How to treat the decline of private investment growth?

First, the public opinion reaction of the current decline in the growth rate of private investment.

Since 20 16, the rapid decline of private investment has attracted the attention of all parties. 20 16 years 10-5 months, private fixed assets investment10/638.4 billion yuan, a nominal increase of 3.9% year-on-year, and the growth rate dropped by 1.3 percentage points compared with April. In a single month, the growth rate of private fixed assets investment slowed down from 4.3% in April to 0.9% in May. According to the latest statistics released on July 5, 2065438+06, the growth rate of private investment further declined to 2.8% in the first half of the year, and the total investment increased to 9%. While the growth rate of private investment is slowing down, the proportion is also decreasing. Private investment in fixed assets accounted for 6 1.5% of the national investment in fixed assets (excluding farmers), down 3.6 percentage points from the same period last year.

For a time, public investment crowded out private investment, and the voice of state-owned enterprises squeezing private enterprises came one after another. When discussing the reasons and solutions for the decline of this round of private investment growth, most viewpoints still look for the reasons from the ownership level. Therefore, it has been suggested that in the financial industry, energy industry, telecommunications industry and other industries, the shareholding ratio of China government in leading enterprises in these industries is too high, reaching 80-90%. For large enterprises with a high proportion of state-owned capital, it is necessary to reduce the proportion of shares, liberalize some shares, and promote the reform of mixed ownership, so as to give the non-state-owned economy a breathing space.

Even foreign media can't sit still. The Economist wrote, "China's economy: strong growth, but how long can it last?" China's current economic growth is dominated by government investment, and the efficiency of government investment is lower than that of private investment, so this kind of economic growth is inefficient and unsustainable. Finance, energy, telecommunications and transportation should be open to private capital. The Wall Street Journal wrote that "China's economy has further declined in the wrong direction", arguing that China's current economic growth has deviated from the family, service industry and private sector, which are the engines of economic growth. Reuters wrote that "government expenditure stabilized China's economy in the second quarter, but the risks increased", arguing that the economic growth led by government expenditure hindered the reform of inefficient state-owned sectors. The Financial Times wrote China: Unbalanced Behavior, arguing that it was unsustainable for China to regress to state-led economic growth in the second quarter.

Of course, there are some different voices. For example, Peng Wensheng, chief economist of CITIC Securities, pointed out that ownership factors have always existed. It should be said that with the advancement of reform, these institutional constraints are gradually declining, and institutional constraints are not enough to explain the recent decline in private investment. Today's real economy and private economy are facing the problem that the financial industry and real estate industry expanded excessively in the past 10 years, which led to the extrusion of the real economy. In addition, some scholars have pointed out that a large amount of funds flow to real estate development, which has a crowding out effect on private investment.

Second, the current reasons for the decline in private investment growth

1. Is the current decline in the growth rate of private investment caused by the crowding out of state-owned investment? Comparing the growth curves of fixed assets investment and private investment, we can find that in 20 15 years, the two curves basically tend to be consistent, that is to say, there were reasons such as glass doors and spring doors in the past, but the growth rate of private investment was not bad. However, after the end of 20 15, the two curves deviated sharply, and the growth rate of private investment declined rapidly.

In other words, the growth rate of state-owned and state-controlled investment did not increase before the growth rate of private investment decreased at the end of 20 15. On the contrary, as shown in the above figure, by the end of 20 15, the growth rate of state-owned investment was the same as that of private investment, showing a slow downward trend. Therefore, the current decline in the growth rate of private investment is not caused by the crowding out of state-owned investment. The expansion of the growth rate of state-owned investment is that after the decline of the growth rate of private investment, the government has greatly increased state-owned investment in order to maintain the minimum economic growth and make up for the investment gap caused by the decline of the growth rate of private investment. Therefore, the increase of state-owned investment is the result of the decline of private investment, not the reason. It is counterproductive to blame the decline of private investment on state-owned investment.

