July, the Third Plenary Session of the 20th Central Committee of the Communist Party of China was successfully held. At the end of July, the first meeting of the Political Bureau of the Central Committee of the Communist Party of China was held in Beijing after the Third Plenary Session of the 20th Central Committee of the Communist Party of China.
1. "At present, the adverse effects brought about by changes in the external environment are increasing, domestic effective demand is insufficient, economic operation is divided, there are still many potential risks in key areas, and there are pains in the transformation of new and old kinetic energy."
Comment on: The conference stated the grim situation that encounters at present realistically.
2. "Macroeconomic policies should be sustained and more powerful.". It is necessary to reserve as early as possible and launch a batch of incremental policy measures in a timely manner. We should effectively enhance the consistency of macro-policy orientation and form a strong joint force to promote high-quality development in all aspects.
Comments: The meeting also specifically emphasized that we should make good use of ultra-long-term special treasury bonds, support the replacement of old ones with new ones, and use the form of central borrowing to speed up the support for policy landing.
3. "We should focus on boosting consumption and expanding domestic demand. The focus of economic policy should be more on benefiting people's livelihood and promoting consumption, enhancing the consumption ability and willingness of middle and low-income groups, and supporting consumption such as cultural tourism, pension, childcare and housekeeping."
Comments: The meeting made it clear that the premise of consumption is to increase the income of residents. And the way to improve, nothing more than two points to reduce the burden and increase income, need to increase efforts to increase the income of residents, such as reducing the stock mortgage interest rate; For example, as long as the cake is bigger, everyone can reduce the burden and increase the income, and have good expectations, they dare to consume
. 4. "We should take reform as the driving force to promote stable growth, adjust the structure and prevent risks, and timely launch a number of reform measures that are mature and sensible.". Prevent and correct the use of administrative and criminal means to interfere in economic disputes in some places.
Comments: Reform and opening up is the only way to promote economic recovery, especially to balance the private economy and the state-owned economy, and work together to solve the problem.
5. "We must continue to prevent and resolve risks in key areas.". We should implement new policies to promote the steady and healthy development of the real estate market, adhere to the combination of digesting the stock and optimizing the increment, actively support the purchase of commercial housing in stock as affordable housing, further improve the work of guaranteeing the delivery of housing, improve and implement a package of local debt conversion schemes, and create conditions to speed up the resolution of debt risks of local financing platforms. We should coordinate risk prevention, strengthen supervision, promote development, boost investor confidence and enhance the internal stability of the capital market.
Comments: Now basically put the real estate and risk prevention in a column, which means that real estate is related to systemic security issues, and will go all out to seek safe landing and healthy development. We will continue to lower new mortgage interest rates to attract homebuyers; we will also lower existing mortgage interest rates to reduce the burden on existing home owners; we are looking forward to the appearance of the national team, the establishment of a national real estate reserve mechanism, the collection and storage of existing real estate, through which real estate prices will return to above the average cost price.
China's real estate industry, a smooth landing, not a large number of bankruptcies, China's financial system risk will be controllable, China's construction industry will not go bankrupt, China's poor middle class can become the middle class again, China's economic fundamentals can be re stabilized, China's new quality productivity development can have a solid foundation.
Real estate should be based on the function of living and re-endow with appropriate asset attributes and financial attributes. Where the economic level is high and there is an inflow of population, housing prices will still outpace the CPI in the future, and land can be supplied appropriately according to demand and housing construction according to reasoning. Most small and medium-sized cities should not blindly supply land for residential production, so as to maintain housing prices as much as possible; In the vast remote rural areas, the state set up a platform company to purchase idle houses at a price of 800 to 1000 yuan per square meter, demolish them without building them, and restore them to farmland, so as to underpin the value of rural real estate.
6. "New industries and future industries should be fostered and strengthened.". We should vigorously promote high-level scientific and technological self-reliance, strengthen key core technologies, and promote the transformation and upgrading of traditional industries. To effectively support the development of gazelle enterprises and unicorn enterprises, we should strengthen industry self-discipline, prevent "involution" vicious competition, strengthen the market survival mechanism, and smooth the exit channels of backward and inefficient production capacity.
