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Chapter 7 A Report of the Questionnaire Survey on the Macroeconomic Situation and Policy of China in 2015

To keep abreast of the macroeconomic situation and policy trend, an annual questionnaire survey of China's macroeconomic situation and policy jointly started twice a year since the first time on August 2013, held by the Economic Information Daily, Xinhua News Agency, and the Center for Macroeconomic Research, Xiamen University (one of the Key Research Institutes of Humanities and Social Sciences of the Ministry of Education of China). This is the fourth time questionnaire survey about the study. There were 19 questions directly about China's macroeconomic situation and policy trend in the questionnaire, and we invited some domestic economists in the relevant area for this survey by e-mail in the late January of 2015 and finally got responses from 100 of them. This survey offered the latest understandings and judgments of experts concerning the main downside risk in China's current macroeconomy, macroeconomic situation of the world, trends of some major indicators about China's macroeconomy, and trends of China's macroeconomic policies in 2015. The results of this survey are presented as follows:

1. The main downside risk in China's economic development.

What is the main downside risk for China in economic development? 77 % of the experts answered that multiple crises include fiscal income growth decline and local government's debts risk accumulation caused by decreasing real estate investment growth, 68 % considered that the pace of economic recovery differed for developed countries and there still was a big uncertainty for external demand, 55 % considered that the effectiveness of the various reform measures worked slowly and short-term stimulus effect was weak, 48 % considered that the monetary policy was not smooth for transmission channel of capital cost and facing a dilemma, 28 % considered that fiscal revenue growth dropped significantly along with the stalled real economy and fiscal deficit scale would expand rapidly, 24 % considered that price level continued to fall and deflationary pressures raised further, and 18 % considered that economic growth continued to slow, which passed to the employment resulting in a large unemployment increase and migrant workers returned home.

The results above showed that more than three quarters of the experts claimed that the main downside risk for China in economic development included fiscal income growth decline and local government's debts risk accumulation caused by decreasing real estate investment growth. More than 50 % supposed that the different pace of economic recovery for developed countries, a big uncertainty for external demand, the slow effectiveness of the various reforms, and the weak short-term stimulus would be the main downside risk for China in economic development. In addition, more than 40 % of the experts maintained that the blocked transmission channel from monetary policy to capital cost and facing a dilemma would be the main downside risk for China in economic development.

What's more, 7 % of the experts had different opinions on the main downside risk: more conservative investment and consumption because of the expected economic downturn enhancing, deficiency domestic demand that was caused by various policy or institutional factors, the too big income gap, the ineffective demand stimulus policy which needed to take moderate expansion policy stimulus, manufacturing overcapacity, the unsmooth local financing channel, investment growth of the real estate and the traditional industry falling too fast before a new investment hot spots and economic growth that was created by structure adjustment.

2. The macroeconomic situation of the world in 2015.

In accordance with the latest economic forecast of the IMF on January 20, the economic growth rate of eurozone was 1.2 % in 2014. Compared with the situation in 2014, what kind of trend will the economy of eurozone have in 2015? The survey reflected that 46 % of the experts answered that the economic growth rate of eurozone would be between 0.00 % and 0.80 % in 2015. 31 % claimed that it would be between 0.81 % and 0.99 %. 21 % of the experts thought that it would be between 1.00 % and 2.00 %. Only 2 % maintained that it would be below 0.00 %, and no one considered that the economic growth rate would be more than 2 %. In sum, more than 50 % of the experts believed that the economy of eurozone would be in recovery in 2015 and the future economic growth rate would be expected to accelerate, in which the situation would be relatively optimistic. But more than 40 % of the experts believed that the eurozone economic growth rate would show a slow downward trend in 2015.

In accordance with the latest economic forecast of the IMF on January 20, the economic growth rate of USA was about 2.4 % in 2014. Compared with the situation in 2014, what kind of trend will the economy of USA have in 2015? The survey reflected that 64 % of the experts answered that the economic growth rate of USA would be between 2.5 % and 3 % in 2015. 22 % claimed that it would be between 2.0 % and 2.4 %. 7 % of the experts thought that it would be between 3.1 % and 3.5 %. 3 % maintained that it would be more than 3.5 %. 4 % expected that it would be below 2.0 %. In sum, nearly three quarters of the experts believed that the economy of USA would be also in recovery in 2015, in which the situation would be relatively optimistic. But more than 20 % of the experts believed that the economic growth rate of USA would show a slow downward trend in 2015.