2. The current decline in the growth rate of private investment is accompanied by credit expansion and real estate fever. 20 15 There are two kinds of bank assets investment: bond investment, equity investment and other investments. These two items increased by 7.6 trillion and 6.5 trillion respectively, making a total of about 14. 1 trillion. If the new loans of110.7 trillion are added, the sum of the three projects will be about 25.8 trillion. These credit funds are reflected in the asset market. At the end of 20 15, the scale of various assets in China reached 93 trillion yuan, with a compound growth rate of 5 1% in recent three years. With the support of credit expansion, both real estate investment and infrastructure investment have made great efforts. Accordingly, commodity prices rebounded sharply in the first few months of 20 16.

However, the regional heat of the real estate market is not balanced. Housing prices in first-tier cities and second-tier core cities such as Nanjing, Suzhou, Xiamen and Hefei have risen rapidly, while the real estate market in third-and fourth-tier cities is still sluggish. This imbalance is reflected in the regional differences of private investment: from 2065,438 to May 2006, private investment in fixed assets increased by 8.0% in the eastern region, 5.7% in the central region, 2.0% in the western region and 29.3% in the northeast region. While the growth rate of private investment in the east increased slightly, the growth rate of private investment in the other three regions declined significantly, which dragged down the overall decline of private investment growth.

3. Real estate fever restricts private real economy investment. First of all, it should be emphasized that the dual nature of real estate is both commodity and speculative, which means that real estate investment can be either real economy investment-producing affordable houses for people to live in, or financial speculation-taking existing real estate or real estate as collateral, hoarding land or housing through financial leverage, pushing up real estate prices, and then selling at a high level for arbitrage. Therefore, in the first-tier and second-tier core cities where real estate speculation is stronger, real estate investment should be regarded as financial speculation instead of real economy investment.

From the perspective of consumer demand, high housing prices have made the working class bear a long-term heavy mortgage burden, which has caused them to be unable to pay off their mortgages for a long time, which is equivalent to indirectly "eliminating" the customers of real economy enterprises. From the perspective of financing resources, mortgage for consumption and land acquisition and loan for production have squeezed the financing resources of the real economy from two aspects. Judging from the operating costs of enterprises in the real economy, high housing prices will not only directly increase the use costs of factories and office land, but also indirectly increase the labor costs of enterprises. Because the biggest cost of labor reproduction is the cost of living, which is particularly significant in first-tier cities. In addition to the cost of living, the labor reproduction costs such as meals, education and medical expenses will all rise due to the rise in housing prices, further increasing the labor costs of enterprises.

4. The overall relocation of the industrial chain is difficult, which will limit enterprises to the eastern coastal areas. In the late 1980s and early 1990s, marked by the information revolution, the world economy entered the rising stage of Kondratiev cycle (i.e. long wave cycle). In 2008, the world financial crisis announced the end of the rising phase of this long-wave cycle and turned to the falling phase. The rapid growth of China's investment, especially private investment, benefits from the prosperity of the world economy. With the arrival of the declining phase of the world economic cycle, traditional investment projects have little or no profit, and private enterprises are forced to transform and upgrade. If there is no low operating land cost and labor cost support, enterprises have no incentive to invest in transformation and upgrading. Enterprises are of course willing to leave the eastern coast and use cheap land and labor in the central and western regions. Local governments are also willing to develop manufacturing industries and provide jobs steadily. However, in today's highly detailed division of labor and highly integrated industrial chain, it is impossible for a single enterprise to survive independently without a good supporting industry. As long as the cost of finding supporting facilities is higher than the savings brought by cheap land and labor, enterprises have to "stick to" high-cost areas, which restricts their investment.

Third, how to deal with the current decline in the growth rate of private investment?

Since the expansion of the growth rate of state-owned investment is the result of the decline in the growth rate of private investment, rather than the reason, it is impossible to fundamentally solve the problem of the decline in the growth rate of private investment by making a fuss about the ownership structure. Although private capital is allowed to enter industries involving the national economy and people's livelihood, such as finance, energy and telecommunications, it is indeed possible to increase private investment in the short term. Because these industries have the characteristics of natural monopoly, they will enjoy monopoly profits that competitive industries do not have. The profit rate of private capital entering these industries is usually higher than that of competitive industries, and the willingness to invest naturally increases. The profits of natural monopoly industries are largely obtained by monopolizing credit power (such as financial industry) or seizing stock wealth (such as oil and mining industry) rather than production and operation. From the practice at home and abroad, if private capital can reap this monopoly profit without starting a business, the speculative upsurge caused by private capital that is not bound by "public power" will devour economic resources like a black hole, seriously inhibiting the development of the real economy, thus fundamentally deteriorating the private investment environment. The financial speculation of American and Russian oil oligarchs has led to the hollowing out of industries in the United States and Russia, both of which belong to the capitalist's predatory spirit of entrepreneurs' creativity, and the United States and Russia have learned a profound lesson. So we should seek solutions from other aspects at present.

