Writer/Joint Business Columnist Lao Dao
Figure/Attached Gallery
On July 2 1, the Central Committee held a meeting and pointed out that we should concentrate on doing our own thing, give full play to the advantages of domestic super-large markets, gradually form a new development pattern with domestic large-scale circulation as the main body and domestic and international double circulation promoting each other, improve the modernization level of industrial chain supply chain, vigorously promote scientific and technological innovation, accelerate the research on key core technologies, and create new advantages for future development.
The interpretation of CCTV's quick review is like this:
To concentrate on doing your own thing well and form a new development pattern, we must base ourselves on the domestic circulation and firmly grasp the overall situation. Under the new situation of anti-globalization, the rise of trade protectionism and the shrinking of the world market, it is even more necessary for us to take the strategic overall situation of the great rejuvenation of the Chinese nation and the unprecedented great changes in the world as the basic starting point for planning, deeply understand the long-term and complexity of various unfavorable factors at home and abroad, and properly prepare for various difficult situations. Leading cadres at all levels should resolutely implement the decision-making arrangements of the CPC Central Committee, give full play to the advantages of the domestic super-large-scale market, and add impetus to China's economic development by prospering the domestic economy and smoothing the domestic cycle.
What does internal circulation mean?
Li Xunlei, chief economist of Zhongtai Securities, pointed out that there are many misunderstandings about the "internal circulation" that is being hotly debated. If there is a view that "internal circulation" means "independence and self-improvement", before the reform and opening up; There are also views that "internal circulation" is to stimulate domestic demand, which needs to rely on measures such as government and leverage.
Li Xunlei believes that the "internal circulation" is the main body, and the "supply side" needs to be improved more, which is a supplement to the structural reform of the supply side. In the process of China's economic transformation and upgrading, China's position in the global supply chain must be improved, and low-end supply should not be a big problem. The key is that the high-end supply capacity is weak.
In 2005, China's dependence on foreign trade reached an all-time high of 64%, then slowly declined, and now it has dropped to about 30%. Moreover, the proportion of processing trade is also declining, that is, the phenomenon of "external circulation" of "two ends are outside, big imports and big exports" is weakening, and the contribution of domestic demand to economic growth has been increasing.
In fact, "internal circulation as the main body" has become a trend. In recent years, while expanding domestic demand, China has not only increased the intensity of introducing foreign capital, but also strengthened capital export cooperation, which actually embodies the strategic thinking of "accelerating the formation of a new development pattern with large domestic circulation as the main body and dual circulation at home and abroad promoting each other".
In the era of digital economy, the more developed the economy, the larger the scale of "external circulation", and the more backward the region, the smaller the scale of "external circulation".
Internal circulation is not a narrow sense of expanding domestic demand. From a macro perspective, internal circulation has three guiding significance for the whole economic operation:
First, the national economic system has enhanced its ability to operate independently. Not only to expand domestic demand, but more importantly, the domestic production capacity and supply system should be healthier. Through the benign development of national economic autonomy, the level of employment and income should be improved.
Second, supply-side reform optimizes the economic structure. Such as the regulation of real estate. Many economists believe that the internal circulation of the economy is driven by internal forces, in which consumption is the main force. It is necessary to suppress housing prices, because high housing prices will make residents bear a lot of debts, so they will spend less money. From this perspective, even if house prices cannot fall in the future, they must remain stable in the future.
In addition, another important direction of supply-side reform is to digest overcapacity, optimize the structure and expand domestic demand.
Third, in the global industrial chain, improve the value and ability of China enterprises in the industrial chain, and move from low-end to high-end.
Li Xunlei believes that at present, the deterioration of the international trade situation, such as the United States cutting off the supply of Huawei chips, makes us subject to people.
So internal circulation is to increase the supply of these aspects. In high-tech industries such as chips and semiconductors, it is necessary to form internal production capacity in order to improve the competitiveness of enterprises in the world. However, such internal circulation cannot be achieved overnight. After all, decades of technology accumulation, even if a lot of resources are invested to overcome, will take time. This is a natural law and has nothing to do with human efforts.
Opportunities brought by internal circulation to retail industry
The development of retail industry depends on consumption. The consumption power depends on the income level of residents and the ratio of investment, savings and income. Judging from the overall guiding ideology of internal circulation, it is obviously to stimulate consumption.
The ultimate goal of optimizing industrial structure and eliminating overcapacity is to improve the income level of enterprises and individuals. Although consumption and income are not necessarily related, from a macro perspective, it is obviously good news for the entire retail industry.
Internal circulation is a policy setting. It is closely related to the current international and domestic environment.
First of all, the epidemic has had an impact on the global economy, especially on the retail industry. Catering, cinema, offline education, travel, travel, etc. Have failed to achieve a good harvest at least in the first half of the year.
In particular, the epidemic situation is in a state of recurrence, and sporadic positive case reports make people tend to be cautious in travel and consumption psychology, so there is no retaliatory consumption after predicting the epidemic situation.
Second, Sino-US relations continue to be poor, and the impact of the trade war continues. A series of vicious restrictions imposed by the United States on high-tech enterprises in China have increased the uncertainty of the development of large enterprises and adversely affected China's import and export trade.
