Editor’s note: 2020 is the year of building a well-off society in an all-round way and ending the 13th Five-Year Plan. In the face of the complicated situation that risks and challenges at home and abroad are obviously rising, how can China achieve high-quality economic development in the new year? How to activate dormant development potential?
Many experts and scholars believe that we should not only see that China is in the key period of transforming the development mode, optimizing the economic structure and transforming the growth momentum, but also see that we have a solid material and technical foundation accumulated for a long time, a super-large-scale market advantage and domestic demand potential, and huge human capital and talent resources. In the future, we will be able to overcome all kinds of risk challenges, and China’s economy will be even more splendid.
Feng Qiaobin, Deputy Director of Macroeconomic Research Department of the State Council Development Research Center:
The characteristics of economic "gaining momentum" are very obvious
Looking forward to 2020, the external environment of China’s economic growth is still complex and severe.
From the international environment, 2020 is still in a long-term bottoming period, and the world pattern is uncertain.
From the internal environment, the supply-side factors that determine China’s long-term growth have undergone major changes, and the potential economic growth rate has declined. The new kinetic energy represented by the digital economy is growing rapidly, but it is still in a small and scattered stage compared with the traditional kinetic energy. From the demand side, the import and export are unstable, the consumption is stable and slightly slow, the investment has declined, and the pulling force of the "troika" has weakened.
More importantly, there are many optimistic and positive factors in China’s economic growth in 2020. Since the end of 2019, countries have taken a series of measures to stimulate and boost the recession, such as the Federal Reserve’s three consecutive interest rate cuts and Japan’s fiscal stimulus plan. These measures are expected to produce practical results in early 2020. At the same time, China is still in the middle and late stage of industrialization and urbanization, the historical depth of economic development is still broad, the supply-side factor conditions continue to upgrade, and the demographic dividend is being transformed into talent dividend and engineer dividend. At the same time, funds are abundant, scientific and technological innovation is changing with each passing day, and the digital economy is moving towards traditional manufacturing, and the whole economy is very obvious.
Therefore, the main task of macroeconomic management in 2020 is to continue to create and maintain the overall environment for balanced economic operation. It is necessary to maintain a normal mind about the speed of economic growth, not to be overly worried about short-term fluctuations, and to take more measures to ensure that the macroeconomic operation is in a reasonable range of around 6%.
In terms of fiscal policy, we should continue to implement the policy of reducing taxes and fees, and further activate the endogenous motivation of market players. We will issue 3.15 trillion yuan of local government special bonds and launch a number of large projects such as sichuan-tibet railway, which will effectively stabilize the stable operation of China’s economy from the investment side.
In terms of monetary policy, while maintaining a reasonable and abundant liquidity, efforts should be made to unblock the transmission mechanism of monetary policy and effectively alleviate the problem of financing difficulties for private enterprises.
In addition, strengthen the coordination among fiscal policy, monetary policy, industrial policy, regional policy and employment policy, ensure that China’s economy operates in a reasonable range, create conditions for promoting reform, restructuring and preventing risks, and turn to high-quality development at an early date, successfully complete the tasks of the 13 th Five-Year Plan and the year of building a well-off society in an all-round way, and lay a solid foundation for opening a new journey of modernization.
(Reporter Lin Huocan finishing)
Zhao Ping, researcher of China Council for the Promotion of International Trade Research Institute:
The upgrading of consumption structure has been enhanced.
In 2020, the global economy is expected to achieve recovery growth, China’s economy will remain stable and positive, the business environment will continue to improve, the system and mechanism of consumption growth will be further improved, the factors restricting consumption growth will be alleviated, and new consumption highlights will continue to emerge. The annual consumption growth will continue to improve, which will play a fundamental role in the rational growth of economic aggregate and the steady improvement of development quality.
