How to develop the economy in the second half of the year

 How to develop the economy in the second half of the year

Economic resilience and challenges

With Chinas scientific coordination of the normalization of epidemic prevention and control and economic and social development, the order of production and living has gradually recovered. The GDP growth rate in the second quarter turned from negative to positive, with a year-on-year growth of 3.2%, reversing the situation of a 6.8% decline in the first quarter. The main economic indicators showed significant marginal improvement, showing the strong resilience and anti risk ability of Chinas economy.

With regard to the economic trend in the second half of the year, a number of institutions have made optimistic predictions, believing that with the continuous weakening of the impact of the domestic epidemic situation, the full implementation of macro policies and the continuous improvement of market expectations, the process of economic recovery will be significantly accelerated, and the annual economic growth rate is expected to reach about 3%.

Liu Zhe, a specially invited researcher at the China Financial Research Center of Southwest University of Finance and economics, told the first finance and economics reporter that the data of macro investment, consumption and export in the second quarter, together with the electricity consumption and coal consumption of micro industrial enterprises, confirmed the positive trend of economic margin, and at the same time, there were some structural problems to be concerned about.

According to Liu Zhes analysis, the recovery of consumption is slower than supply; compared with infrastructure real estate, the recovery of manufacturing investment is slower; compared with government led projects, the recovery of private investment is still relatively slow; compared with large and medium-sized enterprises, the operation of small enterprises is still relatively difficult, and their confidence and expectation need to be further improved; compared with industry, the recovery of service industry is slower.

Wang Jun, chief economist of Zhongyuan bank and member of Academic Committee of China International Economic Exchange Center, told reporters of China finance and economics that the main problem of current economic recovery is insufficient effective domestic demand, which leads to weak endogenous power of future economic recovery. In addition, the survival and development dilemma faced by small and medium-sized enterprises and low-income groups will still exist for a long time due to the impact of the epidemic. The uncertainty of external environment is also one of the risks of economic operation in the second half of the year. For example, some geopolitical risks are rising, which will interfere with the economic operation and form a certain resistance to the slope of economic recovery.

Although novel coronavirus pneumonia exacerbates the downward trend of the world economy, the fundamentals of our economy have not changed for a long time. The advantages of super large-scale economy lay the foundation for long-term development. Chinas economic development has great resilience and potential. There is still a huge room for maneuver in the economy, and the growth momentum is still strong. We will continue to maintain stable and healthy development in the future.

Zhang Liqun, a researcher at the Macroeconomic Research Department of the development research center of the State Council, analyzed the first finance and economics that Chinas economy has maintained a relatively obvious sustained recovery and recovery trend under the severe impact of the epidemic. The external environment faced by the second half of the year is still quite severe. We must establish a bottom line thinking, focus on ourselves, and consider seeking Chinas development in a more turbulent, more uncertain and unstable world economic environment.

Boosting domestic demand

Under the epidemic situation, domestic consumption was significantly impacted, and the year-on-year growth rate of total retail sales of social consumer goods dropped to - 20.5% from January to February, the most serious period of the epidemic. With the improvement of epidemic prevention and control in the second quarter, domestic production resumed and consumption was restarted.

According to the latest data released by the National Bureau of statistics, market sales have gradually improved. In the first half of the year, the total retail sales of consumer goods reached 17225.6 billion yuan, down 11.4% year on year. In June, the total retail sales of consumer goods totaled 3352.6 billion yuan, a year-on-year decrease of 1.8%, a decrease of 1 percentage point compared with that in May.

Although Chinas consumption has rebounded in recent two months, combined with online consumption data, it can be found that there are still some unbalanced characteristics in the current consumption rebound. The impact of the epidemic on low-level cities, some central and western provinces and low-income groups is more obvious, and the recovery of consumption is relatively slow.

Liu Aihua, spokesman of the National Bureau of statistics and director of the Department of comprehensive statistics of the national economy, said at the press conference of the office of the State Council of statistics on July 16 that the total retail sales of consumer goods in the first half of the year were still in a downward range, indicating that the recovery of consumption is still facing constraints. Especially under the condition of normal epidemic prevention and control, some aggregation and contact consumption activities are still subject to certain restrictions At present, commodity retail and catering income is still in the trend of recovery growth.

It is worth mentioning that in the first half of the year, the per capita disposable income of the whole country increased positively in nominal terms, but actually decreased by 1.3%. Therefore, greater efforts should be made to expand consumption.

Zhang Liqun told first finance and economics that from the perspective of economic work in the second half of the year, the most important thing is to implement the strategy of expanding domestic demand, further form a joint force in expanding domestic demand with positive fiscal policy and stable monetary policy, and further fully release the huge potential of the super large-scale domestic market.