In 2014, the main bulk stock continued downward trend since 2011, and the downward trend of the crude oil price was the most significant. American WTI crude oil spot price fell sharply, from $101.67 per barrel on July 28, 2014 to $48.36 per barrel on January 22, 2015. What kind of trend would the price of crude oil per barrel in the USA WTI have in 2015? The survey reflected that 73 % of the experts answered that the price of crude oil per barrel in the USA WTI would be between 40 and 60 dollars in 2015. 14 % claimed that it would rebound sharply between 60 and 80 dollars. 13 % of the experts thought that it would continue downward between 30 and 40 dollars. In sum, nearly three quarters of the experts believed that the crude oil prices would be between 40 and 60 dollars in 2015 which showed a trend of wide shock.

The USA would open the interest rate rise cycle which pushed the return of normal monetary policy in 2015. We conducted a questionnaire survey about when the USA would choose to raise interest rates in 2015. The survey reflected that 45 % of the experts answered that the USA would choose to raise interest rates in the second quarter of 2015. 33 % claimed that it would choose to raise interest rates in the third quarter. 16 % of the experts thought that it would choose to raise interest rates in the fourth quarter. 6 % maintained that it would choose to raise interest rates in the first quarter. In sum, nearly 80 % of the experts believed that the USA would choose to raise interest rates in the middle of 2015.

3. The forecast of some major indicators of China's macroeconomy in 2015.

With respect to the growth rate of China's GDP in 2015, the survey showed that 56 % of the experts thought that it would be “between 7.0 % and 7.2 %,” 22 % expected that it would be “between 6.8 % and 7.0 %,” 17 % claimed that it would be “between 7.3 % and 7.5 %,” 4 % held the view that it would be “7.5 % or more,” and only 1 % maintained that it would be “6.8 % or less.” In sum, close to 80 % of the experts considered that the economic growth of China in 2015 would slow down continually considering the growth rate of 7.4 % in 2014.

Concerning the variation of China's CPI in 2015, the survey showed that 51 % of the experts expected it to be “between 1.6 % and 2.0 %,” 32 % thought that it might be “between 2.1 % and 2.5 %,” 8 % held the view that it would be “between 1.0 % and 1.5 %,” 7 % chose “2.5 % or more,” and 2 % claimed that it would be “1.0 % or less.” In sum, more than 60 % of experts claimed that the price level would continue to decline, and the deflationary pressure would rise further considering the fact that the CPI increased by 2.0 % in 2014.

Regarding the variation of China's PPI in 2015, the survey showed that 50 % of the experts expected it to be “between −1.9 % and −1.0 %,” 26 % thought that it might be “between −1.0 % and 0.0 %,” 9 % held the view that it would be “0.0 % or more,” 13 % chose “between −3.0 % and −2.0 %,” and 2 % claimed that it would be “-3.0 % or less.” 90 % of experts considered that China's PPI in 2015 would still be negative, but 85 % of experts held the view that although it would be negative, it would rise in 2015 considering the fact that the PPI decreased by 1.9 % in 2014 than in 2013.

In regard to the USD to CNY (RMB) exchange rate in 2015, 42 % of the experts expected that it would be “between 6.1 and 6.2,” 40 % considered that it would be “between 6.2 and 6.3,” 12 % chose “between 6.0 and 6.1,” 4 % claimed that it would be “6.3 or more,” and only 2 % held the view that that it would be “6.0 or less.” Up to December 2014, it was about 6.119. Hence, more than 80 % of the experts forecasted a continuous trend of depreciation of the RMB against the USD in 2015.

China's fixed investment in 2014 is about 50.2 trillion Yuan, with a year-on-year growth of 15.7 % which dropped significantly compared with it in 2013. How about the growth of China's fixed investments in 2015? The survey showed that 33 % of the experts expected the total fixed investments would increase year on year at the rate “between 15.1 % and 16.0 %,” 26 % considered that it would increase at the rate “between 14.0 % and 15.0 %,” 18 % chose “between 16.1 and

17.0 %,” 14 % thought that the growth rate would be “14.0 % or less,” and 9 % claimed that it would be “more than 17.0 %.” In sum, the survey showed that 40 % of experts considered that the growth of China's fixed investments would continue to slide in 2015, more than 30 % of experts considered that the growth of China's fixed investment would be relatively steady, and nearly 30 % of experts held the view that it would rise again in 2015.

