1997年亞洲貨幣危機最嚴重的時候，我寫了一篇文章《天塌不下來》，基本內容是中國經濟會無甚大礙地走出危機。中國政府當時決定不讓人民幣貶值，儘管，除香港以外所有東亞國家貨幣都在貶值。當時，穩定人民幣匯率的政策在中國遭到很多人反對，特別是出口商。但最終證明，這麼做不僅有益於中國，而且有益於其他東亞經濟體。中國相對完好無損地走出了1997-1998年的東亞貨幣危機，而且贏得東亞國家與地區的感謝和尊重。

2008年9月，中國面臨的外部環境同樣不利，雖然這一回的方式完全不同。美國雷曼兄弟破產引發嚴重金融危機，其規模為1929年大蕭條以來僅見。信心危機蔓延到歐洲和世界各地。一夜之間，美國和歐洲的信貸和流動性完全枯竭，到處是恐慌。美國和歐洲陷入衰退後，對中國和東亞經濟體出口商品的需求陡然減少50%以上。

當時我寫了另一篇文章《天塌不下來（二）》，再次認為由於中國和東亞經濟與美歐經濟存在部分脫鉤可能，中國經濟不僅能倖免，而且會在全球金融危機中繼續增長。果然，儘管美國和一些西歐國家陷入金融混亂和經濟減速與衰退，中國主要依靠其國內需求，設法保持了經濟的增長，2009年和2010年GDP實際增長率達到9.1%和10.3%。中國和東亞經濟體（日本除外）在這一時期的實際表現，消除了人們對部分脫鉤假設的合理性的懷疑。

2012年初，歐洲主權債務危機處在高潮期，我寫了《天塌不下來（三）》， 解釋為什麼面對歐洲主權債務危機，中國經濟能夠實現“軟着陸”，並將繼續依靠國內需求以每年大約8%的速度增長。2011年和2012年，中國經濟實際增長率分別達到9.3%和7.7%。

2013年以來，中國經濟進入向“新常態”調整的過程，即增長速度更慢、更具有環境意識、出口導向減弱、更重視服務產業、減少有型投入驅動和增加創新驅動。此後中國經濟逐漸放緩，從兩位數增長降到2013年增長7.7%，2014年增長7.3%。增長速度的放緩實際上符合中國的經濟計劃。今後中國實際GDP的增長速度預計將穩定在7%左右，進出口的增長速度也同樣會下降。但由於最近中國股市的泡沫在7月份破滅，人民幣8月份又意外小幅貶值約4%，世界市場出現恐慌，並出現了大批災難預言家，預言中國經濟將崩潰。今天，我又寫了《天塌不下來（四）》，解釋中國經濟為什麼應該能平穩過渡到“新常態”，並再次依靠國內需求，在今後幾年實現每年平均7%的增長。

這一次的不同是，“危機”不像前幾次那樣由外部原因導致。當前的危機是國內和國際的信心危機，起因是中國工業部門放緩，以及和不合時宜的中國國內經濟事件，如股市泡沫破滅和嘗試優化外匯交易機制。儘管存在這些以不同方式被廣泛曲解了的事件，但我認為，中國經濟“硬着陸”是最不可能的。這主要是因為，中國製造業存在大面積的產能過剩，只要有總需求，就會有總供給，中國經濟並不是供給約束型。由於掌握諸多政策工具的中國政府有管理國內總需求的獨特能力，將來維持大約7%的經濟實際增速並不難。

但鑒於許多產業產能過剩，以及一線以外的幾乎所有城市住宅供應過剩，私營部門固定資產投資可能不會再像以前那樣，成為總需求增長的可靠來源。僅僅降低利率，不會促使私營部門額外增加製造業或房地產業的固定投資。許多年來，美國、日本和歐元區的名義利率都接近零，但即使資產價格被拉上新高，也沒有帶來任何實際固定投資的顯著增加。這足以證明僅有貨幣政策並不能有效刺激實體經濟。現在所需要的，是維持和恢復公眾對經濟的信心，而這只能通過政府採取具體政策和行動來實現。