Comments: This is the most important part of this meeting. The importance of rejuvenating the country through science and technology has been established, and all future development will revolve around "new quality productivity".
The meeting emphasized that "we should strengthen industry self-discipline and prevent" vicious competition ", which is a major breakthrough in our Party's economic management theory! Prices have plummeted, although people have bought cheap goods, but enterprises have basically closed down, social employment problems can not be solved, let alone salary increases, and finally consumption has been downgraded, economic development has lost its motive force.
Throughout the history of human economic development, any industry will eventually be surplus. It is totally wrong to fight a price war as long as there is a surplus. Especially in the post-industrial era, industrial investment is huge, production capacity is huge, when everyone does not make money, the market will fall into an unlimited death spiral, the poorer the more bitter, the more bitter the poorer, that is, the middle-income trap.
The Politburo meeting put forward "anti-involution" for the first time, which shows that the central government has fully realized the harm of vicious price war. To really make the market better, we must use the theory of socialist market economy with Chinese characteristics as a guide, innovate the economic management mechanism, take unified action by the state, strengthen macro-management, and force or guide the industry to reverse involution. We should implement a planned market economy model to achieve a smooth landing of traditional industries and maintain the value of traditional industries. Traditional industries enable technological innovation, which is an important part of new quality productivity. Traditional basic industries do not need to be broken, let alone abandoned easily. Even if they are to be broken, they should be "established first and then broken" as the central government said.
Conclusion: The Politburo meeting at the end of July was the most important meeting of the year.
7. Centering on anti-involution, insights:
7. Cement alone, China Anti-involution, we must not aim too high, like the new and hate the old, misunderstand that the market economy is purely free competition without brakes, which will seriously damage the foundation of China's basic industries. 7. At present, real estate prices have fallen sharply, causing a loss in the value of national real estate. 50 billion square meters of commercial houses across the country have fallen by 2000 yuan per square meter, resulting in a loss of 100 trillion yuan in national wealth. Many middle class households have become negative assets, seriously affecting their lives. Anti-involution, we must not burn bridges, only know how to empty real estate, but never appreciate the historical contribution of real estate, nor worry about how to achieve a smooth landing of real estate, so that residents'real estate will not depreciate, so that the middle class will not return to poverty, so that the total assets of the Chinese people will not shrink. 7. Involution, resulting in a decline in the efficiency of all walks of life, is reflected in the decline in the efficiency of listed companies, or even loss bankruptcy, which is also the underlying logic of the long-term downturn in the stock market. Residents fail to invest in the stock market, dare not invest in the stock market, only savings, and make the stock market lose its financing function. Without involution, the stock market rises steadily, the capital market brings investment returns, and the value of people's investment assets rises, which is an important engine to promote the sound development of the economy! Only by anti-involution and improving corporate profits can we fundamentally enhance the value of the stock market and reduce the investment risk of shareholders. 7. Involution makes the people physically and mentally exhausted, living in anxiety every day, endocrine disorders, loss of joy of life, do not want to make friends, do not want to get married, do not want to have children. The cliff-like decline of the birth population has further affected the expectation of future consumption! We should clearly point out that the achievements of scientific and technological innovation are mainly used to reduce the working hours of employees, reduce their labor intensity and increase their income. We must avoid technological innovation becoming an accomplice of involution, leading to increased involution, rising unemployment and deflation. 