Li Daokui talks about the impact of the epidemic on the appropriate easing monetary policy

He believes that the most important thing now is to achieve a complete and safe return to work, which is more important than any fiscal and monetary stimulus policy.

Li Daokui, Dean, China Institute of Economic Thought and Practice, Tsinghua University. Profile picture / Photo by Beijing News reporter Wang Jianing

New crown pneumonia epidemic data is improving, and enterprises resume work and resume production. Recently, Li Daokui, dean of the China Academy of Economic Thought and Practice at Tsinghua University, said in a recent research report that if the policies are properly addressed, the current negative impact of the new crown pneumonia outbreak on the economic growth rate will be manageable. In the fight against the epidemic, the safe and smooth resumption of work is the most critical, more important than any fiscal and monetary stimulus policy. Li Daokui said that in order to ensure the safety and resumption of work for enterprises, accurate measures must be taken and policy transmission mechanisms should be strengthened; the impact of the epidemic on the global economy is full of uncertainties, and China's appropriate loose monetary policy may be moved backward.

On Economic Growth

The negative impact of the epidemic on economic growth is under control, and opposition to general talks on SMEs

Beijing News: How is the impact of the epidemic on China's economy different from the SARS period?

Li Daokui: Unlike SARS. The new crown pneumonia outbreak occurred in the first quarter, which was the period when economic activity was the lowest in the whole year. Coupled with the development of logistics and transportation, e-commerce, and network co-working in recent years, it has become possible to continue some economic activities during the epidemic prevention period, and the government's response measures in economic operations have significantly moved forward compared to the SARS epidemic. The above reasons will partly reduce the impact of the epidemic on the economy.

However, when the SARS epidemic occurred, China's economy was in a rising period and accelerating to join globalization. At the time of the epidemic, our economy was in a complex period of downward stabilization and globalization. According to our model predictions, if the new crown virus epidemic can be controlled in the first quarter of 2020 and full resumption of work will be achieved, its overall impact on China's economic growth will be -0.17 percentage points; if the epidemic continues to the second, In the third or fourth quarter, the expected impact on economic growth is -0.36, -0.55, and -0.77 percentage points, respectively.

Our forecast for the economic growth rate in 2020 announced before the outbreak was 6.1%. After considering the impact of the new crown epidemic, China's economic growth rate in 2020 should be between 5.3% and 5.9% according to the time when the epidemic ended. If the policies are handled properly, the current negative impact of the new crown pneumonia outbreak on the economic growth rate will be manageable, and the overall impact will be limited, and the stated policy goals can be achieved.

Beijing News: The current general concern is the impact of the epidemic on SMEs. What do you think?

Li Daokui: I oppose simply considering "small and medium-sized enterprises" as a group. SMEs are spread across different industries and sectors. The differences between industries are far greater than the differences between the sizes of enterprises. This epidemic has affected them. Very different.

The epidemic has a large impact on the service industry, but it should also be divided into two categories: one is the traditional service industry, such as tourism, accommodation, canteen restaurants, etc., which has a great impact; the other is the modern service industry, such as software, education, consulting Services, accounting, journalism, finance, etc. It is more reasonable to divide by industry. These in the traditional service industry need our attention.

On Fiscal and Monetary Policy

The point of withdrawal of appropriate loose monetary policy may move backwards

Beijing News: How do you evaluate the effect of current fiscal and monetary policies on the economy and SMEs?

Li Daokui: This is an extraordinary period. The current fiscal policy and monetary policy orientation are good. Fiscal policy is very active. Monetary policy is appropriately loose, but the targeting may not be enough. The transmission mechanism is not enough. It needs to be transmitted to a single, different Enterprises need different policies. This is the key and needs to be strengthened now.

The difficulty faced by most enterprises is not capital or taxation, but the inability to resume work, find no workers, and the inability of upstream and downstream enterprises to support them. This is the key to the problem. So can the fiscal policy help the more affected enterprises more accurately? For the temporary resumption of work, whether the government can pay social security on behalf of the company is "on behalf of" instead of "exempt"; Part of the social security previously paid; for example, temporary exemption of rent for a period of time, appropriate reduction of loan interest, etc. In short, it is necessary to provide accurate policy and accurate analysis, and cannot be done across the board.

Beijing News: What is the feasibility of the relief policy? Because of tax cuts last year, some places reported that finances were tight.

Li Daokui: Frankly speaking, this does not cost much money, which is much less than the 3% reduction in value-added tax, because those large-scale enterprises have already resumed work. The current policies are mainly small and medium-sized enterprises that have not yet resumed work. The government can verify if it is serious about its work. Speaking of tax reduction, this part of the enterprise paid relatively little tax before. It should not be too difficult to reduce it, and it will not take long, just a few months.

