At present, the situation of epidemic prevention and control throughout the country continues to improve, and the recovery of production and living order is accelerating. However, the spread of overseas epidemics has adversely affected the world economy and brought new challenges. The recent session of the Political Bureau of the Central Committee stressed the need to increase the adjustment and implementation of macro policies, and to study and propose a package of macro policies and measures to respond positively. How can China strengthen its macroeconomic policy adjustments and make overall plans to promote epidemic prevention and control and economic and social development? On related hot issues, the newspaper invited three experts to discuss in depth.
Good support for economic operation
In order to deal with the impact of the new crown pneumonia epidemic on the economy and society, China has successively introduced and implemented a series of fiscal, monetary, and employment policies, and the recent Central Political Bureau meeting further clarified a number of policy measures. What are the main focuses of these macro policies?
Liu Shangxi: The negative impact of the new crown pneumonia epidemic has placed employment, business operations and personal daily life in a highly uncertain environment. The epidemic has two major direct effects. First, in terms of demand, it caused the contraction of group demand, especially for tourism, catering, transportation and other industries. The impact was obvious, very direct, and fast. Second, in terms of supply, affected by the epidemic, many companies were affected by the Spring Festival Difficulties in returning to work.
A series of policies adopted by the state aim to inject certainty and share risks, and hedge against the uncertainties and risks brought by the epidemic. In terms of fiscal policy, we will maintain a proactive fiscal policy orientation, and take effective measures including strengthening funding protection, reducing taxes and fees, and discounting loans. Recently, the central government has further proposed important measures such as appropriately increasing the fiscal deficit rate, issuing special government bonds, and increasing the scale of local government special bonds. These measures hedged the negative impact of the epidemic on the stable operation of the economy and society, and demonstrated the role of fiscal emergency. In terms of monetary policy, a series of measures have been adopted to maintain reasonable and sufficient liquidity. These intensive policies have provided good support for winning the battle against epidemic prevention and control and stabilizing economic operations.
Liu Qiao: Judging from the economic data of January and February released by the National Bureau of Statistics, the new crown pneumonia epidemic has caused a great impact on China's economy and society. In the early days of the outbreak, China adopted a series of macro policies in a timely and decisive manner, which strengthened the counter-cyclical adjustment. These policies have played an important role in hedging the impact of the epidemic and preventing economic operations from slipping out of a reasonable range.
For example, the central bank has ensured the relatively sufficient liquidity of the market and enterprises through operations such as interest rate cuts in the medium-term borrowing facility (MLF) and a large number of reverse repurchases; a series of fiscal policies to reduce taxes and fees and reduce corporate burdens have also been introduced. These policies have played a positive role in stabilizing growth and employment, and helping the most affected small and medium-sized enterprises to weather the crisis.
Wen Bin: Since the outbreak of the new crown pneumonia epidemic, with the full deployment of the Party Central Committee, various departments have issued a number of policies to help enterprises rescue the first time. For example, the central bank and other five departments jointly issued "30 Articles of Finance" in support of epidemic prevention measures; monetary policy increased the efforts of open market operations, and kept the market liquidity reasonable and adequate through methods such as RRR cuts and interest rate cuts, and reduced the financing cost of the real economy. Loans, rediscounts, and temporary repayment of principal and interest on small and micro enterprise loans have increased targeted support. The financial department has issued a series of fiscal and tax policies in time to implement subsidies or tax incentives for patients with new coronary pneumonia, medical staff and epidemic prevention workers participating in the prevention and treatment, and workers affected by the epidemic, and provide financial discounts to corporate loans that are key to prevent and control the epidemic. Tax and fee reduction measures will be implemented for industries affected by the epidemic.
It can be said that the promulgation and implementation of these policies have strongly supported the prevention and control of the epidemic, played an important role in maintaining the normal operation of the economy under the epidemic, and ensuring the overall stability of the society, and will also support the current acceleration of economic recovery.
Stick to structural issues
The central government has proposed to strengthen the adjustment and implementation of macro policies. How should China's macro-policy maintain strategic stability? What kind of logic should we use to formulate macro policies?
Liu Qiao: The global economy faced a "downtime" for most of the second quarter of this year, which not only seriously affected external demand, but also brought the risk of global supply chain disruption, which inevitably brought great uncertainty to China's economic recovery. We need to think deeply about the macro policy paradigm of the impact of China's hedge against the epidemic, and further clarify the key areas of macro policy positioning and implementation.
In a situation where the Chinese economy has shifted to high-quality development and the logic of China's core growth has changed, in the face of the crisis, we must continue to pay attention to structural issues, and the focus of macroeconomic policies should shift to the structural impact of hedging epidemics on the Chinese economy.
The current spread of the epidemic is accelerating globally. The goal of macroeconomic policies should be to hedge the structural impact of the epidemic on the Chinese economy. Compared with the economic aggregate and growth rate, more attention should be paid to indicators that can reflect the economic and social structure, such as the growth rate of total factor productivity, changes in the industry and employment structure, the vitality of microeconomic units, the structure of income distribution, and participation in global value chains Degree and positioning, R & D intensity and innovation ability, return on investment capital, etc. Getting rid of the constraints of rigid growth goals and pushing structural reforms with greater intensity should become the new paradigm of macro policies adopted by China today.
