Yao Jingyuan:auto provide impetus to China

【Moderator Fu Yuwu: Many thanks to Secretary Chen Bin's fairly important and excellent report! As far as I am concerned, the contents of his report are extremely rich and the points of view are quite clear, especially the following ones: relationship between securing growth and structural adjustment, how to keep a industry in sustainable development for quite a long time, the two important points of view for new energy cars and the basic judgments for the future situation of market. Therefore, let us applause for Secretary Chen's excellent report again. As we all know, the automobile industry is an important, fundamental and strategic industry to our national economy. It has a very close tie with our macro-economic development. After the outbreak of the financial crisis, the running state and development trend of China's macro economy have been a focus .Today, we are very honored to have invited Yao Jingyuan , the chief economist at National Bureau of Statistics, to make a report for us, the title of his report is “ Running State Of Macro Economy And Car Industry Adjustment Potential ", welcome! 】

Yao Jingyuan , the chief economist at National Bureau of Statistics

Yao Jingyuan:

I don't want to define my speech as a report. Minister He is one of old leaders of mine, I began to participate in the revolution at the age of 20 following him and almost 40 years went gone.

Chief Zhang is also my teacher, thus today I came here is really want to talk about the situation of our economy and show it to everyone here, because everyone has been paying considerable attention to China’s economy, especially macro economy. Everyone knows that Prime Minister Wen Jiabao has said clearly in this year's Lianghui that China’s economy had started to experience unprecedented difficulties and challenges from the second half of last year. I think the first question is why China’s economy has been in such a big difficulty, if we analyze the reasons entirely, I think we have three reasons to explain why China’s economy has been in such a big difficulty:

The first reason, we all know America's subprime mortgage crisis and the world financial crisis have severe effects on China’s economy. The second reason is our own problems, such as the growth mode of our economy is extensive and mainly depend on the input of material resources. Additionally, we depend excessively on the exports to stimulate our economy and the social security of our country is far from perfection and so on. In other words, in the past everyone see China’s economy from two perspectives. On one hand, China’s economy has made outstanding achievements. However, on the other hand, China’s economy has also accumulated a lot of contradictions and problems.

When the financial crisis broke out, the problems we had accumulated confronted with the severe impacts of crisis .This is the second reason why China’s economy has been in such a big difficulty. The third reason is the cyclical rules of macro economy. As a matter of fact , macro economy has cyclical rules, the cyclical rules are just like the weather, everyone knows that the weather and climate changes have the cyclical rules, that is the circulation of the Spring, Summer, Fall and Winter. Now the weather is hot and we should take it easy , because the fall is just around the corner, and when the winter is coming, the weather will be rather cold, but we also must take it easy, because after the winter will be the spring.

Therefore, we all know macro economy also has the cyclical rules, we all learned that from prosperity to recession and depression, then to recovery, increase is a cyclical rule. Everyone knows from 2003 to 2007, China’s economy has been in double-digit growth for consecutive five years. In terms of the 30-year history of Reform and Opening-Up in China or the 60-year of the founding of People's Republic Of China, the double-digit growth for consecutive five years only happened two times during the past years, thus when it comes to the cyclical rules of macro economy, our economy has reached the situation or phase where it should have a certain degree of callback.

Now where the complex is? I think the complex is that the callback of our economy has confronted with the financial crisis, so we must grasp the three reasons entirely and the impacts America's subprime mortgage crisis and the world financial crisis on China’s economy. The extensive growth mode of our economy and the outbreak of the contradictions and problems we have accumulated in the past and the cyclical rules of macro economy make the situation more complicated than before. If we grasp the three reasons entirely, we can fully understand why the Chinese government unveiled the stimulus package to overcome the difficulties, but what the stimulus package is?

Chief Chen just said that we must to maintain growth, adjust structures, promote reforms and benefit people's livelihood together, rather than only to maintain the growth, so we can fully understand and implement the stimulus package issued by our CPC Central Committee and State Council. Secondly, I think it is necessary for us to grasp the ways America's subprime mortgage crisis and the world financial crisis impact China economy. Generally speaking, America's subprime mortgage crisis and the financial crisis began to impact China economy mainly from exports.

Take last year’s China Import And Export Fair for example, then I went there for research and I noticed that the number of buyers coming from USA has dropped 13.3% compared with the same period of last year, and the amount of contracts also dropped 9%.Everyone here can recall the spring of last year when most of us just think the financial crisis is only the business of USA and almost has limited impacts on China. However, China Import And Export Fair has sent a signal to us that because USA has been affected severely by the crisis, its buyers don't have enough money to purchase Chinese goods, the result will definitely the decline of the goods orders.

When it came to June 2008, let us count China's exports in the first half of 2008, exports to America only increased at the speed of 8.9%, if we make a comparison, we can understand how grim the problem is. In latest years, the growth of China's exports to America has been about 20%, that is, declining from about 20% to 8.9% is really unacceptable. When it came to November 2008, we can recognized almost everyone had a deeper understanding of the financial crisis, because when it came to November 2008, the three trade indicators¬--our exports, imports and total imports and exports all turned negative, the total imports and exports in last November was even negative 9 percent. We all know a very important measure to analyze macro economy is to compare the current situation with the same period of last year.