Lang

 Time: March 9, 2008 14:00
PM Location: Hefei, East Building Auditorium
Daoxiang House Hotel Theme: 365 real estate home network and strategic investment in Hefei hotline signing ceremony and the 2008 New Year China Forum < br> Forums Topic: Lang: Mr. Lang, chief Professor. He is about to do for us, entitled ping speech after we empty out the part of the time, so that all of us and an exchange professor Lang.
now the most enthusiastic applause, Professor Lang gave a speech there, please!
applause 〔〕 (14 : 22)
[Lang] Distinguished guests, ladies and friends, I am glad to share with everyone in Hefei, in 2008 the economic situation in my outlook experience. I believe that the end of last year since the Central Economic Work Conference, Internet users and the site will you be a guest of the soul caused great shock. the central regulation of thinking, the moderate tightening from the past to today's crunch. In this I have to do a stand, that is, I also agree that the central government macro-control thinking. I think the macro-control in today's international situation is very chaotic circumstances, seems even more necessary. But the purpose of my speech today is not about macro select the most appropriate path. (14:24)
[Lang] unity of purpose in the macro-control circumstances, my personal macro-financial parameters, and so route choice, I have a number of different individuals view. I hope today's speech, some of the more able to help the Government to provide new thinking.
you look at some recently published data, to 1 at the end of the price rise in 70 cities around 11%. and to the end of January, China's broad money growth and credit growth rate of between 16% -18%. can be said to have hit a new high since last year.
I urge you to think about, by doing so under the strict macro-control, Our scale of broad money growth and credit growth rate is so high. I ask you, the money gone? Well then please look around your friends, if they are doing manufacturing, you can Imagine how sad their life. I have mentioned early last year: in 2007 the manufacturing sector is very poor, the profitability of the manufacturing sector should be 2%. to the 2008 situation will only continue to deteriorate, instead of a been improved. I remarks were very harsh sounds, but by the end of January the actual published data, my assessment is correct.
and I spoke last year in several places about several new dynamic theory. That is why higher prices in this area? not the region's economic environment has become better, but the region's economy even worse. A Case Study of Shenzhen's housing prices doubled last year, two or three Fan, if you think that now the economy in Shenzhen if it continued to rise. I will tell you wrong. My theory is very clear, Shenzhen housing prices so high, because the economy continues to deteriorate, especially entrepreneurs face investment in the business environment continued to deteriorate. so entrepreneurs do not want done, closed, or not to invest the money should be invested into the property out to form a housing bubble .1 to data released at the end, I still judged correctly The. that is, a large number of manufacturing failures in Shenzhen. And in the collapse of the moment, out of a large number of their own into the property market, leading to a large number of the Shenzhen property market bubble. (14:25)
[Lang] in a speech At first, I say, and the money gone? growth rate of our currency has not slowed down, but there is no private enterprise can not get benefits. I am the end of 2007, when the speech in Henan, there are several big companies to communicate with us. Their withdraw liquidity by an average of two-thirds. withdraw the funds for where to go? This topic sounds very difficult. In fact in the beginning of last year, I have given you an answer. That is China today than you might think dollar economic times. What does that mean? today is not what we think of China's economy overheating, nor is it easy to imagine cold entrepreneurs. China's economic situation, in my early last year, then China's economy is a world that is unique, a unique dual economic environment. In other words, while China's economy overheating, but there is too cold.