1. Good infrastructure is the prerequisite for boosting private investment, and there is still huge room for infrastructure investment in China. At present, the whole world economy is in the decline stage of long-wave cycle, and there is a lack of ready-made high-yield investment projects in the economy before the next wave of technological breakthroughs comes. This is the right time to lay a solid foundation and provide a prerequisite for a new round of technological breakthroughs and deepening the division of labor. Overinvestment and overcapacity in China belong to the short-term demand side, not the long-term supply side, because there is a big gap between China and the United States in a series of fields such as infrastructure, communication, standardization and logistics. The per capita railway mileage of China is only 7% of that of the United States, the per capita highway mileage is only 16% of that of the United States, and the per capita fixed investment is only half of that of the United States. These areas need to increase investment to catch up with the United States. The main body of these investments is state-owned enterprises, because the infrastructure investment is huge, the return on investment is low, and the payback period is long, which is not attractive to private capital. But from the current economic practice, the government has been exploring ways and means to encourage private capital to participate in infrastructure investment. For example, in the section of "Deepening the Reform of Investment and Financing System" in the Medium and Long-term Railway Planning, it is proposed to attract social capital to invest in railway construction and innovate the varieties and methods of issuing railway bonds. Another example is the PPP model promoted by the Ministry of Finance and the National Development and Reform Commission. These models will use huge social capital to provide funds for public utilities and infrastructure construction.

2. Strictly curb real estate and financial speculation. Expansionary fiscal policy alone is not enough. We must intervene in the whole economic structure at the same time to ensure that the financial expenditure is not only used for social benefits for the first time, but also used for the production of valuable goods and services for the second, third and fourth times. Because policy investment has a "multiplier effect", the money will be redistributed, consumed and reinvested after being invested in the whole economic system, and the government cannot control the final destination of the money. If the economic structure is not straightened out, land investment or speculation is not effectively curbed, and the credit policy of real estate is not tightened, then the money spent by the government will eventually flow to real estate. The real estate boom has seriously distorted the economic structure of China. In the most prosperous era of real estate in China and South Korea, the proportion of real estate investment in GDP did not exceed 10%. As of the fourth quarter of 20 15, the proportion of real estate investment in the south to GDP was 14%, which was a very serious resource mismatch. In order to curb real estate and financial speculation, the government must increase the holding cost of real estate and restrict speculators from using financial leverage. For economic activities that have not gone through the production process, that is, economic activities that will not create new goods and services, investors must all use their own funds to engage in such activities, and may not use financial leverage to amplify their own income, including investment and speculative house purchases, stock market transactions, national debt market transactions and all other financial derivatives transactions.

3. Provide policy support for the overall relocation of the industrial chain. In the past, attracting investment only needed to provide enterprises with cheap land, labor and tax incentives. Now, in order to attract enterprises to invest in the central and western regions, in addition to traditional policy support, it is also necessary to provide relevant supporting facilities in the industrial chain. This puts higher demands on local governments, and it is necessary to fully and comprehensively understand all links in the industrial chain and the cooperation of various departments in order to form effective industrial policies. For some local governments, it is a challenging job to do a good job in industrial planning and coordinating industrial policies, and local cadres must need enough incentive mechanisms to have the motivation to do this job well. In this regard, the state can consider adjusting the assessment criteria for local cadres in a timely manner, not only to assess the local economic situation during their tenure, but also to comprehensively consider the subsequent development of all places where they have been in power after leaving office. It is necessary not only to assess the absolute growth of GDP, but also to comprehensively consider the quality and sustainability of GDP growth, that is, whether there is support from the real economy and whether there are corresponding industries and employment.