[The Epoch Times, May 20, 2022]A day ago, Shanghai announced thatsocial cleanupYes, but the announcement was quickly ridiculed because the reality is that many of the 25 million inhabitants are still under lockdown. However, there is indeed a real “zero”, that is, the car sales in Shanghai in April. In addition, the latest data show thatChina’s economyThe decline continued, with multiple indicators turning negative in April and the unemployment rate hitting a record high. Not only consumption is getting weaker, but real estate is dying. The Central Bank of China has also recently lowered the lower limit of mortgage interest rates. So, can this boost real estate sales? In the face of the deteriorating economic situation, why has the CCP not taken effective measures? Let’s talk about that today.
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what is”social cleanup“When will Shanghai lift the lockdown?
On May 17, Zhao Dandan, deputy director of the Shanghai Municipal Health Bureau, announced that all 16 districts in Shanghai have achieved social zero. Next, the normal production and living order will be gradually restored in three stages. However, the announcement was made. In fact, on the 16th, Shanghai still added 77 local confirmed cases and 746 local asymptomatic infections.
Some people may wonder, isn’t it all cleared, why are there so many infected people? In fact, what the CCP refers to as “social zeroing” means that no matter how many new cases are diagnosed, as long as these new cases are already under quarantine, not among the general population, this is called “social distancing”. The face is cleared.”
Everyone should have known for a long time that Omicron is difficult to “clear”, not to mention that medical experts understand it, even the common people in Shanghai understand this truth now. For example, there was a recent video on the Internet of an old aunt in Shanghai who was warned by the police for forwarding sensitive information. The aunt asked the police angrily: Do you believe in “dynamic clearing”? do you have a brain? Under the leadership of the Chinese Communist Party, have the rats been wiped out? In other words, from the point of view of ordinary people, those who can believe in “zeroing” are all mindless.
Moreover, we have seen that recently, even WHO Director-General Tan Desai “Secretary Tan”, who is particularly “pro-Communist”, has rarely publicly stated that China’s “zero” epidemic prevention policy is unsustainable. Of course, the CCP authorities are still resolutely stating that “zeroing” is unshakable, and that “we must fight all words and deeds that distort, doubt, and deny China’s anti-epidemic policy.”
In fact, the CCP’s “clearing” policy not only has no scientific basis, nor is it intended to protect the safety of people’s lives. It is only a superficial excuse, but the real purpose is to ensure that no The situation that the epidemic is out of control, of course, has a deeper purpose to ensure the political stability of the CCP. However, the real problem is that if it can’t be “cleared”, Shanghai will never be able to lift the blockade. By then, the virus will not die, and the economy will definitely die first. How can the people survive?
However, although the virus cannot be “cleared”, the data “cleared” can be controlled at any time. Therefore, as early as May 13, Shanghai refined the evaluation criteria for “social zero” and “basically zero social”. Specifically, it is: taking the administrative region as a unit, if the number of new daily increases for three consecutive days accounts for the proportion of the total population in the district, which is less than 1/100,000, then it can be considered that the “basic social cleanliness” has been achieved. “zero”; if the number of new additions in a single day is zero for 3 consecutive days, it can be considered that “social zero” has been achieved.
In other words, according to this definition, even if there are infected people in the society, as long as the proportion is small enough, it can be regarded as “zero”. Therefore, the CCP has already had a way to justify its own words. Because of changing the term, it can be “invincible”, or even “win without a fight”.
In any case, the good news is that Shanghai has announced that it has been cleared, and there seems to be hope for the unblocking. However, a netizen said that Shanghai has resumed work, what does it have to do with the people of Shanghai? The reality is that not only has he not unblocked, but none of the people around him have unblocked. It is no wonder that a large number of netizens demanded that “Shanghai Publishing”, the official Weibo account of the Shanghai Municipal Government Information Office, be classified as a fraudulent account.
Another netizen put it most clearly, he said, aboutShanghai unblocks, “Shanghai releases” and “news reports” do not count. The Chinese know best what the right of interpretation is, and where this right is, there is authority. After these days of “prison service”, people in Shanghai understand that the right to interpret the unblocking rests with the neighborhood committee and the property.