From the international situation, global economic growth will be better than that in 2019. According to the forecast of the International Monetary Fund, the uncertain factors of economic growth in emerging economies will fade in 2020, which can offset the negative impact of the slowdown of capital expenditure in developed economies and drive the global economic growth to rebound. It is estimated that the global economic growth rate will increase from 3% in 2019 to 3.6% in 2020, and the global trade growth will return to 3.2%. The warmer global economic situation is conducive to enhancing the supporting role of China’s export-oriented economy in domestic consumption growth.
From a policy perspective, the institutional mechanism for promoting consumption growth will be more perfect. In 2020, the country will still attach importance to giving full play to the basic role of consumption. The Central Economic Work Conference clearly stated that it is necessary to guide funds to invest in advanced manufacturing, people’s livelihood construction, infrastructure shortcomings and other fields that benefit both supply and demand, and promote the "double upgrade" of industry and consumption. This is to promote consumption upgrading through the improvement of supply quality and level, so as to smooth the economic cycle between supply and consumption and ensure a smoother consumption growth mechanism.
From the perspective of consumption growth, new consumption highlights continue to appear. From January to November 2019, the total retail sales of social consumer goods increased by 8.0% year-on-year. After deducting automobile consumption, the growth rate of retail sales of consumer goods can reach 9.0%. Due to the continuous decline of automobile consumption in 2019, the accelerated adjustment of automobile industry structure and the increasing ability to adapt to consumer demand, the year-on-year decline of automobile consumption in 2020 is expected to narrow, or even turn from negative to positive.
At the same time, the motivation for upgrading the consumption structure continues to increase. The overall consumption structure will still maintain the pattern of two-wheel drive of commodity consumption and service consumption. Among them, within the commodity consumption, the characteristics of quality, individuality and diversification are more prominent. While consumers get material satisfaction, they have higher and higher demand for spirit. Pursuing both internal and external cultivation through consumption behavior will become a new trend of consumption. Compared with commodity consumption, the growth rate and proportion of service consumption continue to increase, especially the consumption of transportation, communication, education, culture, entertainment and medical care will still maintain high growth, and the growth rate will be higher than the total retail sales of consumer goods in the same period.
(Reporter Feng Qiyu finishing)
Zhu Caihua, Deputy Director of Foreign Trade Institute of International Trade and Economic Cooperation Research Institute of Ministry of Commerce:
Strong foreign trade foundation and strong toughness.
In 2019, China’s foreign trade showed strong resilience and maintained a stable operation in general, under the pressure of economic transformation and the headwind of protectionism. Looking forward to 2020, China’s foreign trade situation is still grim, but its resilience remains the same.
First of all, Sino-US economic and trade friction and global value chain reconstruction are still the biggest risks. At present, China and the United States have reached an agreement on the text of the first phase agreement, and the United States has promised to cancel some of the proposed tariffs and tariffs imposed on China. This will help to temporarily improve the bilateral trade between China and the United States. However, it is undeniable that the tariff increase that has not been completely eliminated will still affect the development of bilateral trade between China and the United States, and the uncertainty of US trade policy toward China will bring the risk of global value chain reconstruction.
Secondly, global economic growth will pick up and the external market environment will tend to improve. According to the forecast of the International Monetary Fund (IMF), the global economy will grow by 3.0% in 2019, which is the weakest year since the international financial crisis. In 2020, it will go out of the bottom and reach 3.4%. If China and the United States can eliminate all tariff increases, this year’s economic growth forecast is expected to be further raised. In addition, the growth expectations of emerging economies, including Argentina, Turkey, Brazil, Mexico and Russia, have improved significantly, providing a good external environment for market diversification.
Thirdly, the adjustment of domestic industrial structure is accelerating, and new kinetic energy will provide strong help. At present, China’s economy is transforming from a high-speed growth stage to a high-quality development stage, and a new round of scientific and technological revolution and industrial transformation continues to deepen. The newly revised Guiding Catalogue of Industrial Structure Adjustment (2019 edition) issued by the National Development and Reform Commission puts the high-quality development of manufacturing industry in a more prominent position, and at the same time emphasizes accelerating the transformation and upgrading of traditional industries and vigorously cultivating and developing emerging industries. This will certainly help the foreign trade industry to change birds, provide new kinetic energy for China’s foreign trade development, and effectively hedge the risks brought about by the transfer of some manufacturing industries.
