2008 macro-economic trends in China

 March 17, the Chinese economic investment Forum was held in Beijing, China World Hotel. The following is Cao Yuan Zheng Record speech.
Moderator: We have invited Mr. Cao Yuanzheng discussed next 08 years about China's economic macro trends
Cao Yuan Zheng: 08 years just mentioned economic trends, this round of macro so closely with the international economic links between the past is that we speak more in demand, but also expansion of investment and consumption, the consumption of lead , no significant expansion. third in the past, we rarely encountered among the one hand there is inflation, on the other hand is the economic downturn, it is very rare.
Because of these characteristics, we have to look at This is the middle of our current situation, including last year, distinguished economists, the analysis includes a summary of the current two, the Chinese economy may be the biggest risk is inflation, then inflation, has two meanings, one is strong demand China's economy there is such a factor is the rise in excess liquidity caused by the recent look at the situation, not only is the cost factor is obvious, we often the case the rise in prices, we often referred to our CPI index, we are talking about price hikes, often three concepts, the three indices together, is the CPI, PPI and asset price index together, you find the middle of the structure of the three is not the same.
published data from the current Look, CPI factors are short-term, since February this year, rising too fast, there are factors of economic disaster, this year's vegetable 2-3 months can be resolved, the other is pork, feed, vegetable oil problem, a factor is subject to international influence, mainly oil prices since a few years ago continue to rise, and now the price of oil rose to 104 this year is expected to reach 120. We think that strengthening the energy construction, this factor is about a year should also be eased, PPI CPI figures as high, but the rate of increase of energy raw materials is very fast, and why? faster rate of increase in energy and raw material production costs means that the improvement of China's economic restructuring, energy demand in China great rigid demand, the demand for transit deepened, oil accounted for 50% of steel production in China is a big country, iron ore is 65%, companies such as Baosteel have to raise prices of 500-800 dollars. together with other minerals, and then consider the labor costs , Chinese enterprises will no longer face pressure to become an important factor, which is characteristic of this year.
to asset prices, we are concerned about housing prices, from a macro level, monetary policy, asset prices are not rare, asset prices by the macroeconomic impact from the above terms, these three factors in terms of price increases, inflation this year, if it is the biggest risk, anti-inflation also has a larger signal. The current risk is that demand one way or another, although we know the cost of promoting the more obvious the pulling effect of the currency, one way or another if it is cut off the demand, a tight monetary policy is very important, the most important means of interest rates, from the perspective of macroeconomic stabilization, the so people are more sensitive to interest rates, because the interest rate is the exchange rate together, the past, we maintain low interest rates to control RMB appreciation, assuming that is the case, for example, in 2005 was 2% appreciation of RMB, RMB interest rate if interest rates lower than the U.S. 2% -3%, if the appreciation of 2% to 2% means that you borrowed dollar investment to bring a 2% appreciation of RMB not meaningful. This year the situation has changed, the first is domestic inflation, the second U.S. interest rates are falling, in this case indicates that the objective of monetary policy in the shorter, the two are no longer together, if the RMB interest rate changes, currency to allow for a more substantial change in the RMB interest rate this year appreciation of the relatively higher speed, you can see from the second half of last year in the accelerated.
course, this is not always a word I would like to mention appreciation of the renminbi, is the depreciation of the dollar, the dollar fell too fast relative to the Renminbi, causing dollar spread, relative to the appreciation of the renminbi. In such a situation, we believe that interest rates may also increase the space. The third is the bank's open market operations in the past few years is the recovery of mobility has played a significant role in Now, of course, but not much space, indicating that there is liquidity. According to my research point of view, the People's Bank's excess liquidity has done is very good, central bank bills issued has been done about this liquidity , and liquidity is still excess demand, the most important asset is the people's preferences, the changes in this regard is the need to invest in the stock market, housing market, but the stock market, housing market, too little variety, do not go to vote, so the mobility is definitely more, so it may be the resident's preference, we are not only the Chinese people have money, but more importantly from a consumer into a pure investor, he has investment needs, we recognize the problem and was not Fine, in the past that the investment demand is random, but we now see is a real sense of investment, the demand for investment.
