Text/Guan Tao
Published in the 1025th issue of China News Weekly on December 20, 2021
The Central Economic Work Conference, which closed a few days ago, emphasized that we must continue to do a good job in the "six stability" and "six guarantees", continue to improve people's livelihood, focus on stabilizing the macroeconomic market, and maintain economic operations within a reasonable range.
However, stable growth cannot wear new shoes and follow the old path. The meeting made specific arrangements and deployments on how to stabilize economic growth in the midst of high-quality economic development.
High-quality development is the direction
In 2021, China's economic development and epidemic prevention and control will maintain a leading position in the world. It is not difficult to complete the main expected goals of the government work report at the beginning of the year.
At the same time, in the practice of responding to risks and challenges, we have further accumulated an understanding of the regularity of economic work, including: we must adhere to high-quality development, adhere to economic construction as the center, and promote the steady improvement of quality and reasonable growth of the economy. ; It is necessary to persist in seeking progress while maintaining stability, adjust policies and promote reforms to grasp the effectiveness of timeliness, adhere to the first and then break, stable and stable operations; it is necessary to strengthen overall coordination and adhere to the system concept.
The understanding of these regularities is of great significance for guiding the work next year.
The 19th National Congress of the Communist Party of China has made an important judgment that China's economy has shifted from a stage of rapid growth to a stage of high-quality development.
In the past two years, the economic growth rate has declined, not only due to the objective reasons of the changes in the century and the epidemic in the century, but also the subjective reasons for the deviation in the understanding and implementation of high-quality development.
Although high-quality development is not only GDP, it is not about GDP, but to promote the steady improvement of quality and reasonable growth of the economy.
Doing a good job in the "six stability" and "six guarantees" and coping with changes in the past century will require China's economy to maintain a certain growth rate.
In practice, deliberately pursuing qualitative improvement while ignoring volume growth may cause undesirable results.
For example, this year's lack of flexibility in environmental protection requirements in some areas has increased layer by layer, resulting in large-scale power cuts in the second half of the year, affecting normal industrial production and social life.
The meeting reiterated the requirement to adhere to the party’s basic line of focusing on economic construction, highlighting that development is the primary task and the key to solving any problems.
Economic work must persist in seeking progress while maintaining stability. This is based on a major judgment on the economic situation next year. Under the impact of the epidemic in the century, the external environment next year will become more complicated and internally faced with the triple pressure of shrinking demand, supply shocks, and weakening expectations.
The draft of the Central Economic Work Conference mentioned "stability" 25 times, and clearly stated that next year's economic work should be "stabilized and seek progress while maintaining stability."
Economic operation is a dynamic process of orderly evolution. It is necessary to maintain strategic determination and patience, avoid short-term long-term goals, fragmentation of system goals, and avoid protracted warfare into assault warfare.
China is in a critical period of transforming its development mode, optimizing its economic structure, and transforming its growth momentum.
However, it is difficult to convert the old and new kinetic energy into one overnight, and it is difficult for the new economic growth point to quickly fill the gap left by the old economic growth points such as real estate and high energy-consuming industries.
Therefore, instead of rushing to achieve success, we must be steady and steady. Promoting the smooth convergence of new and old momentum will help reduce the pain of policy adjustments and reforms. It is particularly important for stabilizing the macroeconomic market and the overall social situation.
Economic work must strengthen overall planning and coordination and adhere to a systematic concept.
Although the systematic perspective has been mentioned many times, in practice, each department and each region will more or less give priority to their own KPIs, and underestimate the impact of spillover effects on the entire system.
Economic and social development is a complex and interrelated system. It is necessary to prevent the fallacy of synthesis and the fallacy of decomposition.
Some non-economic policies this year hope to achieve long-term goals quickly, and they have done their work in one stroke. As a result, they will have a greater impact on the job market and financial market in the short term.
At the same time, although some economic policies and regulatory policies have good original intentions and are the only way to achieve sustainable development, they may underestimate the secondary effects, focusing only on certain economic indicators and underestimating other related indicators.
Therefore, the formulation and implementation of policies must adhere to system concepts and practical standards, follow economic laws, and use practical effects to test the success or failure of policies.
Further correct the understanding and implementation deviations
Entering a new stage of development, China's development internal and external environment has undergone profound changes, and it faces many new major theoretical and practical issues, which require correct understanding and grasping.
The meeting explained the correct understanding and grasp of five major issues.
The first is to correctly understand and grasp the strategic goals and practical approaches to achieve common prosperity.
The meeting pointed out that common prosperity is to first make the "cake" bigger and do a good job through the joint efforts of the people of the whole country, and then cut the "cake" well through reasonable institutional arrangements, rather than rob the rich and help the poor, force donations, and raise lazy people. .
This is a long-term historical process, and we must steadily advance towards this goal.
The meeting also proposed to strengthen the priority of employment in the promotion of high-quality development, increase the employment driving force of economic growth, play the function and role of distribution, insist on distribution according to work as the main body, improve the distribution policy according to factors, and increase taxation and social security. , Transfer payment, etc.
This shows that the main foothold of common prosperity at this stage is still the primary and redistribution based on economic development to create jobs, increase labor compensation, and strengthen social security.
The second is to correctly understand and grasp the characteristics and behavioral laws of capital.
This is a response to the capital turbulence caused by the double reduction of education and Internet supervision that are of concern at home and abroad.