China's economic situation, in my early last year, it is that the Chinese economy is a unique world, a unique dual economic environment. In other words, while China's economy overheating, but there is too cold. This is my personal research experience, I published a new theory. Data released by the end of January this year later, prove that my conclusion is correct. that is 16% -18% of the money growth rate, such a high growth rate of the scale of credit money gone? Basically, most went to the overheated sector. which sector is overheated ? it depends on the money gone? according to the results of my research shows that in the macro-control under pressure. the pressure is very big, I can give you an example. on the banks of the credit scale. you let 100 million of loans per must purchase double to three times the central bank bills. is strictly limited to your loan. coastal banks under such pressure, in addition to lending money to banks outside of the western region, while a large number of private enterprises to recover the funds. do ? lender to local governments and state-owned enterprises. Therefore, the environment faced by private enterprises, it faces the investment and business environment, such a move because banks and more difficult. This is what I call the investment and business environment continues to deteriorate. and the money gone? went to the local government infrastructure. (14:28)
[Lang] What is a dual economy? is to promote public and local governments related to the construction sector is overheating, and Most of the private enterprise sector is too cold. This is what I call the dual economy. So, under this dual economy, the macro-control efforts greatly. cooling forced banks to pumping funds in the sector, driven the overheated sector. So the more regulation, colder than cold sector, while the overheated sector more heat. This is a bank-led debt capital reflux phenomenon. But this is the first phenomenon. The second is the department in cold entrepreneurs, because of their rapid deterioration of investment environment, he does not want to do. He do? two paths: the first one out themselves not to invest the funds, and investment in overheated sectors to speculation stocks went. This is the main reason for rising prices caused by over. rather than the mainland, many economists said the excess liquidity. is not. but because of deterioration of investment environment, entrepreneurs should invest rather than to invest withdraw money, into the overheated sectors speculation, stocks go. This is the first phenomenon. The second phenomenon is the phenomenon of investment environment, resulting in a Industry does not want to do manufacturing. do? do real estate go. This is not a Haier, but also a lot of manufacturing into real estate real estate development. entrepreneurs themselves to their own funds to the department by the counter cold transfer to the overheated sector. now I see two cases, one is in the macro-control, the banks would be too cold pumping money into the overheated sector departments. The second phenomenon, financed by the private entrepreneurs themselves out into the cold sector overheated sectors. In these circumstances, 08 years of data is what? colder than cold sector, while the overheated sector more heat. This is why house prices in January rose by 11%, which is why the size of credit and broad money growth rate is so high. because the money went to the hot areas. (14:31)
[Lang] In this dual economic environment, our macro-control policy is, what kind of thinking? In this I wanted to take the time to talk to you about macroeconomics. but you rest assured that even though you may not have background knowledge of macroeconomics. But I'm very clear lectures, I can put it is the most complex concept simple. And unlike some scholars, the simple concept in a very complex. Throughout the macroeconomics textbooks, in the first-year students in American universities, the study of macroeconomic theory of policy is today's macro-control policy. U.S. university Economic policy year are reading is our macro-control policy, raising interest rates, increased bank reserve. is that simple. With this large number of recovered excess liquidity in order to control inflation and economic overheating. The premise itself was not wrong.
then I would like to ask all of you gentlemen, although the premise is not wrong, if the overheating Chinese economy today is due to excess liquidity caused by the words of it, you will in accordance with the United States, first-year university textbooks on the macro-financial variables, is to raise interest rates, raise bank reserve ratio, you can recover the natural flow, you can control the overheating of natural scenes. good. I ask you that, if not because of excess liquidity it? So today, we return to a fundamental question, what is causing overheating. Except for me most of the scholars say is: surplus, but private enterprises are facing rapidly deteriorating investment environment, the resulting dual economy.
and this dual economy overheating is due to the local government to promote the concept of GDP as the key link building caused by overheating. cold is that the investment of private enterprises are facing the business environment is deteriorating rapidly. is a fact that excess liquidity, but not the cause. you keep raising interest rates, increasing bank reserve ratios. This explains why the past four years, under the macro-control China's economy is still overheating. And not all the overheated sectors, one of the few and construction-related sector is overheating. Can we say, common to the world of macroeconomics textbook wrong with it?