7. Anti-involution, we should start from increasing consumption power and reducing over-investment, and invest in promoting consumption. The focus of investment should be shifted from limited large consumption such as cars and houses to meeting the daily consumption expenditure of the people. We should continue to invest small amounts of cash, and let the people choose to buy the goods they need. Anti-involution should start from changing the logic of competition among enterprises and return to the Spring and Autumn Righteousness of harmony and good-neighborliness. Anti-involution begins with stabilizing commodity prices. First of all, we should limit production in a unified way, fix production by sales, and restore the price of bulk industrial products to a reasonable range; anti-involution, we should start from stabilizing the value of real estate. First of all, the state should unify the purchase and storage of houses, unify the restriction of land supply, strictly control new residential buildings, and restore the price of real estate to a reasonable range; anti-involution should start from stabilizing the value of assets.First of all, the state should unify the purchase and storage of stocks and restore the stock index to a reasonable range; anti-involution should start from improving the industry concentration, which can effectively curb blind production and low-price dumping. The increase of industry concentration will not necessarily bring about monopoly, anti-monopoly is anti-monopoly behavior, not anti-monopoly status. The wolf is the ancestor of the dog, the wolf is a family animal, the wolf king has absolute authority, the other wolves absolutely obey the wolf king; the old wolf king is old, the wolves elect a new wolf king, the other wolves absolutely obey the new wolf king; The new Wolf King, who was elected, also successfully realized the transformation from slave to general. 10000 years ago, hunters recaptured several small wolves and prepared to raise them to kill and eat wolf meat. Raised, the wolf cubs regard humans as the king of wolves. When they grow up, they are willing to hunt and guard the house for their masters. Dogs officially join humans, while wolves are scarce. The dog, who guards the house for humans, survived successfully. 2. The story of pigs 8000 years ago, in Hemudu, Zhejiang Province, people, with the help of dogs, recaptured a litter of small wild boars and raised them in a yard. The little wild boar grew up slowly, and when it grew to fifty or sixty catties, it was killed to eat meat. The two heads with a gentle temper were left behind by their owners and became the ancestors of domestic pigs. Pigs, because they provide meat for humans, survive successfully. 3. The story of the tiger 100,000 years ago, lions and blacks lived in the grasslands and forests of Africa respectively. Lions dared not enter the forests for fear of being captured by humans; Humans only dare to take a short walk on the grass near the forest. As soon as they see the lion, they run up the tree quickly. Slowly, the division of labor between human hands and feet has improved, and the intelligence quotient has improved. Lions and humans migrate to Eurasian forests in order to expand their living space. Lions have become tigers, solitary animals; blacks have become yellow and white people, building villages, tribes and States above the family. The tiger ate almost all the muntjac, goats and rabbits in the forest and began to eat people. As a result, human beings have killed one big tiger after another through cooperation, and the tiger is dying out. Some small tigers are forced to turn into cats and become mousetraps! Fortunately, the birds only have one nest a year, and the magpies can only keep their children in the second nest if they continue to work hard. "The cuckoo cries for blood" eulogizes the sadness of Emperor Wang of ancient Shu after his selfless dedication, and "the magpie chirps" places the hope of the people for happiness and luck, but who knows that the cuckoo is evil and the magpie is sad? Magpie never dared to think of fighting against the cuckoo, because he was afraid that the cuckoo would kill all his children. In fact, it is very simple, as long as all magpies unite and act together in the cuckoo's spawning season. Honest magpies are always deceived by cuckoos. I wonder why she doesn't have eyes from generation to generation? The cuckoo who occupies Nestle's nest has let the little magpie help him raise his son and daughter from generation to generation. I wonder when she can grow up some conscience and morality? The name of Anhui Province comes from Anqing and Huizhou, which are named Anhui. Anhui, there is a Tongcheng, let him three feet what's the harm story happened here, the most difficult thing in life is to give up; Anhui Province will Hefei, fat east and fat west together, become Hefei, this spirit of cooperation, the achievement of Hefei; For Hefei, I was deeply impressed by the Battle of Sishui and the Battle of Xiaoyaojin, both of which were classic battles in which they were forced to share a bitter hatred of the enemy and win more with less! Anhui, there is a Wuhu, is one of the four major rice cities in the country, imagine, so many meters! Smile to welcome guests from all over the world, food and clothing all over the world! Is Anhui a place that really knows how to cooperate? Layers of approval, layers of authorization, engaged in a long time! How can this be over-managed! This administrative cost, how to get! From January to June, the road transport industry and public facilities management industry, which are important sub-sectors of infrastructure investment, grew negatively, and the new construction of real estate declined sharply. The overall demand for cement