由於美歐經濟復蘇相對緩慢，加上中國工資水平持續上升，以及人民幣自2005年以來大幅升值約25%，現在出口也不可能是總需求增長的源泉了。8月份人民幣4%的貶值幅度不足以產生重要影響。況且，讓人民幣貶值幅度達到足以恢復玩具製造這樣的勞動密集型輕工業，並不符合中國的最大利益，因為那意味着低生活水準。從中國角度看，繼續人民幣國際化的進程要重要得多，它可以使人民幣直接用於國際交易的計價、清算和結算。為達到這一目標，人民幣對美元匯率必須維持在一個穩定水平上。

過去幾年裡，中國家庭消費增長比實際GDP增長快50%左右。但由於家庭消費在GDP中比重很小，2014年約為30%，因此不足以產生巨大推力，使總需求出現根本改觀。（2015年上半年，中國包括家庭和政府消費在內的總消費佔GDP的60%。）為使家庭消費成為總需求的主要驅動力，家庭實際可支配收入的增長速度必須大大快於實際GDP的增長。儘管如此，家庭可支配收入佔GDP的比例過半也需要一段時間。

故此，中短期內，總需求的顯著增長必然來自公共基礎設施投資和公共物品消費。預計政府在這兩方面會帶頭行動。在這個時刻，通過增加公共基礎設施投資和公共物品消費來刺激總消費有兩個額外優勢。首先，由於製造業產能閑置，公共基礎設施投資和公共物品消費的邊際社會成本很低。其次，提供公共物品等於實物收入再分配，舉例來說，它讓富人和窮人呼吸同樣的空氣，喝同樣的水。這可以縮小中國事實上的收入差距。

In 1997, at the height of the East Asian currency crisis, I wrote an article, “The Sky is not Falling (天塌不下來),” basically saying that the Chinese economy would be able to emerge from the crisis more or less unscathed. The Chinese Government at the time decided not to devalue its currency, the Renminbi, even though every other East Asian economy, except Hong Kong, had done so. The policy of holding the exchange rate of the Renminbi steady at the time was opposed by many people in China, especially by exporters, but ultimately it proved helpful not only to China itself, but also to the other East Asian economies. China emerged from the 1997-1998 East Asian currency crisis relatively unscathed and also earned the gratitude and respect of the East Asian countries and regions.

In September 2008, the external environment facing the Chinese economy was similarly negative, though in a totally different way. The failure of Lehman Brothers in the United States caused a major financial crisis, the magnitude of which had not been seen since the Great Depression of 1929. And the crisis of confidence was spreading to Europe and the rest of the world. Overnight, credit and liquidity dried up completely in the U.S. and Europe. There was panic almost everywhere. The Chinese and East Asian economies faced abruptly reduced demands for their exports by more than 50 percent as the United States and Europe fell into recession.

At that time, I wrote another article, “The Sky is not Falling II (天塌不下來 (二)),” arguing once again that the Chinese economy would be able to not only survive but also continue to grow through the global financial crisis, based on the possibility of the partial de-coupling of the Chinese and East Asian economies from the U.S. and European economies. And, sure enough, despite the financial turmoil and economic slowdown and recession in the U.S. and some of the Western European countries, the Chinese economy was able to manage to continue to grow, based mostly on its domestic demand alone, and achieved real rates of growth of GDP of 9.1% in 2009 and 10.3% in 2010. Any doubts concerning the validity of the partial de-coupling hypothesis should have been dispelled by the actual performance of the Chinese and East Asian economies (except Japan) during this period.

At the beginning of 2012, at the height of the European sovereign debt crisis, I wrote yet another article, “The Sky is not Falling III (天塌不下來 (三)),” explaining why the Chinese economy should be able to achieve a “soft landing” and continue to grow at around 8% per annum amidst the European sovereign debt crisis, based on its own domestic demand. The actual real rates of growth achieved by the Chinese economy in 2011 and 2012 were 9.3 % and 7.7% respectively.