This is from the perspective of inflation, the other is to see how this year's economic outlook. We including last year's congress, said two raised to prevent relatively fast economic growth from overheating means that relatively fast economic growth last year, it produces relatively fast, is not it clear now which items indicates that control some of the economic cooling, a sign of overheating is rising prices, point to economic cooling. In this process, more discussion on the growing certainty that the world economy this year, mainly the United States would look like, how to crack down on China, I am in the slow deceleration, a sudden increase of the external factors make it too fast. I understand First, the U.S. economic outlook, since the U.S. subprime problems, is still continued, it could develop into a global economic crisis, the second if there is no global economic crisis, the crisis will be local or is one of the country. From the U.S. point of view, explanation is that the economic recession, the recession is negative growth, but at present this is not observed in 6 consecutive United States months of negative growth, do not rule out 1,2 months, but there can be 6 consecutive months of negative growth this year will ease the 8,9 month, at the latest early next year will be alleviated. This time, the U.S. economic downturn, if one From the perspective of world economic growth may in theory for the Chinese economy will not have much impact.
not rule out such effects will have a greater influence over the world, the people suddenly found money, this time will be tight pockets, no money, we have observed the situation, 2, March trade surplus is declining, and exports of many products, such as lipstick in the past half a dozen in the U.S. market, now is a team in selling Now is the time to assess the greatest impact. I think so, since China's economic growth last year, the troika, but some changes have taken place last year, the risk of falling. that exports this year in terms of economic contribution and We think not so serious, but also mention the fact that the Chinese economy is still in surplus, and reduce the surplus is in this direction, coupled with a U.S. recession is not too serious, so the market will not decline too fast, stages may occur of depressions, then stabilized.
this sense, there may be a world economy hit the Chinese economy did not imagine that big, but it is where the problem occurred it? is it in subordinated debt The most important issue is the practice of the U.S. economy, the United States since the 70,80, the three pillars, the United States defeated Japan, engaged in high-tech, Internet, computers, biotechnology, to the of this century high-tech bubble burst in 2001, After the United States has not found shattered pillar of the industry, but the United States should have been good, that is, consumer support, while the consumer is borrowing a lot of economic support, including me that the whole world to help the U.S., more active on the U.S. capital, U.S. financial benefits, this part does not appear to support it as an industry, and now again the behavior of sub debt shattered the old balance of consumption can depend on how far? that even if the world economy back to our past as a spoken state, a level that does not mean that everything is based on the world economy, or herald a new period of adjustment, is that consumer debt management, counter-leverage in the world economy, country of origin to the consumption by the lever, lever now is reversed. I personally think that 08 is at a relatively reasonable economic growth, the two proposed 8% seems to be possible to achieve, the Chinese economy at greater risk is due to cost-push price increases caused by this factors may become a long-term, this may clear in the next four to five years to improve the added value of China, this economic structure is difficult to maintain, the most important thing is your high-growth energy and raw material, and your price sensitivity, for the price upward pressure is very large, although the last few years, we say that the Chinese factor is not very important, but after all the food and energy are the largest, needs change, big impact on the world.
First of all I think we need to bear in monetary policy, a limited role for the cost, but create the conditions, needs at least pull up. The second need to actively promote the structural reform policies, especially fiscal policy, this economic structure to promote their long-term cost. The third In the next year, will decline in the economic downturn, but may not appear very serious situation, although the United States of factors we look not quite sure grasp. The last point is in such a process, I think, with the After all topics are related, that Chinese residents in the city over the past couple of years from simple consumer goods into consumption and investment, investment becomes a norm rather than the occasional one thing, our policy in this area is not perfect, despite the congress proposes to encourage people to properties of earnings, but the relevant aspects of our policies, instruments and conditions is not very satisfactory.
Moderator: Golden Rock would like to ask the teacher, you What kind of macroeconomic view?
