Wei Jie: this years GDP is driven by investment in the metropolitan area

category:Finance
 Wei Jie: this years GDP is driven by investment in the metropolitan area


Wei Jie thinks that human beings are aggregation animals, only aggregation can have investment and consumption. In the past, urbanization emphasized the coordinated development of large and medium-sized cities, while in the past two years, more emphasis was placed on metropolitan area, because people finally found that the investment and consumption efficiency of metropolitan area is better than the development mode of small and medium-sized cities, the highest investment benefit is metropolitan area, and the multiplier effect of consumption is also in metropolitan area.

However, Wei Jie also reminded that although the metropolitan area is the biggest investment opportunity, we should not blindly spread and rush forward, but we should emphasize the focus and order of investment. We should start investment from the Yangtze River Delta metropolitan area, the Pearl River Delta metropolitan area, the Beijing Tianjin Hebei metropolitan area and the Chengdu Chongqing metropolitan area, and then gradually expand to other metropolitan areas and urban agglomerations.

Wei Jie explained that the inter city of the Pearl River Delta metropolitan area should be densified. At present, Guangzhou to Shenzhen is still a high-speed railway, not a subway, nor an urban light rail; the integration of three provinces and one city in the Yangtze River delta still needs to be accelerated; there is still room for the construction of the traffic network in the Beijing Tianjin Hebei metropolitan area, Chengdu Chongqing metropolitan area, and the smooth internal and external connections. Between 2021 and 2022, we should first make four metropolitan areas, and then make urban areas in other regions, so that the money supply and financial strength can be guaranteed..

The biggest investment opportunity is the metropolitan area

Recently, the call for investment in the metropolitan area has been growing. Weijie said that to promote the infrastructure construction of the metropolitan area, this plate is very big and the pulling effect is obvious, which will have a huge effect on the entire investment. Some experts have calculated that the construction of metropolitan area will promote the growth of GDP 0.5% -1%u3002 It makes sense to add a metropolitan area to the traditional and new infrastructure.

Where people flow in, commerce, industry, capital market and real estate market must flourish, and where people flow out, they must decline. Ren Zeping, President of Evergrande Economic Research Institute, also pointed out that the process of migration of Chinese population to metropolitan areas is far from over.

Recently, at the video Forum on macro economic situation and reform trend in 2020 organized by the China Economic System Reform Research Association, many experts believed that in the next five to ten years, accelerating the development of metropolitan areas and urban agglomerations is the greatest development potential of Chinas economic growth. The construction of metropolitan area can provide at least 0.5 to 1 percentage point of growth momentum for the national economic growth every year, which can not only repair the economy, but also provide support for the medium speed and high-quality development for quite a long period in the future. Liu Shijin, deputy director of the Economic Committee of the CPPCC National Committee and former deputy director of the development research center of the State Council, said that in the next five to ten years, accelerating the development of metropolitan areas and urban agglomerations will be the biggest structural potential of Chinas economic growth, the new outlet for Chinas economic growth, and Liu Shijin believed that if we invest in metropolitan areas, there is little chance of mistakes.. He also estimated that in the next decade, the construction of the metropolitan area can provide at least 0.5 to 1 percentage point of growth momentum for the national economic growth every year.

According to the international experience, the large and medium-sized cities and their urban agglomerations that usually drive the national economic growth are usually 1-10 million. Compared with other countries, the agglomeration effect of Chinese population in big cities is still insufficient. According to the data of the world bank, in 2018, the proportion of population in urban agglomerations with a population of more than one million accounted for only 28% of the countrys population, far less than the population aggregation of Japan (65%) and South Korea (50%).

According to Wei Jie and other experts, consumption is the top contributor to GDP in 2019, and investment is the largest contributor in 2020 and 2021. As the economy recovers, consumption returns to the role of the first driver.

The order of repairing economy and stimulating economy should not be confused

So, how to deal with the short-term recession of Chinas economy? Wei Jie put forward three stages theory.

The first stage, from January to the third quarter of this year, is the stage of repairing the economy. There must be a repair process because of the economic pressure caused by shutdown, production suspension and business suspension. So, I dont advocate that we should start with stimulating the economy by repairing the economy, just like a person suffering from a serious illness who has just wheezed, cant make up for it, and there may be problems with it.. In the stage of economic restoration, the main objectives of macro policies are six guarantees: Peoples livelihood, employment, market main body, industrial chain, supply chain, food and energy security, and grass-roots operation. This is the core of macro in this stage.

