Liu Yuanchun: over expected growth may give China an opportunity in the game of big powers

category:Finance
 Liu Yuanchun: over expected growth may give China an opportunity in the game of big powers


Liu Yuanchun

Chinas economic growth in the first three quarters is a miracle

It is a miracle that Chinas economy has been able to achieve overall positive growth in the first three quarters under the circumstances of the huge impact of the new epidemic and the overall reversal of the international situation. At present, the economies of all the major countries in the world do not dare to expect positive growth, but also continue to decline and shrink. A period ago, the US economy fell by 9.1% year-on-year, Indias economy declined by about 20%, and the British economy grew by 21%. At present, the growth rate of the developed countries is around - 10%. At present, China has been able to achieve the victory of epidemic prevention and control, and at the same time, it has played a good economic defense war, which proves that Chinas governance system and macro-control are powerful. At the same time, the resilience and resilience of Chinas economy are beyond the imagination of many people. In the first three quarters, the economy grew by 0.7% year-on-year, which shows the advantages of Chinas system, the flexibility of Chinas economy and the strength of Chinas model.

At present, since the package of stimulus policies issued in May has just been implemented for a quarter, the overall plan has not yet been fully launched, and the effect has not been fully demonstrated. Therefore, according to the expenditure structure of positive fiscal policy, the intensity of spending in the fourth quarter in the future will be stronger; at the same time, the profits of enterprises, especially those of some leading enterprises, have increased significantly According to the current situation of foreign demand, the probability of maintaining a positive growth trend in the fourth quarter is very large. Therefore, Chinas economy will continue to rise in both the supply side and the demand side in the fourth quarter. The economic growth rate in the fourth quarter will increase from 4.9% in the third quarter to about 6%. This trend will continue and will not change in the short term.

The government should strengthen the employment support for migrant workers and college graduates

In the first three quarters of this year, 8.98 million new urban employees have been created, which has reached 99.8% of the annual target. At present, Chinas overall employment market is among the best in the world. The first of Chinas six guarantees is to ensure employment. Therefore, China has taken a series of measures around employment protection. The first important measure is to ensure the recovery of economic entities and avoid the collapse of large-scale enterprises through various subsidies, credits and social policies. At present, China is the best in the world.

Second, through the positive fiscal policy and the package policy of expanding domestic demand, many domestic enterprises have been able to maintain growth and demand under the impact of the epidemic. In this process, many measures have been taken directly for employment. These measures seem to have worked, making Chinas national economy go smoothly after the suspension of the first quarter and the full resumption of work and production in the second quarter The smooth supply and demand of the national economy has laid a foundation for the stability of employment.

The employment problem of college graduates and migrant workers is a problem that they will face every year, which is very important. This year, colleges and universities have adopted the policy of expanding the proportion of postgraduate enrollment and the enrollment scale of vocational schools. At the same time, some state-owned enterprises and financial institutions have also expanded the employment content according to the national requirements, thus adopting the policy of counter cyclical adjustment in reemployment policy. Although the employment pressure is very high this year, the pressure is not very great from the perspective of the whole employment proportion reflected by many schools. On the one hand, it is necessary to continue to increase the counter cyclical adjustment of reemployment policy, and further introduce a series of supporting policies for college students employment, which is what we need to continue to do in the next step.

As for the problem of migrant workers going out to work, at present, some small and medium-sized enterprises, especially some service industries, have a low production situation, which directly leads to the reduction of the demand for migrant workers. Therefore, we can see that the total amount of rural migrant workers has decreased by 3.84 million in the first three quarters, a year-on-year decrease of 2.1%. This is indeed a great pressure on migrant workers. At present, the state should focus on providing assistance to small and medium-sized enterprises and labor-intensive service industries, so that they can maintain normal production and relatively normal employment demand. This is what we will continue to do in the fourth quarter and next year.

In addition, the government will help farmers and other low-income groups through continuous poverty alleviation projects, and at the same time, strengthen the labor demand for public construction to ensure that migrant workers can find a series of employment opportunities locally. Although the overall employment problem is relatively stable, there are still many explicit and implicit concerns, which are also the important reason for the governments continuous six guarantees policy Because.