Golden Rock: I think Cao Yuan Zheng and cost about the demand-driven pull, circular drive is a new definition, I was this inflation cut into four, called a imported inflation, such as changing our original imports from oil exports, oil on the rise, into imported inflation, if inflation is that it accounts for a quarter. Second, we define the cost of piled up, the price of global capital increased, and the third is the currency inflation, long-term stable policies, a sound concept is relaxed, and the fourth factor is urbanization, life is good people, you want to urbanization, the consumer wants to maintain the original, unrealistic, the original is the third of the city people, two thirds of the rural people, and now half the battle. now raise pigs to sell ten ten, ten raised to eat two now, our CPI inflation is 4.8 baseline to 4.8 as a benchmark, as we expected now if you can back that up agricultural prices, agricultural prices not because of agricultural products, but because of oil, oil has led to use of agricultural products to produce ethanol, corn prices have gone up, wheat, rice, sorry not up, if such a seat points, we can control is the money is so little, and the rest are unable to manage, this year's goal of 4.8 is a government requirement to their posts, which we can accept and reasonable.
second is subprime crisis impact on China. Now comes the subprime mortgage crisis is subprime, from buying a house, the house is filled with what? source is MADE IN CHINA, the last two a wheel drive, a wheel collapsed, a wheel must be affected, the impact is for China, also points back to the back of the front money, but also normal, the financial sector clean-up once a decade, that is, once a decade, compensation two years back round. If this decennial count, then the financial crisis we now have no real grasp of the mechanism, but the mechanism is there, think about .07 on the sub-prime, 97 years of financial crisis European currency crisis in 77 years, once every ten years, so we should come to a conclusion that the Chinese economy appears strong rise in the second half of this year, is the U.S. subprime crisis situation is fairly clear, in the second half and stable, so the shadows over, export damaged, RMB appreciation, RMB appreciation and the role of the sub-prime factors at two of our exports, it will naturally become our inflation digester, as will the decline in exports, in fact, lead to price decreases in China, I think February's inflation is largely extraordinary snowstorms, sub-prime and the Spring Festival. these three factors put people's psychological expectations pushed up, in fact, we go up more than ten do, next month, a little bit under a month We only Takayuki, lob everyone was comfortable, everyone is worried that the inflation problem has now become not need to worry about, with its natural. but the leadership point of view must be that, since have to say on the back of tight monetary policy, inflation can not bear you, bear in the bank, the bank accounted for one third of the market, coupled with the worse, the sub-prime led to devaluation of the global financial industry, the U.S. financial sector by 7%, but the U.S. financial sector accounted for U.S. proportion of 3.39%, and only then remove half of the 0.7%, which is not the case in our accounting for one third of the market how can you pull them, we put another way is to think of a word, it is necessary to adhere to tight not to enter winter. So we raised the money to accelerate yuan appreciation, said 6.2%.
Cao Yuan Zheng: You're smart, we expect that is 5.7%.
Golden Rock: I think to 6.2%, and then next year is 4.5%, so the Chinese people to buy a house in California. The things he does not import, and our own into their own appreciation of the RMB, now the food crisis, we grow food abroad, buy the farm buy the farm, the natural solution to our problem , among which we need a large macro-economic macro-regulation, this is absurd, let us laugh. This is the life of the three do not, that is not Tilly rates, reserve ratio can no longer bear, can not tighten consumer credit, you have want to consumption, and tightening consumer credit, buy a house line, which can not, you can not Tilly rates, interest rates March 19 America 50 points, which are discussed only 50-70 basis points, and now the yuan in the bank, you can get to 12% -15% of the risk-free deposits, we raise interest rates, allowing Americans to save money, and now Tilly inflationary rate policy into a policy, I think is very simple, do not know why many people do not understand.