Well, we can understand that the release in Shanghai is for the outside world, and the release by the neighborhood committee is for the people of Shanghai.
If we read the news carefully, we can notice that what the Shanghai government said: From June 1 to the middle and late June, under the premise of strictly preventing the rebound of the epidemic and controllable risks, the normal state of epidemic prevention and control will be fully implemented. management.
From this point of view, Shanghai may not be able to lift the blockade in June. It just enters the so-called normalized management, and it must be under the two premise that “the epidemic will not rebound” and “risks are controllable”. It can only be said that the CCP has always been good at playing word games, because it is always ready to overthrow or change its policies.
Shanghai auto sales “cleared” China’s many indicators negative growth in April
So, how is the recent economy of Shanghai, which is suffering from “zeroing”? As you can see, although the virus has not really been “cleared”, car sales have really been “cleared”. According to data released by the Shanghai Automobile Sales Association on the 16th, Shanghai’s auto sales in April were zero, the first in history. However, in 2021 and the first quarter of this year, Shanghai’s new car sales will still rank first in China.
However, Shanghai is only a microcosm of the whole of China. Data from the Chinese Communist Party’s Bureau of Statistics shows that China has a number of economic data that turned negative in April. For example, in April, China’s industrial added value above designated size increased by 5.0% year-on-year in March to a decline of 2.9%; the national service industry production index also fell by 6.1% year-on-year in April.
Not to mention consumption. After the total retail sales of consumer goods turned to a year-on-year decline in March, the decline accelerated in April, and the year-on-year decline expanded from 3.5% to 11.1%. Among them, the year-on-year decline in merchandise retail revenue expanded from 2.1% in March to 9.7% in April; catering revenue fell from 16.4% in March to 22.7% in April.
At the same time, unemployment has risen sharply. China’s urban surveyed unemployment rate climbed to 6.1 percent in April, the highest level since March 2020 and surpassing the official target of 5.5 percent for the second month in a row. In addition, the surveyed unemployment rate of the 16-24-year-old population rose to 18.2%, and the surveyed urban unemployment rate in 31 major cities rose to 6.7%, both setting a record high since historical data began.
In addition, data from the Central Bank of the Communist Party of China shows that in April 2022, China’s social financing scale increased by 910.2 billion yuan, a sharp decrease of 946.8 billion yuan compared with the same period of the previous year. Among them, household loans decreased by 217 billion yuan, a decrease of 745.3 billion yuan year-on-year, indicating that the financing needs of the household sector have contracted significantly.
China Business News reported that new yuan loans in April hit a record low since 2010. At the same time, the medium and long-term loans to the residential sector experienced negative growth again after February, and the medium and long-term loans to the corporate sector also increased from a year-on-year increase to a small increase.
The increment of social financing scale reflects the amount of funds obtained by the real economy from the financial system within a certain period of time. It can be seen that the accelerated decline of social financing in April occurred in the context of continued monetary easing, that is, there is no shortage of money in the market, but companies are reluctant to borrow money, which shows that companies lack confidence in the future.
In addition, it is the big infrastructure that the CCP strongly promotes. Although the infrastructure investment also slowed down in April, it still performed well. Just to stimulate economic growth, infrastructure investment alone is obviously not enough. Therefore, many economists have recently mentioned the importance of stimulating consumption, and suggested that money should be used to subsidize ordinary people. However, judging from the attitude of the top leaders of the CCP, it is difficult for the CCP to give money to the people.
For example, at the April 25 meeting of the Communist Party of China’s State Council on Clean Governance, Li Keqiang not only opposed relying on large infrastructure projects to boost the economy, but also disapproved of directly giving money to residents to boost consumption. He believes that China is still a developing country, which is difficult to achieve and unsustainable to do.
In addition, on May 15, Xi Jinping also mentioned in an article published in the magazine “Seeking Truth” that Gao Welfare has raised a group of “lazy people”, and China does not do this.
