What Crises Are Facing China'S Economy Now?

< p > < strong > 1, < a href= > //www.sjfzxm.com/news/ > local debt > /a > crisis > /strong > /p >

< p > in the third quarter monetary policy implementation report issued by the central bank recently, the central bank analyzed the problems of real estate and local government debt in the analysis of China's current economic situation, and thought that the two areas were "more prominent".

Local debt risk is regarded as one of the biggest challenges facing China's future development.

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< p > in October this year, Standard Chartered Bank issued a report that the scale of local government debt in China could reach 21.9 to 24 trillion and 400 billion yuan, or 38% to 42% of GDP, nearly two times the official current estimate.

In addition to the alarming amount of debt and the possibility of its continued growth, Jia Kang, director of the Fiscal Science Research Institute of the Ministry of finance, pointed out that the greatest risk of local debt lies in its opacity.

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< p > "how big is the scale of the local government debt? Who is spending money? How much is it? What is the flower? What is not to be spent? These problems are not compatible with the past, we must make clear, otherwise China's economy will not be able to take the next step."

Xie Guozhong, an independent economist, said.

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< p > strong > two, < a href= "//www.sjfzxm.com/news/" > Bank < /a > bad debts worries /strong < /p >

< p > 2013 China Daily reported that the balance of non-performing loans of 16 listed banks amounted to 440 billion yuan, which increased by nearly 40 billion yuan compared with the end of 2012.

Without exception, the balance of non-performing loans has risen in all 16 banks.

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< p > another media report said that the write offs of bad debts in China's largest banks increased by two times.

Data showed that China's major banks, including ICBC (601398, stock bar), had written off bad debts of 22 billion 100 million yuan in the first six months of 2013, compared with 7 billion 650 million yuan in the same period last year.

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< p > perhaps we have seen the bad debt risk of the Bank of China (601988, stock bar) after the financial crisis, and more and more foreign institutions began to sell stocks of Chinese banks.

Since 2013, Goldman Sachs has emptied its holdings of ICBC shares, and Spain's foreign bank has reduced CITIC Bank (601998, stock bar).

Analysts believe that this shows that foreign institutions no longer regard Chinese banks as high-quality assets.

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< p > the pressure of bad debts of Chinese banks is likely to grow in the future. When capital is eroded, refinancing will become one of the standard actions of banks.

This year, Ping An, China Merchants Bank and Everbright have thrown out plans for refinancing. At present, the market is affordable.

But when more banks join refinancing, no one can imagine what kind of reaction the market will have.

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< p > strong > three, place < a href= "//www.sjfzxm.com/news/" > Finance < /a > problem < /strong > /p >

< p > first, as we all know, land pfer income is the main source of local government's extra budgetary revenue.

If land pfer income falls, local governments that have been very dependent on land revenue and bear high debts may face liquidity and repayment problems.

These problems are likely to be shown as bad loans by banks, so the two major crises of local debt and bad debts of banks have formed a vicious circle.

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< p > on the other hand, fiscal pparency, local government corruption and overstaffing have been problems faced by the central reform.

Local debt is only a part of fiscal reform. Local finance should also promote the optimal allocation of market resources fairly.

But in the communique, there is no reference to "matching expenditure responsibility and financial power", so there are still many uncertainties in this aspect.

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< p > < strong > four, overcapacity < /strong > < /p >

< p > at the 2013 summer forum of NetEase economists annual conference, a survey of 100 economists showed that half of economists believe that the biggest problem of China's economy is overcapacity.

Li Yizhong, the Standing Committee of the CPPCC National Committee, deputy director of the Economic Committee and former Minister of the Ministry of industry and commerce, said at the meeting that the serious overcapacity and insufficient demand in some industries are the main reasons for the economic downturn.

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< p > research shows that steel industry, electrolytic aluminum, cement, flat glass, shipbuilding five industries have varying degrees of overcapacity.

According to Qiu Xiaohua, chief economist of Minsheng securities, China's overcapacity is precisely brought about by the reform of the market economy. Therefore, it should also be resolved through the pformation of the government. The government should also actively create demand to solve the problem of overcapacity.

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< p > strong > five, unemployment crisis < /strong > /p >

< p > unemployment crisis is not unique to China, but a global problem.

In France, on November 12, 2013, leaders from several European countries gathered in Paris to convene another meeting aimed at the frequent unemployment of young people in Europe.

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< p > the International Labour Organization report shows that the global youth unemployment rate has increased by 11.5% since the recession in 2007, and this figure will continue to rise in the next five years.

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< p > although the Chinese government has realized the seriousness of the problem, it has begun to take a series of reform measures.

But eliminating surplus and backward production capacity will bring great pressure to China's employment market, and more and more young people will feel the throes of economic pformation in the job market.

In this period of economic pformation, many overcapacity industries will be rectified, and more enterprises will be scaled down and even laid off.

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