Liu Shangxi: In addition to the economic aspect, the global epidemic risk will have a great impact on the global industrial chain and supply chain. China's industrial supply chain has entered the global economy, and it will affect the whole body. We must have short-term measures and even long-term considerations.
The impact of the epidemic on the economy is temporary and short-term, and will not change the fundamentals of China's long-term positive economy. The epidemic will have a great impact on the economic growth rate, especially in the first quarter. However, through a series of policy hedging, the impact of the epidemic on the economy can be minimized. At present, it is necessary to do a good job of the "six stability", especially to stabilize expectations, and to promote the economic and social return to normal as soon as possible and get back on track. But the uncertainty and risks brought by the epidemic cannot be overestimated. With sufficient preparation, the risks in the big change have become strategic opportunities.
Wen Bin: To formulate macroeconomic policies, we must adhere to the "mainly me" principle, and issue appropriate regulatory policies based on the domestic epidemic prevention and control situation and economic and social development situations and needs. At the same time, we must also pay attention to the spillover effects brought by overseas economic stimulus policies and the impact of global economic recession and financial market fluctuations. We must increase the flexibility of macroeconomic policies, strengthen counter-cyclical adjustments, and be fully prepared to prevent various shocks. .
Push more tax and fee reduction measures
Recently, China has adopted a series of fiscal and taxation measures such as increasing capital investment, reducing taxes and fees. Next, how can a proactive fiscal policy be more proactive?
Liu Shangxi: We need to break away from traditional thinking and comprehensively analyze public risks in all areas of the economy and society. From the perspective of stabilizing market expectations and enhancing social confidence, we can make fiscal policy more active and proactive under the control of fiscal risks.
Regarding measures that the central government has clearly and appropriately raised the fiscal deficit rate, issued special government bonds, and increased the scale of local government special bonds, it is necessary to further develop specific implementation plans to give full play to the effects of the policy as soon as possible.
In the long run, promoting economic recovery and development requires not only rescue policy arrangements, but also deepening reform and opening up and improving the business environment. Only by introducing new reform measures can we fundamentally enhance confidence and improve corporate expectations.
Facing unprecedented pressure to reduce revenue and increase expenditure, we must vigorously optimize the expenditure structure. It is necessary to fully adjust the budget and re-align the expenditure items. To optimize the allocation of financial funds and break the solidification of expenditures, the projects that should be cut down are resolutely cut off, and the items that should be guaranteed must be effectively guaranteed.
Fiscal funds are not unlimited. Market and social forces need to be guided. Government and social capital cooperation (PPP) and government purchase of services should be encouraged. Market-oriented reforms should be introduced. Fiscal resources should work in concert with market and social resources to create resistance. Epidemics work together to meet common people's needs for public services through co-governance, co-construction and cooperative innovation.
At the same time, a feedback mechanism should be established to make timely and dynamic scientific assessments of the effects of policies, and continually consolidate, amend, and adjust according to the implementation of policies and changes in the actual situation. As with medications, policy measures under uncertainty should always be matched with changes in risk status.
Liu Qiao: In view of the impact of the crisis on China's economy and the risks it brings more than expected, I think that we should implement more vigorous fiscal policies. From the perspective of structural impact, the impact of the epidemic is mainly reflected in two aspects. The first is the impact on economic micro-foundation enterprises, especially small, medium and micro enterprises; the second is the impact on consumption and employment. Small, medium and micro enterprises provide more than 80% of China's employment. Consumption will drive nearly 60% of China's economic growth in 2019. The focus of China's fiscal policy should be on stabilizing employment and promoting consumption, focusing on more than 30 million small, medium and micro enterprises. And more than 90 million individual industrial and commercial households to create a better business environment.
For small, medium and micro enterprises, more measures can be introduced to reduce taxes and fees. China's value-added tax reform is basically in place. In the future, corporate income tax can also be adjusted downwards. This will play a role in enhancing the investment confidence of small and medium-sized enterprises and increasing the return on investment capital.
In terms of promoting consumption, some policies can be adopted to hedge the impact of the epidemic. For example, through further adjustments to personal income tax, increasing the disposable income of individuals and families; issuing consumer vouchers for low-income groups and residents of Hubei Province; and so on.
Wen Bin: Fiscal policy should give full play to the role of finance in making up for market failures in the allocation of resources and ensuring the smooth operation of the national economy. Specifically, it is possible to appropriately expand the scale of issuance of government bonds and local government bonds, accelerate the progress of projects, and form effective investments as soon as possible; implement the tax and fee reduction policies that have been introduced to effectively reduce the burden on enterprises; and increase fiscal funds for "new infrastructure" 2. Make up for short-term support, promote infrastructure investment to play a supporting role, and form a new economic growth point.
Monetary policy should be targeted
Next, how can a prudent monetary policy be more flexible and appropriate to provide precise financial services for epidemic prevention and control, resumption of production and real economy development?
