new economy

　　

Hong Kong’s "***" stated that Abenomics aims to raise funds for Japan to play an increasingly greater economic and strategic role in Asia and beyond. Japan, which becomes stronger economically, will become stronger militarily and strategically, thereby contending with China.

    However, in external propaganda, Abenomics is a pure and neutral strategy aimed at ending Japan’s deflation and turning it into a generator of global economic growth.

    Soon after taking office in 2012, Abe threw the first two of the "three arrows"-monetary stimulus measures and fiscal expansion measures.

    However, under the guidance of Abenomics, Japan has neither freed itself from a deflationary mentality, nor has it increased by 3% a year as Abe envisioned. The government has now postponed its declared goal of restoring fiscal balance by five years (until 2025).

    The Bank of Japan recently (under the cover of major international events) quietly announced that it would no longer maintain the (postponed) target of raising the Japanese inflation rate to more than 2% per year. This goal is twice the current level.

    To make matters more complicated, although the Bank of Japan’s policy keeps the yen at a level that allows Japan to be competitive in the export market, global demand is due to the US economic policy under Donald Trump’s leadership and the threat of a trade war. Began to decline. If no one wants to buy, even a weak currency cannot boost exports and profits.

    As of the end of 2017, Japan’s Abe government’s fiscal debt has reached 240% of GDP, and Abe completely abandoned the "three arrows of the old economy" and the legacy of the invalidation strategy has recorded a large amount of debt left by the predecessor. The "Three Arrows of the New Economy" needs more financial support

    The Governor of the Bank of Japan Haruhiko Kuroda, who was appointed by Shinzo Abe, was also helpless. According to Japan’s May national core CPI data released on June 22, the annual rate increased by 0.7%, which was stable at the April growth rate, which once again highlighted the Bank of Japan’s face. The challenge is that the huge stimulus measures that have been implemented for more than five years have failed to push inflation closer to 2%.

    What caught Kuroda off guard was that the Abe government once again pushed him to the edge of the cliff. The Japanese Cabinet Meeting recently adopted the "Future Investment Strategy" to support economic development and the basic guidelines for guiding economic and financial operations. The goal of reducing the deficit and achieving the balance of the basic fiscal base, which was originally scheduled to be achieved in 2020, has been postponed to 2025.

   The "Future Investment Strategy" aims to use technology to guide the upgrading of residents' consumption structure and increase the stamina for the country's long-term economic development. Including speeding up the development and implementation of autonomous driving technology, and improving the construction of related technologies and infrastructure for the popularization of autonomous driving on public roads in 2020; vigorously developing new energy technologies to minimize the demand for crude oil and coal; developing IT technology to speed up data from medical institutions It is common to reduce repeated inspections and drug waste; it is proposed to realize free admission for infants and young children in October 2019; tuition fees are reduced or exempted for college students with poor family conditions; at the same time, visa conditions are relaxed, and more foreign workers are accepted.

    Among them, new energy technologies have been put on the agenda. Japan’s New Energy Industry Technology Comprehensive Development Agency recently announced that some of the country’s enterprises and academic institutions will jointly develop the next generation of all-solid-state lithium batteries for electric vehicles in the next five years, and strive to apply them in new technologies in Japan. Energy industry. The project has a total investment of 10 billion yen. 23 automobile, battery and material companies such as Toyota, Honda, Nissan, and Panasonic, as well as 15 academic institutions such as Precision University and the Japanese Institute of Physics and Chemistry have participated in the research.

    In terms of fiscal improvement, the "Future Investment Strategy" proposes to increase the consumption tax from the current 8% to 10% in October 2019. Ye's Alchemy YESMACD, at the same time, in order to alleviate the impact of tax increases on the economy, it will provide preferential policies for the purchase of vehicles and houses in 2019 and 2020. On this basis, it is proposed to achieve a basic fiscal balance in 2025 and curb the increase in social security expenses brought about by the aging of society. For this reason, the fiscal deficit in fiscal 2021 is required to be controlled within 3%, and the debt balance is controlled at about 180% of GDP.

    As early as 2015, the Abe government put forward the goal of eliminating children by 2020 to achieve a balanced and healthy development of basic finances, but due to the continuous decline of market consumer desires, it was postponed twice in a row. Therefore, the outside world is now questioning whether the Abe government can smoothly improve its fiscal plan, especially when the population born during the peak baby period after the war in 2022 has officially entered the 75-year-old high pressure stage, and the pressure brought by aging will rise to the highest level in history. If the Abe government chooses to increase taxes at this moment, it is more likely to be forced to increase taxes. There is not enough economic space, which means that there may be greater instability.

    In July, the Bank of Japan Policy Committee will hold a meeting to conduct a quarterly review of its long-term economic growth and price expectations. Ye’s Alchemy YESMACD believes that the Bank of Japan is already in a dilemma. At this time, it should pay attention to the changes in the consumption structure of residents. The online shopping model based on the Internet is constantly squeezing the living space of hypermarket retailers, and prices will gradually deepen with the development. Pressure. However, too much emphasis on structural factors will affect the current progress of the Bank of Japan’s QQE, which will be detrimental to the economic policy adjustment of the Abe administration, and will be considered by the market as a signal of interest rate adjustment before inflation rises, which will cause the yen to appreciate. And suppress prices again.

    For a long time, the deviation of Japanese financial policy and fiscal policy has left hidden dangers that cannot be ignored for the follow-up development of the Japanese economy. QQE seems to support the continued economic development in the short term, but it is of no help to the aging economic institutions. It is only on the face. It looks a little better. Fiscal imbalance leads to an imbalance between total social demand and total social supply. The resulting inflation is not healthy inflation. While pursuing inflation, the central bank should be very prepared. Once the deviation between the two turns into contradiction and conflict, it will eventually cause The economic turmoil in Japan is not something Japan can afford.