(14:35)
[Lang] then I will tell you that right. why not go wrong? because you read this macroeconomics textbook itself is not difficult, it Difficulties? difficult in the subtext of this textbook is what? the world macroeconomic textbooks, only a subtext. that is, the economy must be a dollar economy, its financial variables to be effective. What is a dollar economy? like the United States, a hot country hot, a cold country too cold. Only in this kinds of circumstances, have the effect of macro-control. (14:37)
[Lang] our Chinese status quo? is also hot, and cold. So you think, you're not a one dollar economic environment , you have violated the subtext of macroeconomics textbooks. You are binary economic environment, if you understand the theory of speaking in front of me if you think about it. the central bank to raise interest rates if what results? or raise the bank reserve ratio What was the outcome? raise interest rates, you think about it, for the overheated sectors of the local government, he will not raise interest rates and not to engage in local development? I will tell you, no, he carries out. ( 14:38)
[Lang] is because local GDP as the key link building, local government will not raise interest rates without making local development. I talk to today is not the wrong, nor should and should not be a problem. I'm talking about a real issue. local government will not raise interest rates and not to engage in local construction, so overheated sectors continued to overheat, but the cold sector gets it. because most of the cold sector underground sources of financial enterprises, as long as the official interest rate increase of 0.25%, the black market rate will increase 4 times, all 1%. further blow to the already depressed private economy. so raising interest rates will make the overheated sectors continued to heat, cold sector colder . (14:39)
[Lang] and in colder circumstances, entrepreneurs have done and do not want to continue pumping funds in the not to invest, or even turn off the plant, then the department funds from cold To counter speculation overheated sectors, stocks go. This is more the more obvious macro-control dual economy, economic depression is more depression, more hot overheated sectors. This is the status quo. Why do we judge the economy is overheating? Because we judge the economy overheating indicators, basically from the overheated sector. So in the dual economic environment, you have done to further the deterioration of the macro-control dual economic environment has deteriorated, making the dual economy phenomenon is more obvious macro-control bound to fail. (14: 39)
[Lang] we adopted the government's macro-control policies, if used in the U.S.? it can be. Members please note that a while ago we talked about the turning point of the property itself . speaking, very simple, very simple. please review last year, when the U.S. central bank, that is, the Federal Reserve Bank continued to lower interest rates on the property is affected? prices continued to rise. Once the crisis hit the subprime , a higher interest rates result? real estate prices once the turning point, the next less significant. Why is there such a sharp inflection point? because the U.S. is a dollar economy, its financial variables can directly affect your economic behavior. that is a lower interest rates immediately increased prices, a price increase interest rates immediately dropped. is so direct, so specific. but we have the Mainland to talk about the dual economic environment. In this dual economic environment, real estate prices are very strange. It is not a simple changes in interest rates can be explained, you do not push the results? how interest rate changes for a change real estate? macro how to change regulation of the real estate? it is not, and that the United States, China will not. So what is the phenomenon of China do?
this moment you have to recall what kind of real estate is a feature of the industry? I remember today As a media asked me: Professor Lang is the inflection point do you think? I said: trading volume declined significantly, the price movements are very small. because prices will change depending on changes in trading volume. say your stock, if not all day today, the stock transaction, you will find that the stock price will not change . you understand what I mean? stock prices is not a turning point, but the lack of transactions. we stabilize real estate prices in some areas of the reasons, not the turning point, but the lack of trading.