Residents consumption in the fourth quarter will become normal

In terms of consumption, the per capita consumption expenditure of national residents in the first three quarters was 14923 yuan, a decrease of 3.5% in nominal terms and a decrease of 6.6% in real terms over the previous year. Because consumption is a slow variable, there will be a significant contraction under the impact of the epidemic. After the contraction, it will return to normal, which will be slower than the normal operation. At present, the consumption growth still hasnt turned positive. The important reasons for this are: first, the income has decreased, and the growth rate has decreased obviously. In the first three quarters of 2019, the average growth rate of residents disposable income is 9%, and this years average growth is only 3.9%. Whats more, the epidemic has brought about income differentiation. For some high-income groups, especially those with high salary and technology and capital gains, their income has not decreased. However, in the traditional service industry and the middle and low-end manufacturing industry, which have been seriously impacted by the epidemic, the income of workers has been greatly impacted, so the income of low-income people has declined faster In fact, the decline of consumption has accelerated, and the accelerated decline of the growth rate of the low-income class is actually a very important reason for the decline of overall consumption. But the second important reason is that under the current domestic and international environment and the impact of the epidemic situation, the overall residents awareness of risk prevention is increasing, and the uncertainty of the future is increasing, so the precautionary savings are on the rise in an all-round way. Taken together, although consumption has improved significantly, it is understandable that there is still no overall change to normal.

However, we should see the development trend of the next step. First, Chinas GDP growth rate will rise in an all-round way, which will provide a good support for the rise of residents income. Second, it is very important that a package of policies be in place, especially for the low-income groups with a large number of subsidies and transfer payments, and the final fight against poverty will have an obvious effect on the income support of the low-income groups. Third, if Chinas economy continues to turn to good luck, the peoples awareness of risk and prevention may be weakened. Fourth, the governments direct policies to promote consumption are carried out continuously and comprehensively. The spending situation of residents consumption in the fourth quarter is likely to become normal.

In the first three quarters, online retail sales increased by 9.7% year-on-year. The growth of online retail consumption in China has been a phenomenon for more than ten years, which is related to the revolution of Chinas circulation system and sales system, and is supported by the digital economy. This years epidemic has made the digital economy and non-contact economy rise against the trend, making many people realize that it is necessary to adopt non-contact and online purchase. First, the cost is low, the second is convenience, and the third is to avoid the spread of the epidemic. In the future, with the further implementation of the new infrastructure, the concept of consumption will be further changed. With the further construction of consumption platform and e-commerce platform, I think the sustained growth of online retail consumption should be expected.

In the first three quarters, Chinas disposable income increased by 3.9%. After deducting the actual growth of 0.6%, the per capita disposable income of urban residents decreased by 0.3%. A very important factor is that at present some income distribution policies mainly focus on poverty alleviation and subsidies for low-income groups. Therefore, after removing the price factor, the disposable income of rural residents has increased rapidly, which is the factor of income distribution policy. The second important factor is the price factor. The price factor in the city is 3.1, while the price growth in the rural area is 4.2, which is mainly due to the greater weight of the overall consumption in rural areas. These two factors are mainly responsible for the differences between rural areas and cities.

Investment growth will accelerate in the fourth quarter

In terms of investment, the investment in fixed assets in the first three quarters increased by 0.8% year on year, from negative to positive for the first time in the year. This data is relatively normal, in line with expectations. First, the change of fixed asset investment from January to September is an important mark point. Chinas investment has declined deeply in the first quarter. It is difficult to change this situation in the short term, because investment belongs to project planning and has a certain period.

Second, because a lot of investment is mainly concentrated in state-owned enterprises and government projects, they are the pioneers. However, due to the nature of the industry and investment space, the recovery of private investment is still lagging behind. As a result, the growth rate of the whole investment is not as fast as that of the industry, but it can be expected that there will be an acceleration effect in the next step.

Private investment is due to the depth of its industry and the enthusiasm of private entrepreneurs. Private enterprises must see that the whole market recovers and has stable expectations before making investment decisions. Private entrepreneurs investment expectations lag behind. State owned investment in this regard is mainly policy oriented, so they will take the first step. In terms of the recovery process, large-scale enterprises are first followed by small-sized enterprises, and state-owned enterprises are followed by private enterprises. The growth will have a slow recovery and accelerated rise. I think there may be an accelerated process in the fourth quarter.

