of the subprime mortgage crisis on the United States.
Judging from the GDP growth rate, China's current economic cycle began in 2002. The revised GDP growth rate in 2000 and 0 1 year was 8.4% and 8.3% respectively, but it reached 9. 1% in 2002 and rose to 10.0% in 2003. After that, GDP basically maintained double-digit growth (only 9.9% in 2005). However, due to the bursting of the Internet bubble, the economic growth rate of American economy in 0 1 year dropped from 4. 1% in the previous year to 1%, but it rose to 2.4% in 2002, 3.0% in 2003 and 4.4% in 2004. It can be seen that China and the United States are basically synchronized at the starting point of this economic cycle.
Look at the rhythm of raising interest rates between the two countries. On June 30th, 2004, the United States raised interest rates for the first time, from 1% to 1.25%. Then in August and September, 2005, 165438+ 10, 65438+February, February, March, May, June, August and September, 165438+ 10. On the other hand, in China, the interest rate was raised for the first time on1October 29th, 2004, and the one-year deposit rate as the policy interest rate of China was raised from 1.98% to 2.25%. However, nothing happened in the next two years. It was not until August 19, 2006 that the interest rate was raised by 27 basis points to 2.52% (in April, 2006, the loan interest rate was raised by 27 basis points and the deposit interest rate remained unchanged). Two months before this, the Federal Reserve has completed this round of interest rate hikes. After entering 2007, with the sustained "fast" economy and rising CPI, the central bank stepped up interest rate hikes and raised the one-year deposit interest rate six times. Even so, the current one-year deposit interest rate is only 4. 14%, which is still too low compared with the CPI increase of more than 8%.
We assume that the RMB will raise interest rates as rhythmically as the US dollar after it starts to raise interest rates, and it will eventually increase to around 8% in 2007 (according to China's economic growth rate, the policy interest rate of around 8% is not high). In this way, there will be no problems of overheating and inflation at present. With the US economy declining due to the subprime mortgage crisis, if China's economy also shows a downward trend, it can follow the Federal Reserve to cut interest rates and boost the economy. This is the counter-cyclical operation of macro-control, cutting peaks and filling valleys to avoid economic ups and downs.
Some people may retort that if China raises interest rates like the United States, hot money will flood into Chinese mainland, increasing the pressure of RMB appreciation. This is one of the most important reasons against raising interest rates in previous years, but this is untenable. First of all, China still strictly controls the capital account, and the cost of hot money is high. Even if the deposit interest rate of RMB is three percentage points higher than that of US dollar, it will never lead to the influx of hot money into China's commercial banks to take advantage of the spread. Hot money is more likely to enter China's housing and stock markets, which are mainly supported by low interest rates, to make huge profits. Therefore, in fact, the low interest rate is the chief culprit leading to the crazy influx of hot money. Secondly, China's low interest rate policy has not actually stopped the pace of RMB appreciation. At present, the RMB has exceeded the integer mark of 7 against the US dollar, resulting in heavy losses in foreign exchange reserves denominated in RMB. The trouble is that we still don't know where the appreciation limit of RMB is under the interference of disguised inflow of hot money (a large amount of hot money flows in the form of trade surplus). However, one thing is clear, that is, the low interest rate policy adopted to prevent RMB appreciation has led to overheating of the domestic economy, skyrocketing asset prices and intensified inflation.
The American economy began to decline, which was "attributed" to the outbreak of the subprime mortgage crisis to some extent. So, is China's economy also facing an inflection point? If you face an inflection point, will the economy automatically cool down without tightening finance? If it weren't for the increasing inflation, no one could assert that China's economy has reached the peak of this economic growth cycle. The decline in economic growth does not necessarily mean the emergence of deflation. Because the level of economic growth rate is measured by constant value, that is, the actual growth rate. The rise of inflation means that although the nominal growth rate can remain high, the real growth rate will decline after deducting the inflation rate. Japan is a good example. Due to the flood of liquidity in the early stage and the impact of the oil crisis, Japan experienced its first post-war negative economic growth (-1.2%) in 1974. In fact, the nominal economic growth rate reached 19.3% that year, only because the inflation rate exceeded 1.2 percentage points. Therefore, whether we introduce austerity policies or not, with the increase of inflation rate, economic growth will inevitably decline. However, the damage caused by serious inflation to the national economy will be long-term and huge. Therefore, in order to avoid stagflation caused by serious inflation and the decline of economic growth rate, we should take a clear-cut stand against inflation and curb inflation by shrinking liquidity, regardless of whether the current economy is facing an inflection point.