In the whole economic system, the upstream unfavorable factors will lead to two related results. First, the reduction of business income will affect the income of employees, and even the employment situation; Second, people's prediction of future uncertainty will produce more conservative consumption psychology.
Increasing the positive stimulating effect of internal circulation on economic operation has at least the following three positive effects on the whole retail industry:
First, adjust the industrial structure and optimize the macroeconomic operation capacity. Minimize the negative impact of internal epidemics and external hostile countries. Let the running machine of the whole China economy walk out of the trough as soon as possible. The downstream retail industry will also usher in vitality.
Second, China's huge domestic market is still a good ballast stone. Whenever China's economy encounters difficulties, stimulating domestic demand becomes an important adjustment measure. To stimulate domestic demand, it is more important to raise people's expectations for the future. Suppress housing prices, reduce the willingness to speculate in real estate, and let more funds be invested in other consumption fields.
Third, effective internal circulation can actively and quickly eliminate the "overcapacity" situation. In industrial production, overcapacity leads to indigestion. When the export trade is not smooth, a large number of low-tech goods will become a backlog. The upstream economy lacks vitality, and downstream consumption will also be weak.
Trend and forecast of retail industry in the second half of the year
Christakis holds this view in the book "Blueprint":
People are United more than divided, and society tends to be good in essence.
Christakis began to be a hospice doctor 25 years ago. He found that nothing can connect us more closely than sadness and death. When the life of dying patients comes to an end, no one is unwilling to share some wishes, such as making up for their mistakes, missing their loved ones and telling stories to those who are willing to listen.
Since then, christakis has been thinking about how similar people are in essence. These years of thinking have strengthened his point of view. No matter the region or the color of skin, our similarity far exceeds the differences between people.
In other words, when everyone is faced with a great tragedy or disaster, people can be more United and trust each other.
The epidemic has not made some countries more United and cooperative, such as Sino-US relations. But from the perspective of the whole world, facing the same virus, it is more effective for human beings to cooperate and help each other.
Therefore, the trade flow between countries, that is, the "external circulation" relative to the internal circulation, will gradually become benign. This is beneficial to both domestic demand and external demand.
In addition, from the perspective of the whole domestic retail industry, there will be at least the following foreseeable trends in the second half of this year:
First, the expansion of offline physical retail will tend to be conservative or even stagnant. At least by the end of this year, the expansion speed of offline stores will further shrink, and even some stores will continue to close.
Second, social e-commerce will have more new models. Online retailing will continue to seek new ideas and breakthroughs. There are more and more modes of social e-commerce, such as Pinduoduo's help bargaining, team leader mode, more WeChat business platform mode, short video private domain traffic real-time setting mode and so on.
Third, e-commerce giants are further differentiated and diversified. For example, when JD.COM arrives home, the US Mission has a flash sale, and Xiaomi has a product. They are constantly splitting and differentiating, and their models are diversified, and their tentacles have entered new sub-sectors, further providing personal services around consumers and further liberating consumers' shopping costs.
Fourth, small and beautiful online and offline comprehensive stores are constantly emerging. From fresh food to convenience stores, from pop-up shop in clothing categories to creative flagship stores in cultural and creative categories, stores will become smaller, more refined and integrated online and offline.
Fifth, offline stores are increasingly relying on online platforms. For example, more and more offline entities will enter Tmall, Taobao, JD.COM and other platforms. In the same city retail field, catering, flower cakes, medicines, etc. More and more people will be stationed in the US Mission and Hungry Platform.
6. At the level of marketing strategy, when the limelight passes, everyone will be more rational and seek more effective marketing methods suitable for the characteristics of the industry. For example, live broadcast with goods will be more rational, and it is more suitable for low-value FMCG after air drying. Community marketing, membership marketing, door-to-door service and other marketing methods will be more attractive.
Seven, from the perspective of assets, the value of some poorly managed small and medium-sized assets will be greatly reduced. Small and medium-sized retail entities with poor anti-risk ability and no innovation channels will close down or transfer, which is also the best time to bargain-hunting.
Conclusion: Pain leads to change.
The adjustment of internal circular economy policy is a long-term project, especially deepening the supply-side reform, optimizing the industrial structure and improving the scientific and technological level of China manufacturing, which has far-reaching significance for the whole China economy to change from "big" to "strong".
As the most important "consumption link" in the internal circulation system, retail industry will inevitably benefit from the improvement of the whole economic quality and the continuous optimization of the whole environment.
However, judging from this year's time frame, the impact of the epidemic may be long-term, and sporadic reports will always arouse consumers' inner caution. Therefore, whether it is traditional offline physical retail or online e-commerce giants, pain is the main theme of this year.
The change of mode, channel, marketing and efficiency are the four main directions of thinking about change.
There are still four months in 2020, and we seem to clearly remember the fierce epidemic at the beginning of the year. Today, we are already adapting to it, overcoming it and even using it.
All retailers, if you are in pain, you will change your mind. Let's continue to sprint to 2020.
* This article only represents the author's point of view and does not represent the joint business position.