Beijing News: Banks may consider bad assessments, how can banks be more willing to lend?

Li Daokui: In the future, a policy may be issued. Loans issued during the period of New Coronary Pneumonia should be "opened up" in the assessment. Do not investigate the loans granted under special circumstances. In short, the mechanism must be flexible.

Beijing News: How do you expect the current loose monetary policy cycle to adjust as the epidemic continues?

Li Daokui: Now there is another new factor to consider, that is, the epidemic continues to develop internationally, and there is even a more serious trend. Therefore, our monetary policy must also take into account the international impact and the international monetary environment. Such as the euro, the dollar, their monetary policy may be more accommodative. In this context, the point of withdrawal of our loose monetary policy may have to be shifted back a bit, and we must be fully prepared.

On Enterprise Resumption

Propose to change to emphasize the number of cases per 100 million yuan of GDP, taking into account both epidemic prevention and resumption of work

Beijing News: You just mentioned that the epidemic has a greater impact on services and other industries. What is the most important thing at the moment?

Li Daokui: The most important thing is to achieve a safe and smooth return to work, which is more important than any fiscal and monetary stimulus policy.

Beijing News: How to ensure the safety of enterprises to resume work?

Li Daokui: In the report, we put forward suggestions for extending the current grid-based epidemic prevention management of communities to the epidemic prevention management of jobs, and for unified management of employees' work and life. I emphasize two more levels, one is the management level and the other is the technical level.

From a technical perspective, different norms and standards should be worked out for different industries. For example, in the barber industry, find some doctors and experts in the barber industry to study what kind of process is the safest; and how to prevent it at construction sites, dormitories, and canteens.

One obstacle to government administration is that leaders in all regions are staring at a statistic that the number of new diagnoses is expected to be zero. I think this guideline needs to be adjusted. It is suggested that the number of cases per 100 million yuan of GDP be changed to emphasize the prevention of epidemics and resumption of work. Local governments can't just emphasize zero-diagnosis, they should emphasize standardization, as long as they follow the standard strictly, even if one or two new cases occur, they are random events, and they will not be held accountable. Accountability cannot be based on random events, but management processes.

According to the analysis, it is difficult to return to work and add a new zero diagnosis. To be prepared for a protracted war, as long as there are more effective coping and treatment methods within the controllable range, then we should not change our normal socioeconomic operation mode because of the existence of one or two cases.

Beijing News: How big is the policy space?

Li Daokui: I think the following economic policy space is a little more favorable than during the SARS period, that is, our economic dependence on the outside world has greatly decreased, and the Chinese economy is relatively self-contained. For example, China ’s exports currently account for about 15% of the total output value The atypical pneumonia is high. In our current economy, the proportion of the service industry is relatively high, and a large number of the service industry are untradeable and do not have a direct relationship with foreign countries, so this is a favorable space. As long as we do our job well, our company should not die, we can resume work safely, and a lot of consumption can continue, and that's it.

I am worried about another thing now. After the epidemic situation eases a bit, the people will start to consume. At this time, production can keep up. Therefore, I suggest that the relevant companies in the field of durable consumer goods should resume their work as soon as possible. Do not wait for consumers to buy, production can not keep up, and the economy will suffer. I think that after the epidemic passed, many people may have a new understanding of the relationship between consumption and savings. I tend to think that many people may be more willing to purchase consumer goods. I feel that many things are not important before life and death. We must improve them tangibly. Quality of life, so we have to keep up with production.

Talking about global impact

Global demand for Chinese exports may slow

Beijing News: How do you expect the epidemic to affect the global economy?

Li Daokui: The current impact of the epidemic on the global economy is full of uncertainty. The worst case is a large-scale shutdown in Europe and a large-scale shutdown in the US economy.

The impact on China's economy is probably two-fold. The relatively large aspect is that the demand for our export products may slow down; the small aspect is that the supply of some key parts and components may not keep up and supply will be cut off. I think that the risk of a lapse in supply may have a smaller impact on the Chinese economy than the former, because the current self-supporting ability of the Chinese economy is much stronger than 10 years ago, and China can produce more and more things.

Beijing News: Some people think that the epidemic will prompt a new round of industrial restructuring.

Li Daokui: Industrial restructuring is already underway. For example, chips and mobile phone operating systems must be designed independently. I think the most direct impact of the epidemic is the use of new technologies, such as remote transactions, remote conference calls, and online lectures. This is the biggest impact.

Beijing News reporter Cheng Weimiao