China's economic growth mode change and element analysis under "new era"
——Xiao Lisheng, Institute of World Economic and Politics, Chinese Academy of Social Sciences

Xiao Lisheng, Institute of World Economic and Politics, Chinese Academy of Social Sciences, presented his report of China's economic growth mode change and element analysis under "new era" 

Mr. Xiao delivered his report in the following aspects: 

1. Economic changes in Q1 2018. Consumption’s contribution in GDP rose, while net exports decreased. Growth of fixed investments dropped slightly and of investment in infrastructure also slipped. The unexpected increase in real estate investment mainly relied on the rapid increase in land acquisition costs, and real estate investment excluding land acquisition costs declined rapidly. Changes and outlook in 2018: relatively optimistic real estate market, but slow descent risks in infrastructure; investment in manufacturing industry to stabilize and pick up 

2. Logic for the recovery of US and European economies. Investment makes the largest contribution to this round of recovery in US, and investment in equipment sees the fastest growth. Net export and investment have contributed greatly to the Eurozone's economic recovery. Higher effective exchange rates of the euro negatively affects net export. 

3. China’s economy entering new “Three Period Superimposed”. Economic growth in 2017 ended continuous decline since 2011. And Mr. Xiao illustrated this part in import & export, commodity prices, new employment, profits of industrial enterprises, and characteristics under current macroeconomic operation. 

4. Macroeconomic policy aiming at the three “rebalances”: rotation cycle of improving profits; key period for effective supply and demand adjustment; adaptive phase of financial sector-real economy connection 

5. Monetary policy and financial market outlook. The essence of leverage ratio is the relation between credit growth and GDP growth. The difference between the rising leverage ratio between China and US is that for US it is mainly due to accelerated debt growth, while for China mainly due to decline of nominal GDP growth caused by deflation. Actual interest rates of deposit and loan have both improved and PBOC can raise the rates according to the market situation.