However, as we all know, the CCP just refuses to support the Chinese. When it spreads money around the world, it is very generous. In fact, the CCP is still raising the Chinese.
Real estate is dying, but the CCP cannot “prescribe the right medicine”
So, apart from infrastructure and consumption, what else can the CCP rely on to stimulate the economy? Only real estate remains.
real estate pairChina’s economyIt’s so important. As we mentioned just now, RMB loans in April decreased by RMB 823.1 billion year-on-year; among them, residential housing loans increased by RMB 402.2 billion year-on-year, accounting for nearly half.
However, China’s current real estate industry is already dying. The Wall Street Journal calculated based on CCP statistics that in April, the area of new housing construction in China fell by 44% year-on-year, and residential sales fell by 47% year-on-year. A drop of 0.11% also marked the first year-on-year decline for the indicator since November 2015.
On May 15, the Central Bank of the Communist Party of China and the China Banking and Insurance Regulatory Commission issued a notice to adjust the lower limit of the commercial loan interest rate for the first home to no less than 20 basis points from the loan market quoted rate (LPR) of the corresponding term; the lower limit of the commercial loan interest rate policy for the second home, Follow current regulations.
What does that mean? According to the market quotation rate of 4.6% for loans with a maturity of more than 5 years released on April 20, the lower limit of the loan interest rate for the first home will be lowered to 4.4%, and the lower limit of the loan interest rate for the second home is still 4.6%.
It sounds heavy, but, first of all, this new policy is only applicable to potential home buyers, and home buyers who have already taken out loans cannot enjoy it. Secondly, this notice does not mean that everyone’s mortgage interest rate will be reduced to 4.4%, because each bank has to decide how to implement it, usually on the basis of LPR, plus a few basis points.
According to the calculation of the Securities Times, based on the loan amount of 500,000 yuan, the term of 30 years, and the equal principal and interest repayment, the interest rate is reduced by 20 basis points, and the interest expense can be reduced by about 20,000 yuan in the next 30 years. That is to say, even if various banks cut mortgage interest rates by 20 basis points, the mortgage savings for first-time homebuyers would be meager, and the stimulating effect on residential sales can be imagined.
In fact, in addition to the central bank’s measures, various localities have also introduced rescue measures one after another. According to incomplete statistics from mainland media, since May, at least 40 cities have introduced policies to stabilize the property market, including lowering down payments, increasing the amount of provident fund loans, and granting housing subsidies. In addition, data from the Central Plains Real Estate Research Institute shows that since 2022, nearly 130 cities have issued new policies to stabilize the property market.
However, it can be seen that so far, real estate sales in various parts of China are still sluggish. What is the reason? That is, the CCP’s market rescue measures cannot “prescribe the right medicine”.
At present, the reasons for the lack of transactions in the property market are, first of all, the economic downturn and shrinking employment, which have led to a decrease in people’s income, or fear of future income instability. To the unfinished building; third, the fall in house prices itself has also intensified the wait-and-see mood of home buyers.
Moreover, the CCP’s bailout policies are all aimed at the needs of potential home buyers, but they have not provided any assistance measures for home buyers who have fallen into debt distress. This kind of foreshadowing will obviously also hit the confidence of potential home buyers. Therefore, the current policy of the CCP cannot fundamentally play a role in saving the housing market.
In fact, on the one hand, the CCP insists on “dynamic clearing”, on the other hand, it wants to achieve economic growth, which itself is struggling with itself. Moreover, many economists, including the International Monetary Fund, have suggested that the CCP should use more fiscal expenditure to subsidize low-income families, or improve the social security system to promote the growth of consumption. be accepted.
The key point is that the biggest challenge for China’s economy is the lack of market confidence, which leads to companies not wanting to lend and residents not wanting to consume. The real weak link is the demand side, but the CCP’s economic measures are almost always on the supply side. How can it have any effect?
Institute of Financial and Commercial Economics
Planning: Yu Wenming
Written by: Li Songyun
Editor: Wei Ran, Yu Wenming
Edit: Song
Producer: Li Songyun
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Editor in charge: Lian Shuhua
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