Article/Liu Yuanchun and Liu Xiaoguang, columnists of Sina Financial Opinion Leaders (WeChat public account kopleader)
The overall pattern of stable and progressive economic operation in China has not changed, and the main indicators remain within a reasonable range. We have the largest domestic demand market in the world, and have a good foundation for development and growth space. The overall momentum of long-term stable and positive economic development has not changed, and the economic growth rate is still in the forefront of the world.
Economic stability is the basis of high-quality development and the basic requirement of the general tone of seeking progress while maintaining stability. In 2018, China's economy has generally continued the stable trend since last year, but there has been some changes in the stability. The economic growth has declined slightly, and some indicators have fallen back. We need to pay high attention to this and enhance the predictability of policies. The key is to do a good job in stabilizing employment, finance, foreign trade, foreign capital, investment and expectations to ensure the stable operation of the economy. At present, China is in the critical period of economic transformation and adjustment, reform and opening up, and also the critical period of the reconstruction of the world economic order. To achieve stable economic growth, long-term and short-term factors, internal and external factors overlap, both to deal with the current problems, but also to have a clear long-term goal of stable growth.
Keep making progress while maintaining stability under the pattern of long-term economic growth
Stable employment is the biggest economic and livelihood issue and the foundation of social stability. The report of the 19th National Congress of the Communist Party of China pointed out that "employment is the greatest livelihood. We should adhere to the employment priority strategy and active employment policy to achieve higher quality and full employment". At present, China's employment situation is generally stable. On the basis of the improvement of last year's employment situation, the overall employment situation is still stable. In the first three quarters, the national urban survey unemployment rate remained at about 5.0%, up from 4.9% in September; 11.07 million new urban jobs were created, and the annual target task was completed one quarter ahead of schedule; The average wage of employees of enterprises above designated size increased by 10.2% year on year, 2.8 percentage points higher; The number of rural migrant workers exceeded 180 million, and the income of migrant workers increased by 7.3% year on year. However, we should also see that with the increasing downward pressure on the economy, the employment growth momentum has slowed down, and the employment demand of some industries and regions has declined, which may lead to greater employment pressure. Therefore, we should take forward-looking preventive measures, make timely pre adjustment and fine adjustment, and do a targeted job of ensuring employment and people's livelihood.
Stabilizing finance is the bottom line of avoiding systematic risks. To maintain financial stability, we should not only monitor and control internal financial risks, but also guard against the impact of external financial shocks, especially the rhythm of financial openness. From the perspective of internal factors, under the long-term debt investment driven growth model, debt accumulation to a certain extent may lead to partial debt risk. At the same time, in the continuous industrial transformation and structural adjustment, some difficult industries and enterprises will expose their hidden debt problems and release related financial risks. From the perspective of external factors, with the synchronization of global asset bubbles and the rise of international financial risks, the possibility of external financial shocks increases.
Stabilizing foreign trade is mainly to prevent the expansion of potential adverse effects of Sino US economic and trade frictions. At present, China's exports still maintain a rapid growth, but the contribution of foreign demand growth has changed from positive to negative. In 2018, China's foreign trade situation generally continued the basic trend of obvious improvement since last year, and exports, imports and total trade volume all maintained a rapid growth, especially the export growth rate increased the most. In September, exports grew 14.5% year on year. From the current situation, Sino US economic and trade frictions have limited impact on China's economy in 2018. However, as the growth rate of imports continues to be higher than that of exports, China's trade surplus narrowed, and the pulling effect of net exports on economic growth weakened, which had a certain impact on short-term economic growth.
The key to stabilizing foreign investment is to enhance foreign investment confidence in China and prevent potential risks caused by the deterioration of the external environment. In 2018, China's utilization of foreign capital was steadily expanding. The amount of foreign direct investment utilized in the first three quarters was close to US $100 billion, up 6.4% year on year, which not only reversed the adverse situation of a year-on-year decrease of 3.2%, but also increased the growth rate of foreign investment month by month. Therefore, stabilizing foreign investment on the one hand is to further consolidate the strength of the rebound of foreign investment, on the other hand is to prevent the possible return of foreign investment caused by the further deterioration of the international environment.
The core of stable investment is to improve the sustainability of private investment. In 2018, the growth momentum of private investment was strengthened. In the first three quarters, the growth rate of private fixed asset investment reached 8.7%, 2.7 percentage points higher than that of the same period last year. However, the overall growth rate of fixed asset investment declined, partly due to the withdrawal of policy factors, which is mainly reflected in the sharp decline in the growth rate of infrastructure investment. In the first three quarters, the overall investment growth rate decreased by nearly 3 percentage points due to the change in the growth rate of infrastructure investment. Considering that the policy direction and policy tools for stabilizing investment need to be significantly adjusted, we can't go back to the old way of large-scale infrastructure investment. In the future, we need to improve the expected return rate of investment by strengthening property rights protection, reducing investment costs and other measures, and activate private investment and foreign investment as soon as possible.