Wen Bin: The requirement of "flexibility and moderation" continued the deployment of monetary policy by the Central Economic Work Conference at the end of last year. Dilemmas and dilemmas in China's economic development have increased, so monetary policy must take into account multiple objectives. For example, we must focus on seeking balance in the fight against the epidemic, inflation, exchange rate stability, and economic development. At present, the new crown pneumonia epidemic has had a significant impact on the economy, and the production and operation of small and medium-sized enterprises have generally become more difficult, and in particular, greater support is needed from monetary policy.
In the next stage, monetary policy should continue to increase open market operations and lower standards and interest rates, maintain reasonable and sufficient liquidity, and make greater efforts to reduce the financing cost of the real economy. In view of the current high cost of bank liabilities, limited pressure drop spreads, and corporate and residential sector deposits accounting for more than 60% of total bank liabilities, policy rates should not be changed frequently, and a timely and moderate reduction of the benchmark deposit interest rate will have a significant effect on the decline of LPR.
In addition, we need to guide China ’s government bond yields to decline steadily, reduce the China-US interest rate spread to a moderate level, increase the flexibility of the RMB exchange rate, strengthen the monitoring and management of short-term cross-border funds, and prevent financial risks.
Liu Qiao: Even if the US Federal Reserve cuts interest rates sharply, it will be difficult for China's central bank to actively follow up. First, the transmission mechanism of China's current monetary policy is still imperfect, and the “dual-track system” of interest rates still exists; Therefore, when formulating a monetary policy, we must avoid flooding, and we must emphasize precise measures to meet real credit needs and beware of credit crunch.
Liu Shangxi: Monetary policy should focus on improving liquidity. At the same time that monetary policy is tight and moderate, it is necessary to eliminate policy transmission barriers and channel the monetary policy transmission mechanism. Monetary policy should really improve liquidity and even take unconventional financial measures, such as some foreign central banks directly buying corporate commercial paper to stabilize corporate capital chains, industrial chains and supply chains.
Dealing with risks requires coordination
At present, downward pressure on the economy continues to increase. What targeted policy actions can be taken? How can macro policy tools work together?
Liu Qiao: To stabilize economic growth, we must give play to the role of effective investment, and we must find new and large-scale investment areas in accordance with changes in China's economic logic. It is recommended that all parties pay attention to two investment areas related to infrastructure and which have a lot of space.
The first is investment in infrastructure related to people's livelihood, such as the transformation of old cities, rental housing, and construction of urban public facilities.
The second is the area of infrastructure construction and public service facilities in central cities and metropolitan areas. By promoting the integration of infrastructure and equalization of basic services, we can increase the effect of urban agglomeration and the optimal population size that cities can accommodate, promote the formation of a unified large market, bring more people into the "market," and achieve per capita income through agglomeration. Increase and narrow the development gap.
Liu Shangxi: The essence of national governance is the management of public risks. Whether public risks can be minimized and people live and work in peace and contentment is the basic standard for measuring the modernization of national governance. In the final analysis, we must rely on deepening reforms to boost social confidence and prevent public risks.
Dealing with public risks is not just a matter for one or some sectors, but involves the whole country's governance, which requires the cooperation of various sectors. Therefore, macroeconomic policies such as finance, currency, and employment should not be "single soldiers." Rather, a policy combination and coordination mechanism should be established. In addition, it is necessary to establish a scientific assessment mechanism to evaluate, assess and supervise the work of the department in terms of policy effects, and to avoid "remaining trace" supervision. For example, for corporate financing, finance must be coordinated and coordinated with financial policies. By providing financial means such as loan discounts and guarantee fee subsidies, targeted funding shortages faced by some industries and enterprises can be reduced to reduce financing costs.
Consideration should be given to securing employment. A large number of small, medium and micro enterprises are the main employment channels. On the one hand, securing the capital chain of small, medium and micro enterprises is to secure employment positions, reduce the impact of the epidemic on the employment stock, and avoid transforming economic risks into social risks. help.
Wen Bin: Macroeconomic policies need to strengthen coordination and cooperation to form a joint force in order to effectively respond to the epidemic and the impact of global economic fluctuations and accelerate economic and social recovery and development.
For example, in response to the short-term impact of the epidemic, according to the characteristics of different industries, targeted employment, industrial, financial, and fiscal support measures should be introduced to open the flow of people, logistics, and capital to ensure the labor force required to resume work and resume production. Raw materials and funds. It is necessary to continue to make good use of fiscal discounts on loans, guarantee subsidies, and other means to bring together policies to reduce corporate financing costs. To co-ordinate and advance the temporary repayment of the principal and interest of small and medium-sized enterprises, the financial, fiscal, and regulatory aspects must provide supporting support.
Policies must be more balanced. Employment issues are related to the livelihood of residents and social stability. We must strengthen financial, fiscal and other macro policies to support employment, especially for service industries, manufacturing industries and other major investment projects that attract a large number of employees, as well as major investment projects. Increase support in areas such as security.
A large number of private enterprises and small and micro enterprises are the main force to attract employment. The difficulties encountered by these enterprises in the epidemic have attracted wide attention. It is necessary to implement the policies that have been introduced, and make every effort to make it survive, and to ensure the overall stability of employment.