The Chinese economy has strong resilience to withstand shocks
-Interview with Liu Wei, President of the People's University of China
□ The Chinese government attaches great importance to epidemic prevention and control, and has taken firm and decisive measures in the early stages of the outbreak. Both the degree of the outbreak and the impact on economic growth are relatively low globally.
□ With the spread of foreign epidemics, China is facing the impact of the global economic recession, and employment pressure may continue for some time. Solving the problems of people's livelihood, such as employment, is the focus of maintaining economic stability, and is also where we need to pay special attention.
On April 17, the National Bureau of Statistics released the national economic operation data for the first quarter. According to preliminary calculations, the GDP in the first quarter fell by 6.8% year-on-year. How to view the current economic situation, a reporter from the Economic Daily interviewed Liu Wei, president of the People's University of China.
Reporter: In your opinion, how should you view the impact of the epidemic on economic growth this year? What challenges need to focus on?
Liu Wei: The epidemic has a huge impact on China and the global economy. Since the outbreak of the epidemic, major international institutions, governments and financial institutions in the world have constantly adjusted their expectations for economic growth under the epidemic, and there are major differences. The macroeconomic performance in the first quarter not only has an important reference value for China's next step in formulating economic policies, but also has important implications for the world.
We must face up to the impact of the epidemic on economic growth. Affected by the epidemic, China's GDP fell by 6.8% year-on-year in the first quarter, which was the lowest quarterly increase since reform and opening up. Among them, the secondary industry and the tertiary industry were greatly affected, falling by 9.6% and 5.2%, respectively, and the decline of the tertiary industry was lower than that of the secondary industry. From the perspective of total demand, the total retail sales of consumer goods and fixed asset investment fell by 19% and 16.1%, respectively, indicating that the epidemic has caused a great impact on the supply and demand of our economy.
It should be noted that the impact of the epidemic is worldwide, and it has caused a heavy blow to the economies of all countries. The Chinese government attaches great importance to epidemic prevention and control, and has taken resolute and decisive measures in the early stages of the outbreak. Both the degree of the outbreak and the impact on economic growth are relatively low globally.
According to the latest economic forecast published by the International Monetary Fund (IMF), global economic growth will drop to -3% in 2020. Among them, the decline rate of developed economies will reach 6.1%, the United States fell by 5.9%, the European Union fell by 7.1%; the growth rate of emerging markets and developing economies fell by 1%; the prediction of China's economic growth is a positive growth of 1.2%. At the same time, the IMF predicts that China's economy will grow by 9.2% in 2021. Regardless of the accuracy of the IMF forecast, it can be found that the international community has a basic consensus that the epidemic has a relatively small impact on China's economy. After the epidemic is over, our economy will also take the lead in recovery.
Employment and other livelihood issues are issues that require special attention in fighting the epidemic. In March of this year, the unemployment rate in China ’s urban survey was 5.9%, a decrease of 0.3 percentage points from the previous month. It should be noted that this data does not include the rural employment population and migrant workers, and the employment situation facing the whole society may be more severe. With the intensification of foreign epidemics, China is facing the impact of the global economic recession, and employment pressure may continue for some time. Solving the problems of people's livelihood, such as employment, is the focus of maintaining economic stability, and is also where we need to pay special attention.
Reporter: In your opinion, can our economy withstand the impact of the epidemic?
Liu Wei: With the joint efforts of the people across the country, China has achieved initial success in fighting the epidemic. We have full confidence that we can overcome the impact of the epidemic on our economy.
First, the Chinese economy has always been very resilient. From the perspective of historical experience, China's economy has shown good resilience in all global and regional economic crises, and there has also been relatively rapid development after the crisis. Compared with other countries in the world, the more difficult the economy, the better the economic performance of our country.
After overcoming the Asian financial crisis in 1997, China's economy has ushered in a golden period of high growth and low inflation for nearly 10 years. After overcoming the international financial crisis in 2008, China surpassed Japan in 2010 and became the second largest economy in the world. In 2010, China's total GDP was only equivalent to 40.4% of the United States, but by 2019 China's GDP was already equivalent to 67% of the United States.
Second, compared with last month, some important economic indicators are actively improving. In terms of resumption of production, industrial enterprises above the designated size have basically achieved relatively comprehensive resumption of production. In March, the added value of industries above designated size fell slightly by 1.1% year-on-year, a sharp decrease of 12.4 percentage points from the previous two months. The output level of industries above designated size basically recovered to the level of the same period last year.
In terms of protecting residents' lives, the per capita disposable income of residents in the first quarter was 8,561 yuan, a nominal increase of 0.8% year-on-year. We note that the nominal GDP in the first quarter was about 20.6 trillion yuan, a year-on-year decline. While the growth rate of nominal GDP declined, not only did not the per capita disposable income drop, but a slight increase, this shows that the party and government attach great importance to people's livelihood during the epidemic prevention and control period.
Due to the rapid growth of consumer price levels in the first quarter year-on-year, the actual income of residents fell by 3.9 percentage points after deducting price factors, but as the price level gradually stabilized, the actual growth rate of disposable income of residents will further rebound. According to the latest data, the year-on-year growth rate of the consumer price index in March has dropped from 5.2% in February to 4.3%. As hog production and the supply capacity of the food industry improve, the price level will further stabilize.
Reporter: This year is a crucial year for China to build a well-off society in an all-round way and achieve the goal of its first century of struggle. In your opinion, how to promote the prevention and control of epidemic situation and economic and social development as a whole, and strive to achieve this year's economic and social development goals and tasks?
Liu Wei: General Secretary Xi Jinping pointed out that solidarity and cooperation is the most powerful weapon for the international community to overcome the epidemic, and it is also the most powerful weapon to overcome temporary domestic economic difficulties. The determination and consensus to achieve economic and social development goals. The data for the first quarter shows that China's economic resilience is much better than earlier market expectations, and it has the basis for actively achieving economic and social development goals for the year.
First, the macro policy should form a synergy. At present, various central and local departments and localities have issued many economic stimulus plans based on the actual situation of their own departments and localities, and they need to make overall arrangements to effectively achieve the desired results of overall promotion and full stability. Central government departments and localities must coordinate with each other to form synergy, increase policy awareness, and enhance policy effectiveness.
Second, macro policies must have bottom-line management thinking. Although China's epidemic prevention and control has achieved initial results, it still faces multiple uncertainties such as the impact of imported epidemics, external economic pressures, and difficulties in resuming production and tertiary industry. Macro policy should shift from the past digital goal of "guaranteing growth" to bottom line management with different connotations at different stages. Macro-policy must have a sufficient plan, so that our policy is adjustable, flexible, expandable and pluralistic on the basis of benchmark judgment.
Third, in response to the tremendous impact of the epidemic, macroeconomic policies need to break through routines and actively innovate, effectively and effectively enhance the role and efficiency of policies, and make active fiscal policies more proactive and sound, and stable monetary policies more flexible and appropriate. In the previous period, China did not carry out strong stimulus, which created a broader space for taking further policy measures.
Fourth, seek truth from facts and objectively and scientifically clarify economic and social development goals. On the one hand, while fighting the epidemic, it is of great significance to achieve the overall goal of winning a comprehensive well-off society and winning the tough battle against poverty as a work guide; Economic indicators, in-depth elaboration of the internal relationship between the goals, so that it is practically realistic.
Xiong Li