Compared with the slowdown of the economy and investment growth, the investments in real estate market in 2014 was 9.50 trillion Yuan with a year-on-year growth of 10.5 %. But the growth was slower than in 2013. How about the growth rate of China's investments in real estate market in 2015? The survey showed that 66 % of the experts expected it would be “between 8.0 % and 10.5 %,” 18 % expected that it would be “between 10.6 % and 12.0 %,” 15 % claimed that it would be “8.0 % or less,” only 1 % maintained that it would be “between 12.1 % and 13.5 %,” and no one expected that it would be “more than 13.5 %.” In sum, more than 80 % of the experts considered that the investments in real estate market would slow down continually, and close to 20 % of experts held the view that it would rise in 2015.

China's total retail sales of consumer goods in 2014 were 26.24 trillion Yuan with a year-on-year growth of 12.0 %. In regard to the growth of China's total retail sales of consumer goods in 2015, the survey showed that 48 % of the experts expected that the total retail sales of consumer goods would increase year on year at the rate “between 12.1 % and 12.5 %,” 27 % considered that it would increase at the rate “between 11.6 % and 12.0 %,” 15 % chose “more than 12.5 %,” 7 % of experts held the view that it would be “between 11.1 % and 11.5 %,” and only 3 % claimed that it would be “11.0 % or less.” The results reflected that more than 60 % of experts maintained that the growth of the total retail sales of consumer goods would be higher in 2015 than in 2014, and the pulling effect of consumption on economic growth would highlight gradually. Also 37 % of experts claimed that the growth of the total retail sales of consumer goods would slow down in 2015.

China's export in 2014 had a cumulative year-on-year growth of 6.1 %, and it decreased from the previous year. With respect to the situation of exports in 2015, 37 % of the experts expected that the total exports would increase year on year at the rate “between 6.1 % and 7.0 %,” 36 % considered that they would increase at the rate “between 5.1 % and 6.0 %,” 13 % chose “between 7.1 % and 8.0 %,” 6 % held the view that it would be “between 4.1 % and 5.0 %,” 6 % thought it would be “more than 8.0 %,” and only 2 % claimed that it would be “4.0 % or less.” In sum, the results reflected that more than half of the experts maintained that the growth of the total exports would increase to a certain degree in 2015, which would probably be benefited from the uptrend of American and European economies. Also more than 40 % of experts expected that it would continually slow down in 2015.

In regard to China's import in 2014, it had a cumulative year-on-year growth of

0.4 %, and it significantly decreased from the previous year. The survey showed that 39 % of experts expected that the total imports would increase year on year at the rate “between 0.5 % and 1.0 %,” 23 % considered that they would increase at the rate “between 0.1 % and 0.4 %,” 21 % chose “between 1.1 % and 3.0 %,” 10 % held the view that it would be “between 3.1 % and 5.0 %,” 4 % thought it would be “0 % or less,” and only 3 % claimed that it would be “more than 5.0 %.” The results reflected that more than 70 % of the experts maintained that the growth of the total imports would increase in 2015. Also 27 % of experts expected that it would continually slow down in 2015.

4. The macroeconomic policy measures may be taken by China in 2015.

China's broad monetary supply (M2) in 2014 had a year-on-year growth of

12.2 %, and it was lower than the target of 13 % this year. How about the growth rate of China's M2 in 2015? The survey showed that 51 % of the experts had the expectation that M2 would grow at the rate “between 12.1 % and 13.0 %,” 26 % considered “between 13.1 % and 14.0 %,” 16 % chose “between 11.1 % and 12.0 %,” 5 % of experts maintained the views that the growth rate would be “more than 14.0 %,” and only 2 % thought that it would be “11.0 or less%.” The results reflected that more than 80 % of experts thought that the growth of M2 would be higher in 2015 than in 2014. It probably means that the Central Bank of China would keep a moderately loose monetary policy in 2015.