Wei Jie put forward three main ways to repair the economy: first, to reduce taxes. In the first quarter, the state finance reduced and exempted more than 700 billion yuan of taxes and fees for enterprises. In the second quarter, we should continue to reduce and remit taxes according to the quota. Some service industries cant start construction for a long time, and the tax reduction and remit can continue to the third quarter. Second, subsidies for enterprises and individuals. Many enterprises shut down, but the employees wages are paid and the cost of production factors is paid. As the pressure of enterprises increases sharply, the government should increase subsidies. Subsidies should also be provided to the unemployed and the poor. Third, maintain sufficient liquidity and reduce interest rates to help enterprises overcome difficulties.

The second stage is stimulating the economy. Stimulating the economy should be launched in the fourth quarter of this year. In this years Troika to drive GDP growth, export and consumption have little role to play, and investment is the key point. Therefore, the core of stimulating economy should be to increase investment.

How to invest? Weijie suggested:

The first is the governments investment in public goods. On the one hand, it is the traditional infrastructure construction, that is, the so-called iron public base. There is still a lot of space for traditional infrastructure construction, especially for the infrastructure construction of the four metropolitan areas to be densified, and there is a huge investment space for the infrastructure of the metropolitan areas. On the other hand, the construction of public health system. In terms of the epidemic situation, Chinas public health system needs to increase investment.

Thirdly, the operational investment at the enterprise level. The investment focus is still on three major industries: 1. Strategic emerging industries. It mainly involves new energy, new materials, life bioengineering, information technology, new generation of new technology, energy conservation and environmental protection, new energy vehicles, artificial intelligence and high-end equipment manufacturing. 2. Modern manufacturing. There are six short boards in modern manufacturing industry: spacecraft and aircraft, high-speed rail, nuclear power, UHV power transmission and transformation equipment, CNC machine tools, modern ships and marine equipment. There is a large space for these six short boards. Finally, the service industry. For example, consumer services such as pension, housekeeping, medical and health care, great health, financial, commercial services, park management business services, film and television, music, drama, collection, intangible cultural heritage, museum, a series of so-called leisure tourism and other financial products and cultural services.

Wei Jie estimated that if the stimulus policy was introduced in the fourth quarter and the funds were in place as scheduled, the effect of investment pulling in the first half of 2021 would appear.

The third stage is to deepen reform. Ultimately, Chinas development depends on reform.. Especially in the second half of 2021, reform should be the theme, and further deepening reform should be the core. According to Wei Jie, there are three main directions of reform:

Second, the mixed economy. All kinds of economic components have their own advantages and characteristics. We should equally play the role of all kinds of economic components. Mixed economy is the direction. The most important thing in the mixed economy is to treat the private economy equally and protect all kinds of property rights equally in law.

Third, rule of law economy. The rule of law economy is the power source of the whole economy, so we must adhere to the rule of law economy, can not replace the law with the government, can not replace the law with the party, and should thoroughly move towards the rule of law economy. The handling and protection of all economic relations are based on the law. Only the economy under the rule of law has confidence and significance. Therefore, once Chinas economy enters the normal state through the stage of restoration and stimulation, it has to push forward reform. The direction of reform is market economy, mixed economy and rule of law economy. If we follow the three stages of repairing the economy, stimulating the economy and deepening reform, Chinas economy will surely overcome this difficulty. Once the investment is effective and China has entered a normal state, deepening reform can no longer be delayed, and should be promoted as soon as possible in the second and third quarters of 2021. Weijie said. Source: editor in charge of financial magazine: Chen Hequn ufe63 nb12679

Third, rule of law economy. The rule of law economy is the power source of the whole economy, so we must adhere to the rule of law economy, can not replace the law with the government, can not replace the law with the party, and should thoroughly move towards the rule of law economy. The handling and protection of all economic relations are based on the law. Only the economy under the rule of law has confidence and significance.

Therefore, once Chinas economy enters the normal state through the stage of restoration and stimulation, it has to push forward reform. The direction of reform is market economy, mixed economy and rule of law economy. If we follow the three stages of repairing the economy, stimulating the economy and deepening reform, Chinas economy will surely overcome this difficulty. Once the investment is effective and China has entered a normal state, deepening reform can no longer be delayed, and should be promoted as soon as possible in the second and third quarters of 2021. Weijie said.