Nearly，The views of Gu Chaoming, chief economist of Japan's Nomura Research Institute, triggered heated discussions。He stated publicly at the end of June，If the real estate bubble bursts，China may face the risk of balance sheet recession。In response to this risk，The "prescription" prescribed by Gu Chaoming is，Don’t waste time on monetary bet365 sign up bonus code and structural reforms，But let’s make a big push for fiscal bet365 sign up bonus code。

Then，What is a balance sheet recession？Gu Chaoming pointed out in his book "The Great Recession: The Holy Grail of Macroeconomics"，This kind of recession usually occurs after a severe asset price bubble bursts。Because a country’s enterprises are experiencing asset price inflation，Purchased a lot of assets with debt，As asset price bubbles burst，The value of the liability side of these companies’ balance sheets remains unchanged，The value of assets has shrunk severely，Making the company face insolvency。However，There is no problem with the production and operation of these enterprises，Still able to obtain normal operating income。Therefore，The production and operation goals of these enterprises will change from "profit maximization" to "liability minimization"，Use subsequent operating income to repay past liabilities。If a large number of companies take this action，will lead to the fallacy of composition，That is, the shrinking demand for borrowings from the corporate sector、Money multiplier drops sharply，As a result, there is a sustained negative gap in aggregate demand。If no government provides additional demand through expansionary fiscal bet365 sign up bonus code at this time，Then the economy will fall into a protracted recession。The above recession is a typical balance sheet recession。

Why Monetary bet365 sign up bonus code Cannot Respond to Balance Sheet Recessions？This is because，If the business goal of the enterprise changes from maximizing profits to minimizing liabilities，Then before the company has paid off its past liabilities，Even if the borrowing interest rate drops to zero，Companies have no incentive to borrow new debt，Meaning that the transmission mechanism of monetary bet365 sign up bonus code has basically failed。Gu Chaoming pointed out，This is actually the micro-foundation of Keynes’s so-called “liquidity trap”。

How to get out of a balance sheet recession？Gu Chaoming thinks，Fiscal policy must play the only important role。When all companies are committed to repaying debt and a negative aggregate demand gap occurs，The government must step in to fill this gap，To avoid a significant decline in economic bet365 sign up bonus code。This means that a country’s government must raise funds by issuing national debt，And then implement expansionary fiscal policy。From the perspective of increasing effective demand，Increasing fiscal spending is more important than cutting taxes，Because tax cuts may cause households to save more instead of spending。

Facing the complex and severe international situation and the arduous and arduous tasks of domestic reform, development and stability，China’s GDP growth year-on-year in the first half of 2023 is 5.5%，The economy is picking up and improving，But still facing greater pressure。First，Inflation indicators dropped significantly，Deflationary pressure is gradually increasing。June 2023，Consumer Price Index (CPI) bet365 sign up bonus code is 0.0%，The producer price index (PPI) bet365 sign up bonus code is only -5.4%，And the latter has had negative growth for 9 consecutive months。Second，The unemployment pressure among young people is increasing。June 2023，The unemployment rate surveyed by the whole society is 5.2%，The surveyed unemployment rate among young people aged 16-24 is 21.3%，Hit a historic peak。Third，Consumption、The performance of the “Troika” of investment and export fell short of expectations。June 2023，Total retail sales of consumer goods grew at a year-on-year rate of 3.1%，Significantly lower than May 12.7%；The cumulative bet365 sign up bonus code of fixed asset investment is 3.8%，The cumulative bet365 sign up bonus code of real estate investment is only -7.9%，And the latter has experienced negative growth for 14 consecutive months；The year-on-year growth rates of exports and imports in US dollars were -12 respectively.4% and -6.8%。Fourth，Weak performance of financial indicators。The narrow money supply (M1) in June 2023 has a bet365 sign up bonus code of only 3.1%，This is the lowest since January 2022。To be fair，Although the current foundation for China’s sustained economic recovery and development is still unstable，But not facing a balance sheet recession。