then I have to answer the reporter's the question of why so many years of real estate market can not solve the problem? I can clearly tell you: We Chinese real estate market is definitely not a market-oriented industry. it is what kind of business? I put it to discuss the analysis into two; one is the supply side, one is the demand side. China's real estate market is a serious shortage of supply-side market, while the demand side of the market over the industry seriously. (14:41)
[Lang ping] a serious shortage of supply side and demand side of the market the market of serious kink over the two forces together, people could no longer afford a room. how to say these words? why the market is a serious shortage of supply-side it? think about it , where several elements of the supply side is composed of? a land development rights. Second, bank credit rights. Third, the real estate market-specific long process management. from the project to start, to completion, to sales of hundreds of large and small, almost link. land development rights, the right of bank credit and real estate-specific long process management, control of every step of the hands of the local government. as long as the control in the hands, there is the possibility of rent-seeking. increased construction costs. Another more important factor It is our land auction mechanism, seriously flawed bidding mechanism. On the surface, or we sell to the auction mechanism is fair, in fact, completely destroyed the market. What does that mean? Take our local government land around the premium for. The premium increase and the world than any economic indicator, it is very special. (14:46)
[Lang] First, it gains more than the price of anything you can imagine faster. including oil prices, including gold futures prices. it does not increase rate than our government land sales, land prices rise faster. And the price of oil Ye Hao, Ye Hao gold prices, it is up and down. our land is not only up or down, one up not only the prices or price is not known, called manipulation. sale of land itself for the government is motivated. What is positive? to the concept of GDP as the key link can be fully exploited. that is, say you sell a piece of land, GDP to rise in the value of a piece of land. sold two to GDP to increase the value of two pieces of land. If the city had a serious pollution? It's better, the same pollution generated GDP. and pollution better pollution control when the government funding it, and to create GDP. This is why land is so high land prices, pollution control can not. because the GDP has a positive contribution. But our assessment is based on local cadres GDP, almost to GDP as the only evaluation criteria. This phenomenon will surely continue. (14:47)
[Lang] Wang talked about the turning point recently, I have to give you an example of Wang to be a description. Fuzhou a six thousand square meters, Vanke into Fuzhou price marked a piece of land, one square meter to more than more than ten thousand dollars, in this based on more than ten thousand dollars, 5% of your price a little, I ask you what significance? Vanke not enter the Fuzhou people also affordable housing, Once in Fuzhou, the people can not afford a room. Because of the high real estate for a rise to a corresponding rise in the low-priced real estate is simply unable to control. to the last read up a city better, it seems more highways, and looks more beautiful houses, and the result is that local people could no longer afford a room.
those I mentioned earlier, I repeat; is the property of the supply side, including the two core resources, that is, real estate development, land credit rights, and its unique long process management, with the local government land sales, making the construction cost by not fall, but is fast .
I would ask you, now seems to launch real estate last year's macro-control, there is a regulation which is the cost for such a distortion of the front? you found? Since you can not cost-effective surface for The proposed policy, how can you expect the cost will be reduced? costs are not reduced, how will real estate prices drop? This is a very simple reason. Do not think that raising interest rates, raise bank reserve ratio to recover the credit, you can manage real estate prices. to tell you, in my case the cost side. you find that several major factors in the cost side as you are unable to control, you can not control, the cost will not fall. does not require a complicated theory, I believe that everyone can understood. then you may ask me: Professor Lang rising cost of housing is so expensive, however, who buy it? at least we the people can not afford to buy ah? this topic is even more meaningful. that is, in the end who buy this house? me to Shenzhen as an example. Shenzhen housing prices doubled last year, two or three fold, you know what that means? that is the case turned two or three savages, Shenzhen, the manufacturing sector entrepreneurs found that 10 billion in investment profits made last year, far less than ten million investment in a house that only earn more. This phenomenon is very scary. This phenomenon makes the entrepreneurs did not want to, and investment in China's enterprises are facing the business environment gradually, and is rapidly deteriorating. You just ask your friends, especially the manufacturing sector is doing, I can tell you this, all of them were hurt. they do not do business, do not do manufacturing, they are doing? China's investment environment, investment products too little. just talk to the media, the media asked me: China has the money? otherwise to the bank, due to inflation and make certain you loss. or else to invest the stock market to gambling. (14:52)
[Lang] or else to invest in real estate, to expect . In addition, you tell me what else you investment channels? you do not. So we the people will not put money in banks, left to speculation, stocks, when I look it is a forced inevitable choice. because you will definitely save money in the bank losses. So you go to property speculation, the stock market. Once a rising stock price, I am currently doing this criticism, the government suppress the price.