Finally, the measures of "stabilizing foreign trade" continue to land, and the policy effect will be further revealed. In 2019, various "stable foreign trade" policies and measures were introduced in time and effectively landed, which contributed to maintaining a stable operation of foreign trade as a whole. In 2020, the effect of the policy of reducing fees and taxes will continue to appear and the business environment will continue to improve. A series of policies provide all-round and guiding practical guidance and policy framework for China’s foreign trade to achieve high-quality development, which will help to further lay a solid foundation, enhance motivation and expand depth for foreign trade development in 2020.
(Reporter Feng Qiyu finishing)
Li Changan, Professor of university of international business and economics School of Public Administration:
Achieve fuller and higher quality employment.
2020 is the year to build a well-off society in an all-round way, and it is also the decisive year to achieve the goal of the first century.
Employment is the greatest livelihood. Doing a good job in employment is the premise of ensuring the smooth realization of various economic and social development goals and the objective requirement of practicing the people-centered purpose.
In the new year, China’s employment work is facing both rare opportunities and great challenges. The increasingly complex domestic and international situation has brought great uncertainty to the stable development of China’s economy and society, and also brought great difficulties to stabilizing employment. We must be soberly aware that insufficient employment and low quality of employment are the main contradictions in China’s employment field for a long time at present and in the future, and the problem of insufficient employment still exists. At present, judging from the registered unemployment rate in cities and towns and the survey unemployment rate indicators, employment has remained basically stable as a whole. However, this does not mean that the employment pressure will be reduced.
In terms of labor supply, China’s urban labor supply will still exceed 15 million in 2020, including about 8.5 million college graduates, plus vocational school graduates and those who will not continue their studies after junior high school and high school, about 7 million people. In addition, nearly 10 million rural laborers are transferred every year, and together with nearly one million urban laborers who are re-employed, the total supply of employment is still very large, and the contradiction between supply and demand is more prominent.
At the same time, the problem of low employment quality is more prominent. Although the quality of employment in China has been improved in recent years, the low quality of employment is still a prominent contradiction in the field of labor and employment. This is mainly manifested in the low average wage level of workers, persistent wage arrears, unstable employment, imperfect social security and long working hours. Some workers have a low sense of acquisition, and it is a long way to go to achieve decent employment.
To meet the challenge, we must firmly grasp the main contradiction and solve the key problems in the field of employment in the next step of employment work. First of all, we should continue to implement the employment priority policy and realize the coordination between the employment policy and other macro-control policies; Secondly, continue to tap the potential of expanding employment and increase employment opportunities in high-quality development and economic restructuring and upgrading; Finally, we attach great importance to the education and training of the labor force and improve the ability of workers to adapt to changes in the labor market. In this way, the goal of promoting full and higher quality employment can be successfully achieved.
(Reporter Han Bingzhi finishing)
Guo Liyan, Researcher, Institute of Market and Price, China Macroeconomic Research Institute:
There is no basis for overall price increase.
From the macro-economic fundamentals, the transformation of old and new kinetic energy of China economy is obviously accelerated, the resilience and vitality of the domestic market are further enhanced, and the economy achieves a dynamic balance between supply and demand at a higher level, which is the key cornerstone for maintaining a stable overall price level. Domestic industrial and agricultural production is stable, the market supply is sufficient, the main grain income is increased, apples, pears and other fruits are high, and the supply capacity of vegetables continues to grow. Although the scale of pig slaughter has declined, the overall supply of meat protein is stable, and there is no basis for overall price increase.