was weak, and the output of cement declined sharply. From January to June of 2024, the national cement output was 85047 million tons, down 10% from the same period last year, and the total output decreased by 10. In the first half of 2024, the whole industry realized negative profits. Looking ahead to China's cement market, the demand will gradually decline, from about 2.3 billion tons in 2021 to less than 2 billion tons in 2024, and may fall below 1 billion tons in 2035. From the historical experience of foreign countries (the United States, Europe and Japan), it is an inevitable trend from competition to competition and cooperation. The cement industry in developed countries, from the per capita consumption curve, should also have experienced the stage of fierce competition. In the last 20 years, we have not heard of any price war, which coincides with the decline of domestic cement prices. In recent years, the price of cement in Europe and the United States has risen by about $50/ton. Last year, the profit of Lahao family greatly exceeded the total profit of all domestic enterprises. In the first half of 2024, The profit of the domestic cement industry has been negative. It is an inevitable trend from domestic historical experience to competition and cooperation. After ten years of fierce fighting in the Northeast, none of them got a good result, and none of them eliminated anyone. This year, they finally cooperated and jointly took the initiative to limit production, and the effect was good. Xinjiang has been fighting for many years, but all of them have not got good results. Six years ago, they cooperated with each other and took the initiative to limit production, and the effect was good. In the middle and lower reaches of the Yangtze River, from Sichuan and Chongqing to Jiangsu and Zhejiang, the cement industry has gone from competition to cooperation, and from cooperation to competition, which has been repeated many times. In vicious competition, both sides lose, and in orderly competition and cooperation, all sides win. Even if competitors are forced out by means of competition, it is no longer meaningful at present. For a period of ten years, the total annual volume in the first five years is estimated to be 1.4-1.8 billion tons, and the total annual volume in the next five years is estimated to be only 1.0-1.2 billion tons. The market sales volume decreases by 1.0 ~ 2.2 every year, and the anti-involution of cement needs to reconstruct the core values of the industry: Core Values 1: "Others earn more, so I can earn more." We need to establish "Others earn more." The core value of "I can earn more" guides production and operation. In the short run, only by actively limiting production and restoring the balance of supply and demand in the weak market, can the cement industry achieve a recovery in efficiency. Without enough initiative and consistency to limit production, all those who talk about the price of cement are cheaters and hooligans, and they can not succeed. In the first half of this year, the price of Jiangsu, Anhui, Hubei and Chongqing has had little effect so far, because the production restriction is not enough. In the future industry, we must have this awareness than who has a shorter production time, so that we can easily reach a consensus. This road will also be the only way for all traditional industries, such as petroleum, chemical industry, coal, steel, aluminum, glass and so on, to finally achieve a smooth landing. Core Value 2: "Goodwill Acquisition Improves Industry Concentration" The cement industry is anti-involution. We need to establish the concept of "Goodwill Acquisition Improves Industry Concentration". After the orderly competition and cooperation of the industry and the return of the profit margin of the industry to normal, large enterprises have more profits and more funds, so they can acquire in good faith at a reasonable consideration and speed up the process of merger and reorganization. We should abandon the evil idea of knocking down our rivals and buying them at a low price. In the process of price war, the market sales are declining year by year. You and your enterprise are getting old slowly. You will waste time and life in the battle! Stable operation of enterprises can stabilize the tax base, increase national income and promote consumption; stable operation of enterprises can guarantee reasonable profits and have funds for innovation and development; stable operation of enterprises can realize market value management and ensure the preservation and appreciation of state-owned assets; The stable operation of enterprises and the stable profits of all walks of life can enhance the confidence of all citizens in the future and be more conducive to the peaceful reunification of Taiwan! This meeting of the Political Bureau of the Central Committee clearly put forward the idea of anti-involution and anti-vicious competition, which is a thunderbolt. I hope you can hear it clearly. Enterprises that do not recognize and understand these signals are ignorant and will even become the target of state attack! The main manifestations of large enterprises not paying attention to the pattern are: finding