I told the Commission, I said: a country will go blow bubbles. only we will. We do what the Commission? should be based on the premise of protecting the interests of small investors, thorough investigation of the illegal transactions, which can be the right thing.
but he did not so do. suppress the results of the stock price, stock prices fell sharply, well, your investment opportunities and less. price it? so strict macro-control policy, the real people who want to buy a house is unable to borrow. And the room pushed up prices of these entrepreneurs do not need to borrow money. because his hands were not large investments need to invest money, hit the real estate market. until one out of the government's macro control policies to restrict lending. things like Shanghai, and now To borrow money to buy a house is simply impossible. really want to buy a house, because of macro-control and not buy a house. Then these words and pulled back. entrepreneurs should invest, but because of the worsening business environment for investment into the property market What money? I had the money to give it more than a year to take a name called III sum of money, international hot money. fourth money, saving money is our people. (14:53)
[Lang] you recall, we implemented this year for real estate in all aspects of macro- control policies, it is the third for the funds and the fourth international hot money saving people money. For example, the loan limit is the second house of money for the fourth. But the first is entirely with the second out of control. The first fund, which is the largest number. The funds hit where, where there is a bubble. let the local government of ability, to ensure a loss. I still remember last year, lectured at your site after to give lectures to Chongqing in May. also invited me to the Chongqing government, in May last year when I went to lectures in Chongqing. Chongqing, the average house price 2900 dollars.
So my conclusion was very clear, I said, Chongqing is not Foam. Later, several large media board, Professor Lang said there is no bubble in the property market in Chongqing. and add a sentence, Professor Lang said there was no bubble was not due to the high capacity of the Government, but because entrepreneurs virtual money has not come yet. I done at that time predicted, as long as a virtual money, the housing prices out of control immediately. Only I dare to do such a bold prediction. I left a month later, in June launched a new concept in Chongqing, called the urban and rural planning. (14: 55)
[Lang] The plan came out, a lot of virtual money into Chongqing. -11 in June from the month of house prices, increased from 2900 to 6000. You said that short term price quadruple The local economic situation and you have to do? nothing, basically caused by virtual money. which city can attract new concept of virtual money, once housing prices out of control into the city, the people can not afford a room . was this created a demand side of the mainstream funds. This is what the situation? This is the market too. the supply side it? control of the government, a serious shortage of the market. This a serious shortage of market supply side, the cost of its rising. can be said that the demand side, the two collaborated with virtual money, from high housing prices, people could no longer afford a room. This is the conclusion. (14:57)
[Lang] I I believe you all understand this sentence. so I am happy to answer the question the media. Why the past year, for the introduction of control measures in real estate so much, and basically fail? reason Where? The reason is you have neither insufficient for the market make a fuss about the supply side, you have not addressed the demand side of the market too much control of virtual money, conditioning. the result is of course the housing prices. Ladies and gentlemen think, in this case, you talk about Yes, should the U.S. dollar will produce economic environment. In our China is extremely complex, you see, I tell a real estate, a sector that is so kind of complicated. You can imagine the complexity of other industries today. We use simple economic thinking to handle such a complex industry, it must be reduced chance of success. This is certain.
course, I am speaking today, we should he understood as a positive assessment to say. I also hope that through this speech, to tell our government, in the end our goal of macro-control should be where? our means is a problem. So in this dual economic environment, I want to tell you. Why do you think you last days so difficult? I was in Shanghai to my mom and dad get some fruit to eat, I found that I just buy some fruit are five or six ten. Of course, I could afford, and five or six or ten I can handle. But five or six dollars and ten is very expensive. cherries are expensive, I determined to buy a car the moment I would hesitate to child. Why do you think? dual economy. I tell you today a very extreme example. because today many of them are related with the real estate industry.