The core of stabilizing expectations is to enhance market confidence and strengthen the guidance of macro expectations. At present, the demand for loans of different types of enterprises has been differentiated. The demand for loans of small enterprises has increased, but the demand for loans of large and medium-sized enterprises has declined. Therefore, we need to make a series of fine-tuning of macro policies, but the core of fine-tuning is not to simply relax, but to stabilize confidence. While maintaining strategic concentration and bottom line management, we need to strengthen the maintenance of market confidence and guide expectations.
The "six stabilities" are interrelated and together constitute the source of confidence and stability. The key to coordinating the relationship between "six stability" is to grasp the relationship between stable growth and risk prevention. Because once a systemic financial crisis occurs, stabilizing employment, investment, foreign capital and expectations will be difficult to achieve, and preventing and resolving financial risks, the formation of a "double tight" situation between broad fiscal policy and monetary policy will bring downward pressure on the short-term economic trend. The decline in the growth rate of infrastructure investment since this year is a concentrated performance. It can be seen that the interrelation between the "six stabilities" has increased the difficulty in implementing short-term policies. To coordinate the relationship between them, we must find a way out from the medium and long-term reform.
The constantly releasing policy effect is conducive to the sustained and stable growth of the macro-economy
The Party and the government have taken many measures around "six stability". On November 1, General Secretary Xi Jinping's important speech at the private enterprise forum strongly refuted some statements in the society that denied and doubted the private economy, emphasizing that "the private economy is the internal element of China's economic system", "China's private economy can only grow, not weaken, not only can't 'leave', but also should move to a broader stage". It also proposes six policies and measures to support the development of private enterprises, including reducing the tax burden of enterprises, solving the problem of difficulty and high cost of financing for private enterprises, creating a fair competitive environment, improving the policy implementation mode, building a new type of pro business relationship, protecting the safety of enterprises' family and property, etc. The important speech at this critical moment has played a vital role in boosting the confidence of private enterprises, encouraging private investment and stabilizing expectations and employment.
According to the repeated speeches of General Secretary Xi Jinping and the measures successively issued by the central government, the burden on enterprises and society will be substantially reduced, thus further stimulating market vitality. With the basic completion of supply side structural reform in the field of capacity reduction and inventory reduction, and the basic stability of macro leverage ratio, the focus of future reform will be on cost reduction and weak areas. First, reduce the tax burden of enterprises by increasing tax cuts. By promoting substantial tax cuts and implementing inclusive tax exemptions for small and micro enterprises and technology-based start-ups, enterprises can enhance their sense of gain; Reduce the nominal rate of social insurance payment according to the actual situation, and ensure that the burden of enterprises is substantially reduced. The second is to reduce the financing cost of private enterprises by solving the problem of difficult and expensive financing. We will reform and improve the regulatory assessment and internal incentive mechanism of financial institutions to solve the problem that banks are afraid to lend or unwilling to lend; By expanding financial market access, private banks, small loan companies, venture capital, equity and bonds will play a role as financing channels. The third is to reduce market transaction costs and institutional costs by creating a fair competition environment and building a new pro business relationship. By breaking various "rolling shutter doors", "glass doors" and "revolving doors", we will create a fair competitive environment for private enterprises in terms of market access, approval and operation, and create sufficient market space for the development of private enterprises; We will continue to promote the transformation of industrial policies to be inclusive and functional, and strengthen the enforcement of anti-monopoly and anti unfair competition laws.
More importantly, the central government has fully recognized the lack of implementation in the early policy implementation process, and will improve the policy implementation mode in the future to ensure the full release of policy effects. General Secretary Xi Jinping pointed out in particular that in the process of preventing and resolving financial risks, some financial institutions are reluctant to lend to private enterprises or even directly withdraw loans and cut off loans, resulting in liquidity difficulties and even closure of enterprises; In the process of "replacing business tax with value-added tax", the increase in tax burden brought by standardized tax collection and management to some small and micro enterprises requiring deduction was not fully considered; In the process of improving the collection of social security contributions, the adaptability of enterprises and the expected tightening effect brought by the change of the collection and management mechanism were not fully considered. For these problems, General Secretary Xi Jinping clearly requested that "we should solve them according to the actual situation and create a good environment for the development of private enterprises". It is believed that with the full release of policy effects, the environment for stable economic development will be further consolidated, and on this basis, progress will be achieved while maintaining stability.