From January to September, real estate increased by 5.6% year-on-year, which played a role in stabilizing the overall economy in this round of economic recovery. The recovery of real estate investment is the fastest of all investment recovery, which has a significant pulling effect on the economy, but at the same time, it does not want to excessively increase the financial burden of residents through the rise of real estate prices and the sharp rise of investment, and aggravate the residents debt ratio and overall debt. Therefore, the government has adopted a series of policies to stabilize house prices, stabilize land prices and stabilize expectations in the real estate industry The industry has adopted three red lines to restrict blind expansion. At present, we can see that the strong recovery in the first half of the year has a good stabilizing effect on Chinas overall economic recovery, but we must adhere to the strategic positioning that houses are used for living, not for speculation, and use the two stabilities to realize the relative stability of the real estate market.

The effect of export on economic growth is accidental

In terms of import and export, the import and export of goods and services boosted economic growth by 0.5% in the second quarter and 0.6% in the third quarter. The role of import and export in this years performance can be expected, because the spread mode of the epidemic situation in different countries and the progress gap of different countries in the epidemic prevention war have enabled China to play the advantages of the worlds manufacturing factory, providing a solid material foundation for the global epidemic prevention, and also providing a good help for the normal progress of the global epidemic situation. This is export There is an important reason for the positive growth.

Not only exports have shown positive growth, but foreign investment has also seen significant positive growth recently, which fully demonstrates the global position of Chinas economy, its key core role in the global industrial chain, and the resilience and resilience of Chinas industrial chain and supply chain, which plays a supporting role in maintaining Chinas economic operation much better than expected during the epidemic period this year. The governments various policies around foreign trade, such as supply chain and industrial chain, have laid a good foundation for the growth of foreign trade.

At present, in the context of the epidemic, the role of exports for economic growth has a certain contingency. In the future, with the improvement of the epidemic situation and the recovery of industrial chain supply chain in other countries, Chinas foreign trade may face a certain stage impact, but this impact will not be great. There may be some contraction in epidemic prevention and control, housing economy and product export. However, due to the recovery of bulk export of other manufactured products (especially complete sets of equipment and infrastructure equipment), China can still maintain a relative balance of foreign trade.

How to balance the status of consumption, investment, import and export in the contribution of GDP growth in the future: foreign trade itself needs to meet the changes of the whole world with a higher level of opening up. There are certain fluctuations in foreign trade. However, China should unswervingly implement the new development pattern with domestic circulation as the main factor and international and domestic dual circulation promoting each other. The deployment of this strategic thinking will fully stimulate our domestic economy Demand potential, especially the potential of Chinese consumption. In the future, consumption growth and investment growth in important industrial links stimulated by the adjustment of strategic layout can be expected. In the future, foreign demand will fluctuate, but domestic demand will continue to rise.

Consumption itself is not only a barometer of expectations and social environment, but more importantly, it depends on the reform of income distribution. Therefore, to expand consumption and stimulate consumption potential requires deeper institutional reform and more sustained consumption expansion policy to increase the price, rather than simply relying on the reversal brought about by the epidemic.

China may have an advantage in the game between big powers

The recovery of Chinas economy has certainly reached the expected level. According to the argument of the world bank and IMF, the recovery is beyond the expectation. This indeed shows Chinas ability of epidemic control and macro-control. It should be said that the recovery is beyond expectations, but it can not stop at present. In this round of competition, we must quickly transform from epidemic situation to normalization, so that China can take the lead in Sino US trade conflicts and big country game. As long as the economy continues to improve, it will be able to take the lead in the game of big powers.

If Chinas economy can grow by about 2.5% this year, while the U.S. economy will grow by about 5%, the difference will be about 8 percentage points. The 8 percentage points will lead to an increase in the proportion of Chinas GDP in the United States from 68% last year to about 74%, which will lead to some changes in the Sino US game.

China also faces many challenges.

Third, how to effectively connect the new development pattern of dual cycle with short-term epidemic prevention, six stability and six guarantees, which is a very important point facing China in the next step.

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