Cao Expedition: Why now very strict control? you think I am a foreigner, you take control of me, not control, and if I wanted to come in large money can come in, not control of. the reason I feel bad for one or two point you keep things under control, because it has a non-compliance costs, if the difference on the seven points you take care of what, ah, seven points more than the risk of investment, must come. If you calculate the interest rate we are 7, the United States is 2.5 interest rates, the most conservative appreciation of 5%, according to the grace I say up 12% of what the concept of risk-free return of 10% -17%, you resist foreign investment come in? Now stop, simply let it come This is my third fallacy, why come? you want the governor of California say that you do not dig any gold vain is my fault, shop is making money, and we are now in fact there is a turning point, and I do before going abroad open-door policy, we are now a discussion of excess liquidity, has jumped into their own narrow nationalism to go into our selection of foreign capital, foreign election is a very stupid thing to do, is to help you think about our monkeys, elephants no, you do not find that the monkeys beating Well, we are now into the A-share market is elephant-level, less than 100 around the world, our bodies Hua An Fund is the elephants, but it is too foreign speakers monkeys, the monkeys now says no to power, only the elephant came to power, you have to make elephants and monkeys, this is our weak mentality, I think outside of China to become world economic leaders in an unguarded moment, if we are up 10 %, indicating that more than 5 times the national economic growth, economic growth in Europe more than 6 times, in 2008 China's net contribution to GDP than any other country, China has become in California, and as California, we now choose foreign, who love to buy who buy Ten years ago, bright eyes we see a foreigner, and now we have black eyes and look at foreigners, are to be Rogers flicker, and now China has entered a historic opportunity, if not seize this opportunity to let Americans asthma over the air, you have done, this time to open the pass, not to speak of inflation, inflation will disappear, first you can stop, though you do not want to admit it, but we have to control things they can control, there will be no flow of funds the problem of excess, as long as the flow of assets will have no problems coming. Now the house is cheaper not to buy a house, not to buy your house, why the United States let the dollar establishment, one is the global external account, the other is to encourage foreigners to the United States to buy a house, and now houses the United States have begun to line up the Europeans, and if the yuan rose to 1:4.5, California house is too cheap, buy real estate in China to the United States, Chinese Americans to buy stocks, what is wrong , Tun Town have come in, our country is the world's monkeys, elephants, it is big, and now we always say with foreign Dances with Wolves, who is the wolf, ah, you introduce the elephant you are the wolf, and you the introduction of a wolf is how do you do Tun Town. I very much agree with the great idea of an expedition, the expedition is to my advantage so that the leaders want to hear these words were.
Moderator: Today we are the subject of five links, these a part of the stock market and housing market in the PK, we are sitting here is the macro more clearly, the opposite is the study of housing sitting. We talk about their own understanding of macroeconomics.
Pei Lu Xun: Good afternoon, Well, the organizers invited me to participate in this event, I was outside investigation, the recent relevant central ministries, the Association is entrusted to us in 40 cities around the country to investigate, as we like to hear you this level experts say, people like to listen to we said, building gone up I do not buy, I buy property prices fell. I was engaged in commercial real estate, commercial real estate development, hard to talk about, difficult in two places. One is commercial and residential real estate real estate, residential real estate we all know should be issued from the central to the Ministry of Construction of two policies in the context of such a large, engaged in commercial real estate has some incidental, affected by it.
second from the macroeconomic background , just the two of you said, we want to hear in this. the previous year's Central Economic Work Conference of the survey, Professor Cao has just about the pig is a problem, then I heard your commercial real estate to grasp the situation, you sure , I can not even talk about it. Last year I speak with the Association, no one can say that on the outside, but it does not mean that association, I'm not president of the Association, which is uncertain, it is hard to grasp, the central large After the policy came out, how do we do, we jump three steps the central trilogy, the central four-step song we danced for four steps.
I thought for a moment, in the broader context, taking into account the situation of commercial real estate in the end how to residential we do not say, because I do not cover this. I think our situation is good commercial real estate, there are four good.
The first is the commercial market conditions, it should be said last year the total amount of retail sales 8.921 trillion yuan, up 16.8% over the previous year, the number getting bigger, the original prediction was 8.6 trillion, originally expected to be 13%. just said, because I do surveys, numbers did not look good I guess, because one catch the Spring Festival season in February, so the original estimate of 10 trillion by 2010 may be brought forward, consumption of any country are supporting the country's economic and commercial situation is very good, in Beijing to sell one yuan a square meter is almost, you have your million square meters is ten million. Asian Games, the Olympic Games would bring major national economic development opportunities to business is reflected in all business departments have introduced corresponding policy, Beijing has created a variety of neighborhoods. So I want to change, especially for the commercial development of three major events vary widely, most recently a visit to Shanghai, we have to sidewalk reconstruction, sidewalk reconstruction, including Beijing Lama Temple. The second is to promote the city's transport development in the rapid development of commercial real estate, urban development and transportation development is too close a. We engage in the construction of commercial networks, commercial networks planning, and traffic is really very close, often after a passage up to it a business, business up and blocked the aisle to the aisle transformation, as we now do business management planning, whether developers or investors, we must consider, the national commercial network layout, I simply talk about Beijing. Beijing we Bijiao Shu, Ring up, the Third Ring Road, the four ring to go up Fourth and Fifth go up rings, six rings now. transportation development, the Beijing traffic pie structure, the layout of commercial network to change, and we saw a mall in which to clear . You do not want to invest, how to vote, I suggest looking at the traffic network planning, including the type of Shanghai, China are the three types, one is Beijing pie, there is staking their claims, that is, that with Shanghai a colonial in nature, there is the natural form of the city. My advice to everyone if the commercial real estate development and commercial real estate investment, we must pay attention to traffic changes, as changes in transportation, urban change, and I call it positive. The fourth is the Government to promote, because the regulation of the residential real estate, is the Government's hand, the Government's hand or to promote the construction of commercial real estate network. downtown business to enhance quality, and this goes without saying, and it is now a slogan City to make life better, making the city more exciting business, a city business change is one of the major signs, so many parts of the Government to formulate preferential policies.