Will the Central Bank of China lower the deposit-reserve ratio in 2015? If yes, when will it happen? 37 % of experts expected that the central bank would lower the deposit-reserve ratio in the second quarter, 35 % thought that it would be “the first quarter,” 16 % held the view that it would happen in the second half of 2015, and 12 % of experts maintained that it would not happen in 2015. Overall, most of the experts considered that the central bank would lower the deposit-reserve ratio in 2015[1] which signaled that the Central Bank of China would keep a moderately loose monetary policy in 2015.

Will the Central Bank of China cut the benchmark rate in 2015? If yes, when will it happen? We also put it in our questionnaire. The survey showed that 35 % of experts thought that the Central Bank of China would cut the benchmark rate in the second quarter, 34 % of experts held the view that it would happen in the second half of 2015, 17 % chose “the first quarter,” and 14 % of the experts maintained that it would not happen in 2015. The results reflected that most of the experts considered that the Central Bank would cut the benchmark rate in 2015 which provided further evidence that the Central Bank of China would keep a moderately loose monetary policy in 2015.

China's fiscal revenue in 2014 had a year-on-year growth of around 8.6 %, the lowest since 1991. How about the growth rate of China's fiscal revenue in 2015? 42 % of experts expected that it would be “between 8.1 % and 8.6 %,” 35 % held the view that it would be “between 7.5 % and 8.0 %,” 14 % chose “between 8.7 % and

9.2 %,” and 7 % considered that it would be “7.5 % or less.” Only 2 % of the experts thought that it would be “between 9.3 % and 10.0 %,” and no one maintained that it would be “more than 10.0 %.” Overall, more than 80 % of experts claimed that the growth rate of China's fiscal revenue would continue to decline in 2015.

Faced with the slowdown of China's economic growth, what policies and measures shall be practiced to maintain a steady economic growth? We also investigated on this issue. 86 % of experts maintained that reducing the burdens of enterprises and encouraging private enterprises to become social investment main bodies are requisite. 73 % of experts thought that the reforms on basis and monopoly industries and allowing private capital participation in the competition in monopoly industries in the form of sole proprietorship or mixed ownership are important. 60 % of experts held the view that the government should streamline administration and delegate more power to lower levels and give full play to the fundamental role of the market in resource distribution. 58 % of experts considered that encouraging investment in the infrastructure and moderate expanding of the scale of the central budget deficit are necessary. 53 % of experts believed that optimizing the structure of government expenditure and improving the efficiency of the financial fund are needful. 41 % of experts insisted on expanding opening-up in the service sector. Only 20 % of experts felt that relaxing restrictions on targeted easing monetary policy and implementing a comprehensively loose monetary policy are imperative. Overall, more than 80 % of experts believed reducing the burdens of enterprises and encouraging private enterprises to become social investment main bodies are the most important policies to maintain a steady economic growth. Close to three quarters of experts thought the reforms on basis and monopoly industries and allowing private capital participate in the competition in monopoly industries in the form of sole proprietorship or mixed ownership are important policies, this is partly reflected the importance of private enterprise and private capital on the present economic growth in our country. 60 % of experts held the view that the government should streamline administration and delegate more power to lower levels and give full play to the fundamental role of the market in resource distribution reflecting the importance of market on the economic growth at the present stage. More than half of experts held the view that encouraging investment in the infrastructure, optimizing the structure of government expenditure, and improving the efficiency of the financial fund are also crucial. This reflected that more than half of experts expected the role of fiscal policy played in maintaining a steady economic growth. More than 40 % of experts thought that expanding opening-up in the service sector is indispensable, which reflected that service sector may become a new growth point of China's economy in the future. And most of the experts claimed that relaxing restrictions on targeted easing monetary policy and implementing a comprehensively loose monetary policy are unsuited to the situation of China's economic growth at the present stage.

Furthermore, other policies to maintain a steady economic growth were put forward by 11 % of experts. Understanding the policy and institutional factors which restrict domestic demand; encouraging high-tech industry's export; narrowing the gap between the rich and poor; moderately loose monetary policy; improving investment in society, environment, and infrastructure of big cities; promoting money to transfer from the virtual economy to real economy; combining the measures to strengthen supervision with the policies to maintain a steady economic growth; achieving fairness and efficiency balance in reform of state-owned enterprises; speeding up the readjustment of the industrial structure and seeking for industry adjustment benefits; promoting the implementations of OBAOR and other strategies; increasing investments abroad; stabilizing and developing real estate market; taking more risks of venture investment by government; and perfecting the motivation mechanism of enterprise technical progress are included.