various reasons to reduce production; giving full play to various advantages to suppress small and medium-sized enterprises; after vicious competition to grab market share, only entering but not leaving, and requiring small enterprises to synchronously raise prices; and so on. Small enterprises do not talk about the performance of the bottom line are: to take advantage of large enterprises to stop production to increase production to speed up the shipment; to small and broad not to participate in the kiln to limit production; to go back on one's word, not honest, profit-oriented; and so on. Four core values: "Let competition proceed moderately" to prevent involution, we should reconstruct economic theory and make it an important part of the theory of socialist market economy with Chinese characteristics. We can think that both state-owned enterprises and private enterprises are socialist enterprises. All assets of private enterprises are private enterprises. In macroeconomics, we can regard every cement enterprise as a workshop of "China National Cement Enterprise Group". National macro-control only needs to set reasonable limits for product price fluctuations, requiring all enterprises to uniformly reduce production time when the price is lower than the lower track, and requiring all enterprises to uniformly increase production time when the price is higher than the upper track. On this premise, the competition is moderate and orderly, the competition is efficiency, quality and service, and the industry value is always maintained in the competition.The price of traditional basic industrial products is essentially an important anchor of the currency. We should justifiably promote the price of traditional industrial products to maintain a steady rise, realize the stability and growth of the price of products in the whole society under the socialist economic system with Chinese characteristics, and smooth the negative impact on GDP after the inflection point of industrial product consumption. Core values five: "anti-involution, focus on anti-dumping" industry concentration will not necessarily bring about monopoly, anti-monopoly is anti-monopoly behavior, not anti-monopoly status. Anti-involution should focus on preventing monopoly enterprises from dumping at low prices and killing small and medium-sized enterprises by taking advantage of their dominant position in market monopoly. Dumping will lead China's economy into a big pit; anti-involution, focusing on anti-dumping. Appropriate tolerance should be given to monopoly, which is also the new trend of economic management in Europe and the United States. Most of the additional income generated by monopoly will eventually flow back to society through various channels, with little harm. Core value 6: "Anti-involution, need to unify the big market, go all the way" Many enterprises along the river, clinker, cement can go up and down along the river, influence each other, need to act together, we do things together, it is easier to achieve common goals. If an enterprise reduces the shutdown time on the grounds of export along the Yangtze River, it will eventually destroy the balance of production and marketing in the coastal market, and the unbalanced mentality of other cement enterprises in the coastal region will affect the price along the Yangtze River. 3. Fully understand the great harm of involution vicious competition. The vicious competition in traditional industries is a concomitant crisis after the development of industrialization. This crisis is caused by the continuous improvement of production efficiency and the continuous progress of production technology, which leads to a serious surplus of industrial products and a sharp decline in market prices. Vicious competition among production enterprises has led to more and more severe crises; many countries do not understand economic principles and will fall into the middle-income trap if they do not respond properly. The price of cement in developed countries such as Britain and the United States has been rising steadily, and many of them have reached the price of $150 per ton, which is the full embodiment of this logic. 3.3 . The vicious circle of the industry, every cycle, a negative growth in value, the economy will eventually stop. 3. Vicious competition leads to the failure of enterprise assets to make profits, so the assets lose their value, and the market value of listed companies loses more. The loss of the value of enterprise assets, together is the loss of the assets of the whole country. The loss of the value of enterprise assets leads to the rise of the debt ratio, and many enterprises are unable to carry out scientific and technological innovation. Together, it leads to the decline of the innovation ability of the whole country. 3.3 . Of the more than 100 economies in the world, after the per capita GDP reached 10,000 US dollars, only a dozen countries have crossed the middle-income trap, and most of the rest have fallen into the middle-income trap and returned to poverty. The central government's proposal of anti-involution is very timely, and a package of golden mean can guide China to cross the middle-income trap! 2. Be small and broad, and fight with big enterprises, especially when they encounter arrogant big enterprises. 