I think the government is the regulation for the residential real estate, commercial real estate development is favorable, and now I do not find a control signs and related documents, not yet. so I market, the overall view is that the scale of urban construction and the market continues to expand, the development of consumer demand early release of restorative China's consumer demand for the development of early release of restorative side by side, I received an American business said before this thing, restorative development of early release, and now the real estate world, 60% of cement production in China, but also There is also the consumption structure and product mix upgrade, commercial real estate appreciation of the renminbi is undervalued and coexistence, in particular, the economy is good the next few years, making China the world's most promising consumer market, the other is the national commercial network management regulations which are legislative, very hard, although not yet published, has not yet issued in the commercial law cases, commercial distribution principle of priority, in order to race against time resulting in an outbreak of commercial outlets in China to come out, foreign words to raise questions, not let you come in, I have something to advance the right policies introduced have not yell out. or else the development of network layout from the city to see, I am still question how to say this, of course, see from the parties.
me from commercial outlets layout point of view about the market situation. We all know that this year's economic work is to prevent overheating and to prevent the expansion of commercial real estate where there is not overheating? where related to people's livelihood, it is my considered, macroeconomic is your article, we careful study. from the commercial network layout, we look at the municipal, commercial centers, and community support, we have to look at, there is a large commercial street in terms of. I call it the three blocks of two bright spots, commercial real estate and commercial streets give two examples, Maliandao Commercial Street, Tea Marketing Association, are my colleagues, it accounts for sales of one-tenth of the country, the professional market and professional street, we also carried out association special analysis. The first is municipal business center have overheated? 冰火两重天 do exist, but the city's commercial center is not like heat will heat up, because there is no way out. There is a professional market characteristics Street, Good job really to make money, but also relying on industrial clusters in cash, very good, if it is not part of the past to engage the secondary wholesale business, it must withdraw.
Shanghai's creative property is very good, ready to go to Shanghai take a look at some of the old plant, put it after I read called miraculous, Beijing's 798, too, became a bright spot, just talking about the 798 or Song Zhuang in Beijing, it is a pity, Finally, as I do not know what I think to protect the legitimate rights and interests of farmers, the last farmer to come back to the house, a very public, I see reports after that get rid of these artists is very unfortunate, I think we need great wisdom solve this problem, the formation of a market is not easy, very easy to get rid of a market. It needs the government to come forward to solve this problem. There are the community business, community business is now grasping the Ministry of Commerce, community business should be a level of performance of the city's downtown, I can not get Wangfujing, but I can have a community commercial and regional commercial center, business center city is a bustling city standards, the community is the lack of commercial facilities, so the Ministry of Commerce is currently great efforts in grasping, as in previous In particular reason, when coupled with the early development of residential developers in the planning, resulting in too many debts, although the speed is still off quickly, but non-repayment is still a lot of people feel inconvenient, or the lack of community business . The fourth is a regional business center, four of them in this, a regional business center is even worse, marginalized, and in Beijing, we can see four Huidong south, where so much focus on real estate, some support, there is a consumer support, I told them that will certainly have to form a regional commercial center, not now. so I think that a few pieces of analysis, I am still bullish on the market, the analysis said one reason is that you stand high and see far ahead, We do not stand close to see things clearly. From three blocks, two bright spots me to analyze, it should be said that the local commercial real estate has Yuebuqilai the music, as well as the place is empty. the third is this year M & A and integration will affect the depth real estate development, in view of the above situation and the market for the judge, in addition to attracting individual investors, retail investors, other than the strength of domestic and foreign strategic investors, who from the first-tier cities into second and third line city, their channels of appreciation, rental income affecting their right to speak of capital, mergers and acquisitions and integration of commercial real estate will become the main trend. Although the price is relatively high, but not willing to take risks, a strong cooperation that they have a unique position of gold advantage, firmly control the limited commercial real estate, holds the right to speak the rent. commercial brand integration within the industry, not just passive active there. real estate plus a single business model change, I analyze the market two years ago Residential real estate practice in previous years commercial real estate, which is a model, now out of business carry out his real estate, this is the second model, the third mode is to enter other industries, I went to Shandong to go out two steel mills commercial real estate development, financial strength is very powerful. The fourth is to increase market concentration, increase the degree of organization. to the specialty store, stores, chain stores concentrated, this trend is very fast.