According to the Chinese Pinyin order of their names, the 100 experts who joined this questionnaire survey were Chang Xin, Chen Changbing, Chen Gong, Chen Guifu, Chen Kunting, Chen Langnan, Chen Menggen, Chen Shoudong, Chen Yanbin, Chen Zhao, Chen Zhiyong, Dai Kuizao, Fan Conglai, Fan Ziying, Gao Bo, Gong Min, Guo Xibao, Guo Xiaohe, Guo Zhiyi, Han Zhaozhou, He Jingtong, Huang Jianzhong, Jian Xinhua, Jiang Yongmu, Jin Tao, Li Chong, Li Jianwei, Li Jun, Li Yingdong, Lin Shu, Liu Jianping, Liu Jinquan, Liu Shangxi, Liu Shiguo, Liu Shucheng, Liu Yunzhong, Liu Zhibiao, Lu Shengrong, Lu Ming, Ma Ying, Pang Jinju, Peng Shuijun, Peng Suling, Qi Yudong, Qiu Chongming, Qu Wanwen, Shen Kunrong, Shi Jinchuan, Su Jian, Sun Wei, Tang Jijun, Tian Ruzhu, Wang Changyun, Wang tongsan, Wang Cheng, Wang Guocheng, Wang Jiping, Wang Jinchao, Wang Meijin, Wang Xi, Wang Yanwu, Wang Yongqin, Wang Yuesheng, Wen Chuanhao, Wu Xinru, Wu Kangping, Xiao Xingzhi, Xu Jianguo, Xu Xianxiang, Xu Yifan, Xu Wenbin, Xu Xianchun, Yang Can, Yao Huiqin, Yi Xianrong, Yin Xingmin, Yin Heng, Yu Li, Yu Changlin, Yuan Fuhua, Zeng Jinli, Zeng Kanghua, Zeng Wuyi, Zang Xuheng, Zhang Donghui, Zhang Liqun, Zhang Long, Zhang Mingzhi, Zhang Ping, Zhang Yanqun, Zhang Yishan, Zhao Zhenquan, Zhao Zhijun, Zheng Chaoyu, Zhong Chunping, Zhou Bing, Zhou Liqun, Zhou Zejiong, Zhu Baohua, and Zhu Qigui.

The 100 experts who joined this questionnaire survey are from institutions like Ministry of Finance, China's National Bureau of Statistics, Development Research Center of the State Council, National Academy of Economic Strategy, Institute of Finance and Banking of Chinese Academy of Social Sciences, Institute of Economics of Chinese Academy of Social Sciences, Institute of World Economics and Politics of Chinese Academy of Social Sciences, Institute of Quantitative and Technical Economics of Chinese Academy of Social Sciences, Economic Information Daily, Academia Sinica, and Chung-Hua Institution for Economic

Research and universities like Anhui Finance and Economics University, Peking University, Beijing Normal University, Chongqing Technology and Business University, Dongbei University of Finance and Economics, Fudan University, East China Normal University, Huazhong University of Science and Technology, Jilin University, Jinan University, Lanzhou University, Nanjing University, Nanjing University of Finance & Economics, Nankai University, Tsinghua University, Shandong University, Shanghai University of International Business and Economics, Shanghai Jiao Tong University, Capital University of Economics and Business, Sichuan University, National Taiwan University, Tianjin University of Finance and Economics, Tianjin university of commerce, Wuhan University, Xiamen University, Xi'an Jiaotong University, Northwest University, National University of Singapore, Zhejiang University of Finance and Economics, Zhejiang University, Zhejiang University of Technology, Renmin University of China, Zhongnan University of Economics and Law, Sun Yat-sen University, Central University of Finance and Economics, etc.

Finally, we are thankful for the active participation and insights of these experts mentioned above sincerely.

  • [1] In fact, before the end of the questionnaire recovery, the Central Bank of China had cut the bank reserve requirement ratio by 0.5 % on Feb. 5
 
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