3. Scientific and technological progress has not improved employee welfare, but has become an involution tool . 4. Environmental progress has not brought about cost reduction, but has become an involution tool . 5. Resource advantages have not been translated into profit improvement. 5. How can the cement industry jump out of the quagmire of involution? 1. Large enterprises should make greater concessions . Take the six provinces and one city of the Yangtze River as an example, the top 10 accounted for 80%. Assuming that the average kiln operation rate is only 67%, each enterprise needs to shut down the kiln for 10 days a month. If 20% of the kiln lines outside the top 10 enterprises shut down the kiln for only 5 days, the top 10 enterprises only need to shut down the kiln for 8 hours for these enterprises, and the balance will be achieved. Visible, the pattern of big company is very important! 2. Small enterprises should have a bottom line . Small enterprises should recognize the decisive role of large enterprises. Therefore, they should do everything possible to maintain the enthusiasm of large enterprises to limit production. They must not be greedy for small advantages and lose watermelons. Don't be greedy, don't be mercenary, and don't try to find a lot of objective reasons to say things. Small and medium-sized enterprises should be more honest and not go back on their words. Anti-involution requires patience. Times have changed and people have not changed. The "badness" of most people is determined by their genes; the "badness" of most people is also something they do not know. Be good at learning, learn to do accounts, take the initiative to change behavior patterns, from one-sided self-serving behavior patterns to self-serving behavior patterns, in order to achieve long-term cooperation. Anti-involution, the premise is that you have to live, we also need to improve our ability, flexible response, so that we can afford, fight, endure, in order to live to the time of spring blossoms. 4. Anti-involution, calling for the Yangtze River Cement Friendship Association-OCC According to statistics, the cement clinker production capacity of Shanghai, Chongqing, Anhui and the seven provinces and cities of the two lakes and two rivers is 450 million tons. Tianshan Materials, Conch Cement, Huaxin Cement , , six provinces and one city along the Yangtze River. Because of the convenient shipping of the Yangtze River, it has become a unified market. Enterprises need a wider range of unity of thought and action in order to achieve the goal of anti-involution, jointly safeguard the industry ecology and achieve win-win cooperation. The market calls for cross-regional coordination agencies to undertake this historical task. Small and medium-sized cement enterprises in the Yangtze River unite to set up OCC organizations, actively communicate with large enterprises, improve mutual trust between large and small enterprises, and help large enterprises to better achieve orderly operation, as soon as possible to achieve market stability, orderly competition and win-win situation in the industry. Small and medium-sized cement factories in the middle and lower reaches of the Yangtze River unite to set up OCC organizations, democratic centralization, and advance and retreat at the same frequency, which is also a mode to improve industry concentration. Full communication among enterprises, collective decision-making, minority obeying the majority, one voice to the outside world, doing what they say, fulfilling their promises and gaining industry trust can effectively reduce the cost of communication and coordination among enterprises. 5. Functions of Changjiang Cement OCC 5.5.5.6 The basic principle of output reduction advocated by Changjiang OCC Cement Friendship Association: 6.6. Reducing the duration of kiln shutdown in the name of environmental protection kiln is theoretically untenable; reducing the duration of kiln shutdown in the name of ultra-low emission is also theoretically untenable. One yard is one yard, it has nothing to do with each other! For the limited concessions of concession enterprises, other enterprises should be grateful, not complacent! Only by adhering to the principle that as long as one enterprise violates it, all market entities will be shocked together in one step, so that speculators can drill seamlessly, can the goal of common production be achieved. 6. Adhere to the spirit of contract that principles can not be abandoned, details are appropriate and flexible, promises must be realized, adhere to the principle of "one can not be less", as long as an enterprise does not limit production, we should be happy to accompany together, only to cross the Rubicon, fight with our backs to the wall, overcome all people's demons. The industry can achieve long-term results . 6. It is the right and obligation of each market entity to make reasonable pricing according to its own market, quality, brand, service and inventory. Production and marketing balance, price recovery is a natural thing, without the need for enterprises to worry too much.