At present, the pork reserve has maintained considerable strength and rhythm, the import of meat has been accelerated, the market circulation and supply channels have been fully unblocked, and an efficient and effective combination boxing has been played. In December 2019, the probability of the growth rate of pork prices turning from positive to negative is very high. This is a positive signal released after taking multiple measures to increase the efforts to ensure supply and stabilize prices. In addition, considering the factors such as consumption substitution, the seasonal increase of consumption in 2020 will be obviously less than that in previous years, and it is expected that the price of pork and other meat will hardly continue to rise sharply in the first half of 2020.
Taking all factors into account, it is predicted that the overall situation of stable price operation in 2020 is completely predictable, and the CPI is likely to show a trend of high before and low after. In the first half of the year, the high tail-warping has a greater impact, which may support the CPI to run at a higher level, especially when the Spring Festival is in January. The Spring Festival effect will lift the year-on-year increase of CPI at the beginning of the year, but the new price increase range is controllable. The annual CPI increase may be slightly higher than that in 2019, and the core CPI excluding food and energy will remain stable.
From the PPI point of view, at this stage, the supply-side structural reform has entered the stage of consolidating and establishing a long-term mechanism. The price increase effect caused by accelerated supply contraction such as quantitative de-capacity and environmental protection and limited production in the early stage has basically been released. In addition, due to the downward fluctuation of international commodity prices, it is expected that the prices of upstream industrial raw materials will remain at a low level for some time in the future. At present, the counter-cyclical adjustment policy is making efforts to improve efficiency, which has played a positive role in boosting infrastructure, especially new infrastructure, stabilizing social investment and residents’ consumption expectations. The downstream industrial demand and construction demand have picked up regionally, which has led to a phased increase in the prices of some industrial products such as building materials. It is expected that the PPI will show a slight rebound in 2020 and will remain stable overall.
(Reporter Lin Huocan finishing)
Ni Pengfei, Director of Urban and Competitiveness Research Center of China Academy of Social Sciences:
The property market will operate within a reasonable range.
On the whole, on the basis of 2019, the property market will remain in a reasonable range in 2020, and the trend of "steady seasonal change and continuous differentiation" will not change.
First of all, there will be no drastic fluctuations in the property market in 2020 without a major policy shift. At present, the interest mechanism of real estate speculation has not been completely eliminated, and financial institutions still tend to invest their funds in the real estate field. At the same time, due to the relatively few investment tools and the lack of export of residents’ funds, some people still use real estate as a hedge tool. Judging from the trend of the real estate market, the existing problems and the impact of the property market on the macro economy, the determination of the state to regulate the property market will not change, and the regulation will not be relaxed in 2020. In the future, with the improvement of regulation system and mechanism, the real estate market will continue to operate within a reasonable range.
Secondly, the property market will have ups and downs and fluctuations in individual time periods. In individual months, house prices may increase to some extent, but there may also be negative growth in a certain period of time. In addition, real estate investment may continue to maintain the trend of high before and low after many years. On the one hand, the property market will be in fluctuation due to the impact of external environment, changes in its supply and demand relationship and expected changes. On the other hand, in order to ensure the stable and healthy development of the real estate market, the regulatory policies will be continuously fine-tuned according to the current or future possible changes in the property market — — When the market rises to a certain extent, the regulation will be overweight; When the market drops to a certain extent, the regulation will be relaxed.
At the same time, from a spatial perspective, cities will continue to differentiate. For first-and second-tier cities, the upward pressure on the property market will increase in 2020, and the growth rate of prices, sales and investment will fluctuate. However, for third-and fourth-tier cities, the downward pressure on the property market will be further enhanced, and inventory may increase again. It is worth noting that the economy and population of first-and second-tier cities, metropolitan areas, cities with special resources, cities with four or five lines and below, and cities with exhausted resources will continue to differentiate.
In addition, from the perspective of real estate market risks, the overall decline is controllable. But at the same time, there is also the possibility of risk amplification in individual areas, links, subjects and regions of the property market. (Reporter Wang Yuchen finishing)