Since 2013, the Chinese economy has been in the process of adjusting to a “new normal”–a lower rate of growth, more environmentally conscious, less export-oriented, more service-sector focused, less tangible inputs-driven and more innovation-driven. The rate of growth of the Chinese economy has since been slowing down gradually from double-digit rates to 7.7% in 2013 and 7.3% in 2014. The slowdown in the rate of growth is actually consistent with the Chinese economic plan. The rate of growth of Chinese real GDP is expected to stabilize around 7% going forward, with similarly reduced rates of growth for its exports and imports. However, with the recent bursting of the Chinese stock market bubble in July and the slight but unexpected devaluation of the Renminbi of approximately 4% in August, the world markets have panicked and doomsayers have been coming out in droves, predicting the imminent collapse of the Chinese economy. Today, I write yet another article, “The Sky is not Falling IV (天塌不下來 (四)),” explaining why the Chinese economy should be able to make a smooth transition to a “new normal”, with an average annual rate of growth of around 7% over the next few years, based once again on its own domestic demand.

What is different this time is that the “crisis” was not due to external developments as the previous crises were. The current crisis was a crisis of domestic and international confidence, caused by the slowdown of the Chinese industrial sector and the unfortunate Chinese domestic economic events such as the bursting of the stock market bubble and the attempted refinement of the foreign exchange trading mechanism. Notwithstanding these events, which were widely misinterpreted in different ways, I shall argue that a “hard landing” for the Chinese economy is most unlikely. This is mainly because given the large and widespread excess production capacities in the Chinese manufacturing industries, as long as there is aggregate demand, there will be aggregate supply. Thus, the Chinese economy is not supply-constrained. Since the Chinese Government, with the many policy instruments at its disposal, is uniquely capable of managing domestic aggregate demand, it will have no problem in maintaining a real rate of economic growth of around 7% going forward.

However, given the excess manufacturing capacities in many industries and the excess supply of residential units in almost all except the very first-tier cities, private-sector fixed assets investment is not likely to be a robust source of increase of aggregate demand as it once was. Lowering the rate of interest alone is not going to induce additional private-sector fixed investment in either manufacturing industries or residential housing. Close to zero nominal rates of interest have prevailed in the United States, Japan and the Euro Zone for many years, but they have not caused any significant increase in real fixed investment even as they have driven up asset prices to new highs. This is ample proof that monetary policy alone cannot be effective in stimulating the real economy. What is needed is the maintenance and restoration of public confidence in the economy which can only be achieved through concrete governmental policy and action.

Neither is export likely to be a source of increase of aggregate demand, given the relatively slow recovery of the U.S. and European economies and the continuing rise in the Chinese wage rate and the significant appreciation of the Renminbi of approximately 25 percent since 2005. The 4% devaluation in August was too little to have any significant impact. Moreover, it is really not in the best interests of China to devalue the Renminbi enough to go back to labor-intensive light manufacturing such as toy-making, with the low standard of living that such activities imply. It is far more important, from China's point of view, to continue the process of internationalizing the Renminbi, so that it can be directly used for the invoicing, clearing and settlement of international transactions. For this purpose, the Renminbi exchange rate vis-a-vis the U.S. Dollar must be kept at a stable level.

Chinese household consumption has been growing approximately 50 percent faster than real GDP during the past few years. But because of its low share in GDP, approximately 30% in 2014, it will not give a sufficiently large boost to aggregate demand to make a material difference as yet. (Total final consumption, which includes both household consumption and government consumption, reached 60% of GDP in the first half of 2015.) In order for household consumption to become a major driver of aggregate demand, real household disposable income must increase significantly faster than real GDP. Even then, it will take a while before household disposable income exceeds one-half of GDP.

Thus, in the short and medium terms, any significant growth in aggregate demand must come from public infrastructural investment and public goods consumption. The Government is expected to take the lead in both. Increasing public infrastructural investment and public goods consumption to boost aggregate demand at this juncture has two additional advantages. First, given the idle manufacturing capacities, the marginal social cost of the public infrastructural investment and public goods consumption is low. Second, the provision of public goods amounts to a redistribution of real income in kind, since, for example, both the rich and the poor breathe the same air and drink the same water, so that it can reduce the de facto degree of income disparity in China.

READ IN SERIES:

The Sky is not Falling, I

The Sky is not Falling, II

The Sky is not Falling, III