Reform rather than relief for China

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This is a message from economists, including in High Dear Beijing UniversitySchool of Management of Guanggua. Academics in leading schools of Beijing often share recommendations with politicians.

The point is not that the constant fall in prices should not be noticed, but that they signal the need for more serious changes-how China is preparing its “15-year plan”. This is the national basis of social and economic development from 2026 to 2030. This year, China completes its 14th plan and is expected to disclose details over the next five years in the next months.

“When we talk about the 15th five-year plan, the key question is how to grow performance,” said Liu Tsao, Guanguu School Dean and Finance Professor last week.

It refers to the “overall productivity of the factor”, the measure of increasing the productivity of the economy from technology, innovation, savings from scale or policy, without adding more work and capital.

According to the International Monetary Fund, Total growth TFP in China In the 2000s, it decreased from 4.1% to 2.6% in the 2010s and entered the state of decline in 2006. Liu believes that the Chinese TFP should grow by at least 2% or more.

To this end, Tech innovation is an important part of the future five -year plan, Liu said. But he added that the institutional reform is just as important.

The capture of the Communist Party of the Chinese state and its institutions, for example, has a greater impact on the economy than in the US.

“80% of the general performance of the Chinese factor comes from institutional reform,” said economist Zhou Tianiong in judgment In the Journal of Chinese Business Navin Caixin, which translated CNBC. Zhou is a former vice -president of the International Strategy Strategy Institute, China’s Higher Education Central Education for Party training leaders.

Zhou noted that determining the technology textbook as a way of improving productivity is not necessarily applied in China, where in certain areas limited interests of business and consumers. “Without the reform of the economic system there will be no medium and speed growth.”

All this may seem quite academic to discuss the average markets, more oriented to deflation, industrial excess and overflow into trade tensions. But in China, public discussions are limited. In a country where leaders work, building a consensus behind closed doors, policy signals are largely coming from key phrases in state documents and high -level speeches.

On July 1, Chinese President Xi Jinping headed a meeting with a high -level financial and economic commission, which called for improving the understanding of government officials about how their results are evaluated According to state media.

“Ordinary estimates (officials) Impossible to focus only on how much GDP has grown And the number of major projects, but also how much debt is borrowed, “SI said at the next high-level meeting this month, which was focused on urban development.

According to Goldman Sachs, the current system for evaluating the results of state officials has also unintentional contributed to the problems with China’s capacity when industries produce more goods than the market, according to Goldman Sachs.

Local authorities stimulate the revenue, even when manufacturers lose money within the current production tax system, said China Hui Shan Goldman Sachs Hui Shan.

“Solving the capacity of exceeding power requires another stimulation structure to assess and promote local officials,” she added.

“None of these major adjustments will be simple and fast for implementation.”

As China’s economic growth has slowed down in the last few years, Beijing emphasized the need for “quality” development. But the country still still does a great deal with its annual GDP purpose, which is 5%this year.

Going forward, China is likely to signal about a smaller goal of about 4.5% to 5%, Luangua Liu said. But in his opinion, it is more important that local authorities can focus more on consumption rather than investments that contributed to excess problems.

Chinese authorities have strengthened plans for further employment support and improve social well -being. But politicians have still avoided mass cash materials that the US and Hong Kong gave residents stimulated the costs after the pandemic.

In a crowded month for politicians, the party members must also hold a meeting at the Politburo to discuss the economy by the end of the month. But analysts have no great expectations.

From the first half of the year in the books, the scale of the incentive has already been set up, and politicians are now paying attention to the next five years, said the Len’s Zong, a former Chinese bank.

He expects politicians to prioritize consumption compared to investments and tilt the balance to business interests, noting that the state has played a greater role over the past five years.

But he warned that Beijing would remain cautious about the risks that could arise from relaxation too much control.

Old habits can die hard.

China goes after excessive discounts. Last week, Prime Minister Lee Ten called for more The normative control over the electric car Pricing war. Later the market regulator said on Friday that met with ELEME JD.com, Meituan and Alibaba, and called them to them to compete rationally.

The US-Kita Trading Trucpery is set for extension. US Treasury Minister Scott Igent said he would most likely be extending the future President’s Future Term Donald Trump with China when he met with his Chinese colleagues in Stockholm next week.

Economic uncertainty remains. China has kept its Lending indicators stable On Monday, when the country continues to fight weak consumer moods and soften growth. But the wealthy in the country feel Just as bad about the economy As they did during the pandemic, according to the consulting firm Oliver Wiman.

Mainland and Hong Kong action rose on Wednesday amid wide growth in the region after US President Donald Trump announced that he had completed a “large -scale transaction” with Japan, which installed Tariffs by 15% According to the country’s export to the US

Morale Hang the Index . The Hang Seng Tech Index, which tracks the largest technology companies listed in Hong Kong, increased by 2.14%. The mainland landmarks have increased about 4.7%today, LSEG data showed.