situation for the commercial real estate this year I think it promising. Of course, these macro uncertainties may affect the development of commercial real estate, I hope you some of the macro policy early in the morning paper, I'm from the micro level, the industry's point of view to talk about some of their own experience. Thank you.
Moderator: The first part would like to make a summary of the water, Mr. Skin's speech, you macroeconomic Bijiao Shu, and we all read your books, also read a variety of columns, you give us to open a head , is the head of the second theme, that is, 2008 trend forecast the stock market.
Water Paper: This is not my conclusion, that some experts are on the macro economy, the older generation. This broadly consistent with several views are relatively optimistic, and I listened very enlightening, I feel like I want a lot of places are the same, Cao Yuan Zheng judge I recognized, Lao Jin's point of view I agree, although he said a little bit evil sex, but I think this is what I have said in the Zatan in, say, inflation is there now, may or structural expansion, the capacity is concerned, so much of our domestic production capacity, 90% of capacity output is surplus, so the excess capacity from the perspective of that demand of inflation, the possibility can not be sustained in fact, even if there is, it can not last. like copper, rose eight-fold over the past few years, but our Air conditioning in the past few years did not dare to price increases, because the air conditioning compressor is copper, finally said to rise this year, Gome and Suning also joined hands to suppress, that you can not rise, up a try. because the rose necessary surplus, you can not rise up to others, you can try to digest, you said that TV would like to price increases, rose a look up on the means that with their hard, Do not try to sell. You see, including Plasma LCD, plasma only left a few percent, and including LCD also dropped significantly, I think we have a newspaper report that the public would like to price increases, is the point where we said that the heinous, plates are up, you say you are not up to the court death Well. so I recognized a structural inflation, and is structured to promote, on this point of view, this makes no sense to raise interest rates to combat inflation that is meaningless. I can not raise rates because you do not eat You have to eat my interest rate increase, we look at the composition of CPI is the main meat prices and rising food prices, I think the so-called excess liquidity to deal with interest rates does not make sense, including the final deal is actually not very meaningful inflation I do not think the right remedy, of course, you asked me to open recipe, I did not dare to open prescription as Lao Jin, who can not stand the estimates. The end result may be extreme in the way of Lao Jin and our general understanding of intermediate to said.
Water Paper: Lao Jin opened the kind of prescription, we can not say no to rate hike passed. the final form of monetary policy is affected by many factors, to remind you that the opening news conference, said Zhou Xiaochuan As a personal opinion, he believes there is room to raise interest rates, he mentioned three factors, that this thing must be the policy of a balanced outcome can not be perfect, that in theory the best, the best thing No, not necessarily the best do the things the policy will not be the best. He made three points, one must consider the issue cuts in U.S. interest rates diminished, and the second is the ordinary people by surprise, is to consider the suppression of consumption will not cause The third point is the fast thinking, and the third is to consider the impact on the capital, in our view is the cart before the horse, and interest rates remain relatively low level, when everyone will be looking to the capital market investment products, to the capital markets have expanded on the original purpose of financing ratio and the starting point, it does not increase interest rates depends on the capital markets face, if the impact on the capital market is too large, it may not raise interest rates, this is a policy consideration. Zhou Xiaochuan, more mature and I think it is indeed so, because interest rates do not increase in the past has become the highest-tech living, we all feel that interest rates a week after the CPI announcement, the rate of increase for all investors can do it. this week Comrade Ogawa increased gold content, high technology content, and increase interest rates is really not a problem, and now the deposit reserve ratio did not add, is not even mentioned, had mentioned on Friday is a normal thing, because the CPI is to 8.7, and I think that we are indeed relatively macroeconomic one asked to look at ...