The gradual improvement of the macro-control system has laid a solid foundation for effective response to economic fluctuations
The current economic situation in China is the result of the combined action of long-term and short-term, internal and external factors. We should maintain sufficient confidence in the resilience of China's economy and the macro-control ability of our government. The overall pattern of stable and progressive economic operation in China has not changed, and the main indicators remain within a reasonable range. We have the largest domestic demand market in the world, and have a good foundation for development and growth space. The overall momentum of long-term stable and positive economic development has not changed, and the economic growth rate is still in the forefront of the world. Moreover, the continuous improvement of the macro-control system since the 18th CPC National Congress has laid a solid foundation for us to deal with short-term economic fluctuations.
Since the 18th National Congress of the Communist Party of China (CPC), in the face of the challenges of the new situation to the traditional macro-control system, the CPC Central Committee with Comrade Xi Jinping at the core has made a lot of innovations and reforms in the field of macro-economy on the basis of comprehensive analysis of the long cycle of the world economy and the laws of China's economic development, and has not only made outstanding economic achievements, It also promotes the maturity of the macro-control system and theoretical system with Chinese characteristics. First, a new pattern has been formed in which the Party is in charge of macro-control, and the coordination and implementation of macro-control have been strengthened unprecedentedly; Second, on the basis of scientific research and judgment on the long-term trends and development laws of China's economy and the world economy, the macro-control framework under the new normal of economic development is proposed; The third is to formulate and implement short-term macro-control according to the national medium and long-term development planning goals and economic reform goals, so that short-term macro-control can maintain strategic concentration, thus ensuring the effective combination of short-term and long-term policies; Fourth, it innovated the traditional macro policy tools, and optimized the micro foundation and institutional environment for the implementation of macroeconomic policies by comprehensively deepening the reform; Fifth, according to the main contradictions and problems faced by the macro-economy, we timely promoted the supply side structural reform, and innovated and improved the macro-control system of socialism with Chinese characteristics; Sixth, we have formed a "progress while maintaining stability" general basis and coordination method for macro-control work, which ensures that there will be no excessive understanding and operation in the process of macro situation judgment, macro strategy grasp, macro policy selection and implementation.
Since the 18th National Congress of the Communist Party of China, China's macro-economy has made important historical achievements in such fields as "stabilizing growth", "preventing risks", "adjusting structure", "promoting reform" and "benefiting people's livelihood". From the perspective of stable growth and risk prevention, China's economy has not only withstood the impact of various international adverse factors, but more importantly, on the basis of achieving an average annual economic growth rate of 7.1% and a total GDP of 82.7 trillion yuan, it has successfully overcome the problem of declining industrial economic growth. Its economic strength has reached a new level, and the level of macro debt has been effectively controlled. From the perspective of international comparison, China's economy accounts for more than 15% of the world's GDP, its economic growth rate is close to three times of the world's economic growth rate, and its contribution to the world's economic growth rate is more than 30%; The country's foreign exchange reserves exceeded 3 trillion US dollars, ranking first in the world; The mileage of high-speed railway reached 22000 kilometers, exceeding the sum of the second to tenth countries; The output of more than 200 industrial products, such as steel and automobiles, ranks first in the world... From the perspective of structural adjustment, China's economic structure is making great strides towards a more optimized direction. The contribution rate of consumption increased from 54.9% to 58.8%, and the proportion of service industry increased from 45.3% to 51.6%. The equipment manufacturing industry and high-tech industry continued to maintain double-digit growth, and the real economic structure improved significantly. From the perspective of promoting reform, we have not only promoted more than 100 reform issues in the economic field, made major breakthroughs in some key and basic reforms, but also solved many difficulties and focus problems in economic operation under the guidance of the supply side structural reform, playing a key role in improving the efficiency of market resource allocation and improving total factor productivity. From the perspective of benefiting people's livelihood, more than 66 million new urban jobs were created, the average annual growth of residents' income was 7.4%, exceeding the economic growth rate, the number of poor people decreased by more than 68 million, and the level of people's welfare was greatly improved.
The above achievements fully prove the correctness of the CPC Central Committee with Comrade Xi Jinping at the core in judging the macroeconomic situation, adjusting the macro-control thinking, innovating the macro policy tools and making macro decisions at critical moments, and the constantly improving China's macro-control system under the guidance of Xi Jinping's thought on socialist economy with Chinese characteristics for a new era, It will certainly be able to solve various problems facing China's macro-economy. Of course, we should also see that although the efficiency of China's macro-control has been greatly improved, it still faces problems such as poor transmission channels. In the future, we need to further innovate and improve the macro-control system, and create a good environment for the effective implementation of macro-control through deepening basic reform. As long as we maintain our strategic focus, adhere to the general tone of seeking progress while maintaining stability, take the supply side structural reform as the main line, and comprehensively deepen reform and opening up, China's economy will certainly usher in a brighter development prospect.
(The author introduces: Vice President of Renmin University of China.)