Consumption is the first engine to drive Chinas economy. In 2019, the contribution rate of final consumption expenditure to GDP growth is 57.8%. At present, with the spread of overseas epidemic situation, Chinas major commodity exports have dropped significantly. Under the prospect of weak external demand, domestic demand has become the key to support Chinas economic growth.

Liu zhe told reporters of the first finance and economics that the economy will enter the stage of stable recovery from rapid recession and strong rebound in the second half of the year. The main risk in the second half of the year comes from the disequilibrium of economic recovery, for example, the recovery of consumption is slower than that of supply. It depends on the policys function of stimulating supply and demand, and the effect of fiscal policy on the recovery of supply and demand.

Wang Yiming, former deputy director of the development research center of the State Council, recently said in the media that in order to avoid the economy falling into the cycle of weakening demand, increasing inventory and slowing supply expansion, the focus of macro policy needs to speed up the resumption of work and production at the supply side, smooth the supply chain, and gradually shift to expanding domestic effective demand.

Wang Yiming said that in the second half of the year, more measures should be taken to boost consumption demand, such as stabilizing employment and ensuring peoples livelihood, increasing subsidies and stimulating consumption policies for low-income families, improving residents willingness and ability to consume, speeding up the resumption of business and market of catering, shopping malls, culture, tourism and other life services, promoting the integration of online and offline, and accelerating the recovery of consumer demand u3002

Insurance market subject

In the market economy, the enterprise as the main body of the market is of great significance to the economic and social development. In the economic recovery period of the post epidemic era, the performance of the enterprise is particularly critical.

Protecting the market subject is one of the governments six guarantees work. Recently, the central government held an entrepreneur forum to release the strongest voice of the market subject.

When hitherto unknown novel coronavirus pneumonia was introduced to China in July 21st, Xi Jinping, chairman of the CPC Central Committee and chairman of the Central Military Commission, held a forum in Beijing. The stress of the new crown pneumonia epidemic on Chinas economy and the world economy was faced with unprecedented pressure on many market players. The main body of market is the carrier of economic power, and the guarantee of market subject is the guarantee of social productivity. We should do everything possible to protect market entities, stimulate their vitality, carry forward entrepreneurship, promote enterprises to play a greater role, achieve greater development, and accumulate basic strength for economic development.

The above-mentioned meeting pointed out that it is necessary to increase policy support, stimulate the vitality of market entities, so that the majority of market entities can not only survive normally, but also achieve greater development. First, it is necessary to implement the policy of helping enterprises, second, to create a market-oriented, legalized and international business environment, third, to build a pro Qing relationship between government and business, and fourth, to attach great importance to supporting the development of individual businesses.

Huang Zhiling, chief economist of China Construction Bank, said that enterprises are the microcosmic main body of market economy. If enterprises live, market economy will flourish. Enterprise reform has always been the top priority of economic reform. For Chinese private enterprises, it is urgent to establish a perfect modern governance system. At the same time, we should strengthen the guidance of the spirit of contract, encourage private enterprises to abide by the law in good faith, and prevent the formation of a vicious circle of soft constraint of credit of private enterprises and dare not lend of financial institutions. For the state-owned enterprises, we should improve the incentive mechanism as soon as possible and formulate a scientific evaluation system.

Xin Guobin, Vice Minister of the Ministry of industry and information technology, said at the press conference of the State Council of information technology on July 23 that small and medium-sized enterprises are the main force to protect productivity, the main channel to stabilize employment, an important link to ensure the stability of the industrial chain, and the key to ensure the main body of the market. Whether we can keep the small and medium-sized enterprises is really related to whether we can ensure the stable and healthy development of the whole economy.

Under the impact of the epidemic, it is a very serious problem for SMEs to break the capital chain. The Ministry of industry and information technology (MIIT) has further strengthened efforts to clear and standardize enterprise related charges. In the first half of the year, it has paid off 82.7 billion yuan of undisputed accounts between government departments and large state-owned enterprises, and the repayment progress has reached 49.5%. Basically, half of the time has been achieved, and more than half of the task has been completed. All non divergent debts less than 5 million yuan have been cleared.

With the implementation of various preferential policies for enterprises, SMEs have overcome the impact of the epidemic and accelerated their recovery and development. According to the data of the National Bureau of statistics, the operation of small and medium-sized enterprises has obviously recovered. In the first half of the year, the production decline rate of small and medium-sized enterprises above the scale was 10.3 percentage points lower than that in the first quarter, and the profit decline rate in the first five months was 21.7 percentage points lower than that in the first quarter.

In addition, a good business environment is also the basis for protecting the main body of the market. Huang Zhiling said that the central and local governments should continue to streamline administration and decentralization, reduce administrative examination and approval matters, and reduce direct government intervention in the market mechanism. The central government should strengthen mechanism construction, implement various laws and regulations, and strengthen supervision and management; local governments should maintain a good business environment, actively guide private enterprises and foreign-funded enterprises to invest, and do a good job in enterprise services.