The economy is in recession: China drinks poison to quench thirst, and America drinks Coke happily? | Blog Post

Two weeks ago, Premier Li Keqiang once once more launched a new round of economic stimulus plans to increase investment in infrastructure. The Western media is obviously not optimistic that China will once once more use counter-cyclical means different from the West to solve the sluggish problem.

Affected by the epidemic, China’s economy is under downward pressure. AP picture

Premier Li Keqiang held an executive meeting of the State Council on August 24, and Taiwan’s Commonwealth Magazine comprehensively reported: “The introduction of 19 policies to maintain economic stability, emphasizing the need to “strengthen the foundation of economic recovery and development, without flooding and overdrafting the future” Under the premise, increase the quota of policy development financial instruments of more than 300 billion yuan (the same below); make good use of the special bond balance limit of more than 500 billion yuan; for power shortage and drought relief, support central power generation enterprises to issue 200 billion yuan dollar bonds.”

Where will the above 1 trillion yuan be used? China’s Ministry of Finance revealed that “the focus will be on transportation infrastructure, energy, agriculture, forestry and water conservancy, ecological and environmental protection, social undertakings, urban and rural fresh-keeping transportation and other logistics infrastructure, municipal and industrial park infrastructure, major national strategic projects, affordable housing projects, and new energy projects and new infrastructure projects.”

The BBC reported that there is another key point: “China will use the national policy bank to inject capital into unfinished real estate to complete the delivery.” So the article came: “(2008) China launched a 4 trillion yuan economic stimulus plan At the end of 2008, the National Development and Reform Commission suddenly approved the subway planning of 28 cities, with an investment of more than 1 trillion yuan. Yuan. In fact, 45% of the “four trillion” was invested in roads, railways, airports and urban and rural power grids.

However, in the eyes of Western observers, China’s push for infrastructure is drinking poison to quench its thirst. “While promoting economic recovery, this stimulus plan has also had far-reaching adverse effects, pushing up debt risks and blowing up real estate bubbles.” This is the premise that Premier Li Keqiang specifically mentioned this time: “No flooding, no overdraft in the future.” The commentary said that the increased economic stimulus plan this time “is mainly aimed at infrastructure investment in industrial upgrading and economic transformation. It reflects the cautiousness of the central country in saving the market.

There is also an argument in the West that is not optimistic regarding China’s rescue of the market, the BBC said, “Since August, Omicron has put more cities into lockdown. As of September 2, a total of 33 cities were still partially or completely closed due to the epidemic (China). The government calls it static management or silent management). Among them, Chengdu, an important economic city in the west, has become another city with a population of 20 million that has been closed and controlled following Shanghai.”

However, the BBC does not deny it: “China’s epidemic prevention measures are strict, and the supply chain has shown strong stability during the epidemic. Let orders return to China, which has fully resumed work.” Data shows that in the second half of 2020, China’s export growth far exceeded It is expected that China’s foreign trade will increase once more in 2021, with annual exports of 21.73 trillion yuan, an increase of more than 21%. Three years following the trade war and two years following the outbreak of the new crown epidemic, China’s global trade scale has instead reached a historical peak.

The above achievements are enough to become the “China model” that is admired. However, the West believes that China will turn around in 2022, and it is regarding pulling down masks all over the world, including European and Southeast Asian countries, to achieve “prosperity with the virus”. If this is the case, China’s manufacturing industry will increase Parts have flowed out of other regions, such as returning to the United States, to India and Vietnam.

It is worth noting that before the economic conference in Beijing, Li Keqiang went to Shenzhen to inspect the technology industry from August 16 to 17. During this period, he made a special trip to Lianhuashan Park to pay homage to the bronze statue of Deng Xiaoping and presented flower baskets. The core of the Chinese model is that “science and technology are the primary productive forces”, and we will use innovation and technology as the driving force of the economy.

It was also in 2008 that everyone released water to save the market. The method of the United States was controversial. The United States printed a lot of money. Looking back today, very few actually went to real enterprises to serve the manufacturing industry, and most of the money was left in the capital market, including real estate. Market, commodity market, stock market and bond market, among which the stock market is the most obvious, so the US stock market has experienced a long-term bull market for 10 years.

You say that China is drinking poison to quench its thirst, what regarding the United States, the United States leads the world to drink Coke happily, right?

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