The deep considerations behind the central government's decision: the helpless move of the stock market to lift the stock market

Faced with the current economic difficulties, the central government seems to have fallen into an unsolvable puzzle. Real estate, once the mainstay of the economy, has now become a heavy burden. More than two decades of land abuse has led to housing supply, and the collapse of the population structure has made the problem worse. Although the government knows that housing prices are difficult to recover, it still has to face this cruel reality.

Big infrastructure, which was once regarded as a weapon to boost economic growth, is now saturated. New construction projects are difficult to find. As someone joked, unless an elevator is installed on Mount Everest, there is no room for new infrastructure.

The manufacturing industry is also facing difficulties. Severe overcapacity and internal price wars have made this industry difficult to move forward. If China's manufacturing industry continues to expand, it may lead to unemployment of manufacturing workers around the world, thus triggering international boycotts. After all, other countries also need social stability, employment and taxation.

In terms of consumption, the leverage ratio of the people has reached 60%, which is comparable to the average level of G20 countries. However, China's per capita GDP is far lower than the average level of G20 countries, and this is still under the premise of maintaining the value of the RMB under foreign exchange controls. The people are burdened with heavy debts, and their consumption capacity is naturally greatly reduced. Even if the government issues subsidies, people are more inclined to repay debts rather than consume.

The investment field is also not optimistic. The average profit margin of industrial enterprises above the designated size is only 5%, and many companies are struggling with losses. In this context, expanding reproduction is undoubtedly a pipe dream. Although local governments have the intention to invest, the efficiency of government investment is low, and the marginal effect of driving GDP is decreasing. The central government knows that this is a bottomless pit.

In summary, faced with the many difficulties in real estate, large infrastructure, manufacturing, consumption and investment, the central government seems to have no choice but to choose to boost the stock market as a means of short-term economic stimulus. However, whether this is just a flash in the pan or whether it can usher in a spring of blooming flowers is worth our deep consideration. #美国二季度核心PCE符合预期 #SUI网络TVL创历史新高 #美国比特币现货ETF累计净流入创新高