you think about it, if we do entrepreneurs in the manufacturing sector, including pigs, chicken, ducks, and species of fruit people. We all because of deterioration of the environment for business investments and not to do. do what? otherwise go to property speculation, the stock market. Otherwise, developers like myself to do, like Haier. we are talking about one of the most extreme example, if We all shop and go about it. are to speculation, stocks or real estate promoter, you know this serious phenomenon? If we do not do production, and severe inflation will produce. This is why your mother, your wife or your home when the nanny to go shopping, I do not care to give you a place in any numbers are right. That is the price of your recent grocery shopping, at least up to 50%. Our consumer price index for consumer goods, the estimated number of people's livelihood is seriously underestimated. (15:00)
[Lang] pork, pig who is raising it? is the so-called cold sector of private entrepreneurs in the pig. pig-raising households is to some extent private entrepreneurs, he faces the investment environment is also an extreme deterioration of the business. For instance last year, imports of feed prices rose sharply, with Classical Swine Fever. enables private entrepreneurs pig pig he faces a sharp investment in the business environment deteriorate. in accordance with Professor Lang's theory, he would not buy a pig, and he should invest the money without investment take it speculation, stocks go. In other words, he should buy and not buy a pig pig spend them for the stock market speculation. in the end we found the Of course, rose sharply. Frankly speaking, at this point I want to give our government the top of a very highly. for encouraging pig farmers, the Government provided a lot of concessions. This is to highly positive. But I tell you , useless.
Why useless? Because pigs investment environment deteriorated sharply. This is the biggest reason. to push this concept to other industries. If we do not do production, have to speculation , stocks, or are like Haier have to do the same developer, you can imagine what the outcome is. the sharp rise in the price of goods, serious inflation. coupled with the imported inflation, coupled with our liquidity Indeed excess liquidity is not just the property prices, the main reason for rising house prices, the investment is the deterioration of the business environment. these factors came together that caused inflation. is the situation currently facing you. (15:04 )
[Lang] talked about here I believe you are all clear. I believe that we suddenly see the light, turned out to be such a thing. So, the next topic; because time is not too much, my next topic I believe all entrepreneurs are very important. According to my conclusions, and my conclusion is that the cause of the dual economic environment, because local governments as the key link to the concept of GDP, making and construction-related sector is overheating. coupled with the private entrepreneurs in the business environment facing the deterioration of the investment, resulting in the dual economic environment. cause I said before the results of all.
the last 15 minutes, I would like to answer all of you entrepreneurs, one of the most critical issue. That is Why your investment rapid deterioration of business environment? This is not the entrepreneurs want to know here? I will clearly tell you that your investment in the rapid deterioration of the business environment because this is my latest research.
that is your international division of labor in the whole industrial chain, you are positioning the value of the lowest in the industry. I invite all of you, you should never again think that China is a manufacturing powerhouse. this is the wrong thinking. really big manufacturing country not China, who? the United States. it just inside the entire manufacturing value chain to us the worst part of the Chinese people do, this is what we currently do. I Barbie, for example, in the last year and Barbie dolls China produced a serious trade dispute. you know that Wal-Mart in the U.S. dollar Barbie 9.99 yuan, China's ex-factory price is how much? 1 per U.S. dollar. (15:06)
[Lang] then left 9 under the U.S. who created it? is the product design, storage and transportation, order processing, wholesale business, retail and other large logistics environment created by the value of nine dollars. How much do we create? create a dollar value. you know this one how value is created it? is a waste of our resources, destroy our environment, the exploitation of our labor has been created by a dollar. When we created the value of a dollar after the bloody, we will also create a nine for the Americans the value of money. and dollar value of the nine Americans neither need nor labor exploitation damage to the environment need to soft link. the worst part of staying in China, called the manufacturing sector. you understand? part of the manufacturing sector, very interesting. I can answer your doubt in his heart. I think many of you here are parents with children have the woman, and you have an doubts in mind. Why is my baby girl, baby son, admitted to the University after hard .. .