First，A balance sheet recession is usually triggered by the bursting of a severe asset price bubble，China has not experienced a significant asset price bubble burst so far。The bursting of Japan’s economic bubble resulted from the double fall in real estate market prices and stock prices。But the current real estate prices and stock prices in China do not have the basis for a sharp decline。For China’s real estate market，一、The real estate market in second-tier cities still faces strong real demand，The current bet365 sign up bonus code of loan and purchase restrictions has not been completely cancelled。As for three、Real estate market in fourth-tier cities，If creative policies are adopted to meet the housing needs of migrant workers in cities，can effectively alleviate the pressure of oversupply。For example，Local government uses cost plus method，Purchase commercial housing from developers，Convert it into low-rent housing and public rental housing，Can both digest commercial housing inventory，It can also meet the housing needs of migrant workers and young people in cities without duplication of construction。Of course，What deserves attention，Since 2021，A series of newly implemented real estate control policies ("three red lines" bet365 sign up bonus code for the balance sheets of real estate developers、Strengthening the management of loan concentration of commercial banks, etc.) are a bit too strict，The Chinese government has recently made adjustments to it，This is a very wise move。

Secondly，Looking at it as a whole，China’s corporate sector has not fallen into a protracted “deleveraging” process。The end of 2008 to the end of March 2023，China’s non-financial corporate sector leverage ratio increased from 95.2% to 167.0%。Although this indicator increased from 165 in June 2020.3% down to 154 in December 2021.1%，But from the beginning of 2022 to the present，Continuing to rise again。Indeed，Compared to state-owned enterprises，The leverage ratio of private enterprises has generally declined in recent years，But not all private enterprises are unwilling to borrow money。For example，Restricted by the "three red lines" bet365 sign up bonus code of the balance sheet，China’s real estate development companies will generally encounter financing difficulties from 2021，Private enterprises are the main force of real estate developers in China。In other words，It is industry control policies that restrict private enterprise financing，Non-private enterprises take the initiative to “deleverage”。

AGAIN，Currently China’s economy has not fallen into the so-called “liquidity trap”，Easy monetary policy still has high policy effectiveness。So-called liquidity trap，refers to no matter how the central bank cuts interest rates，Residents are also unwilling to consume，Companies are also unwilling to invest。But this is not true at all in China。On the one hand，The reason why there are a large number of early loan repayments in the residential sector，Precisely because the current new mortgage interest rates are significantly lower than the past existing mortgage interest rates，Resulting in residents’ departments “borrowing new and paying back old”。On the other hand，Considering that the current PPI bet365 sign up bonus code is lower than -5%，Meaning that the real interest rate of corporate financing is close to 10%。In this case，Encourage enterprises to invest，The central bank must significantly lower nominal interest rates。In fact，Due to the long-term prudent monetary policy implemented by the central bank in the past，There is still ample room for the implementation of China’s loose monetary policy，This is true whether it is a RRR cut or an interest rate cut。

In summary，No serious asset price bubble burst in China，Secondly, China’s bet365 sign up bonus code has not fallen into a continuous “deleveraging” process，China’s economy has not yet faced a liquidity trap。Using the so-called "balance sheet recession" theory to analyze China's development status，And took the opportunity to "speak down" the Chinese economy，It is neither objective nor comprehensive，The effectiveness of the "prescription" prescribed here deserves vigilance。

Current，China’s economic bet365 sign up bonus code faces two challenges。First, as the population ages and the traditional model of relying on investment and exports to drive economic bet365 sign up bonus code is unsustainable，China’s economic potential bet365 sign up bonus code continues to decline；The second is the short-term impact caused by increasing domestic and foreign uncertainties，Making China’s economic bet365 sign up bonus code significantly lower than its potential bet365 sign up bonus code rate，A persistent negative output gap has emerged。The aforementioned low inflation and high unemployment rate，It is an obvious manifestation of the negative output gap。How to deal with the above challenges？On the one hand，The Chinese government must boost the Chinese economy by launching a new round of reform and opening up，Focus on increasing potential economic bet365 sign up bonus code。Relevant structural reforms include but are not limited to: unswervingly implementing the "two unwavering principles"，Encourage the development and bet365 sign up bonus code of the private economy；Promote the free flow of various factors within the country，Create a unified national market；Promote education、Medical、Reforms in public services such as elderly care，Increase young people’s desire to have children；Make fuller use of the population quality dividend in the context of the fading population quantity dividend；Achieve high-level opening up with controllable risks；Wait。On the other hand，The Chinese government should appropriately increase the expansion of fiscal and monetary policies，Eliminate the negative output gap as soon as possible。Strengthen the coordination and linkage of fiscal policy and monetary policy，Let fiscal policy play a more active and important role。

　　(The author is deputy director bet365 sign up bonus code Institute of Finance, Chinese Academy of Social Sciences、Researcher)