Capital aims at profit-seeking and can promote the optimal allocation of resources, but without effective supervision, allowing it to grow wildly will also have a negative effect on social life.
China will set up "traffic lights" for capital and strengthen supervision in accordance with the law.
Under the premise of overall development and security, we will still insist on the two "unshakable".
The third is to correctly understand and grasp the supply of primary products.
The impact of the epidemic in the century led to the break of the global supply chain, the hindrance of international logistics, and the skyrocketing price of commodities, which triggered a surge in inflation in various countries.
Although China's inflation situation is significantly better than other major economies, the supply-side inflation pressure caused by lack of cabinets, lack of coal, and lack of electricity may exceed expectations.
In addition, China's industrial production is highly dependent on the import of raw materials and key parts and components, and it is necessary to take precautions.
Therefore, the meeting put forward the concept of supply shock, demanding to insist on giving priority to saving and implementing a comprehensive saving strategy.
The fourth is to correctly understand and grasp the prevention and resolution of major risks.
Tighter regulation is a major theme of economic work in 2021. Last year, the Central Economic Work Conference had been deployed in many places.
Certain economic sectors have high debts and are unsustainable. Under the background of a slowdown in domestic economic growth and a possible shift in the Fed's monetary policy, sooner or later, they will explode.
Therefore, active mine clearance is better than passive deleveraging in the future. However, we must continue to follow the principles of stabilizing the overall situation, overall coordination, categorized policy implementation, and precise bomb disposal. We must do a good job in risk management, strengthen financial legal construction, and consolidate local, financial supervision, and industry leaders. Wait for the responsibilities of all parties, and consolidate the main responsibility of the enterprise for self-help.
The fifth is to correctly understand and grasp the carbon peak and carbon neutrality.
The dual control of energy consumption in 2021 has triggered heated discussions. Some regions have engaged in "carbon charge" or "sports carbon reduction", resulting in large-scale power cuts across the country, which significantly impacts normal industrial production and even affects residential electricity consumption.
It should be noted that China is still in the stage of economic development, electricity consumption is only increasing, and domestic power generation is still dominated by coal.
Although new energy is important, it is difficult to completely replace traditional energy in the short term.
In order to reduce the region’s “risky advancement” in carbon peaking and carbon neutrality, the meeting proposed to scientifically assess the need for new renewable energy and raw material energy to not be included in the total energy consumption control, and to create conditions for achieving “dual control of energy consumption” as soon as possible. ”Transition to “dual control” of total carbon emissions and intensity.
The elaboration of the above issues actively responded to external concerns and clarified vague understandings. It not only has great guiding significance for the current and future economic work, but also conforms to the aforementioned regular understanding of economic work, that is, it must be stable. Seek progress and strengthen overall planning.
The short-term economic goal is steady growth
The meeting demanded that all regions and departments should shoulder the responsibility of stabilizing the macro-economy, and all parties should actively introduce policies that are conducive to economic stability, and that policy efforts should be appropriately advanced.
It is foreseeable that in 2022, policies with shrinking effects in various regions and departments will be cautiously introduced.
The meeting made policy arrangements from seven aspects, and the stable and effective macroeconomic policies ranked first among the seven major policies.
Since July 2021, in the face of increasing pressure to keep the economy running smoothly, China has proposed to do a good job in cross-cyclical adjustment of macroeconomic policies, which is not a substitute for but a supplement to traditional countercyclical adjustments.
The meeting emphasized that intensifying the cross-cycle adjustment of macroeconomic policies is to maintain the continuity, stability, and sustainability of macroeconomic policies, and continue to provide necessary support for economic recovery.
Therefore, the meeting’s formulation of fiscal and monetary policy has not changed significantly from the previous year.
Proactive fiscal policies must improve efficiency, pay more attention to precision and sustainability, party and government agencies must insist on living a tight life, resolutely curb new hidden debts of local governments, ensure the intensity of expenditures, accelerate the progress of expenditures, and implement new tax and fee reductions Policy, carry out infrastructure investment moderately ahead of time; prudent monetary policy must be flexible and appropriate, and maintain reasonable and sufficient liquidity.
In the face of economic downturn and triple pressure next year, cross-cyclical and counter-cyclical macro-control policies must be organically combined.
This means that on the basis of strengthening the research and judgment of the situation, we will take action when we make a move. Maintaining the normal macro policy space is reserved for use, not for watching.
This is also the proper meaning of adhering to the "self-centered" macroeconomic policy, and the confidence to keep the economy operating within a reasonable range.
Of course, in the face of the asymmetric impact caused by the epidemic, it may still be necessary to further play the role of structural or directional fiscal and monetary policy tools to improve the pertinence and effectiveness of policies.
Fiscal policy should strengthen support for small, medium and micro enterprises, individual industrial and commercial households, manufacturing, and risk mitigation; monetary policy should guide financial institutions to increase support for the real economy, especially small and micro enterprises, technological innovation, and green development.
In addition, it is necessary to strengthen the coordination and linkage of fiscal and monetary policies to improve the effectiveness of macroeconomic policies.
Fiscal and monetary policies cannot cover the entire world and cure all diseases, and need the support and supplement of other policies.
Micro-policies further promote the implementation of fair competition policies, create a good environment for the development of enterprises of various ownerships, and effectively control malicious defaults and debt evasion. This will help continue to stimulate the vitality of market players and boost their confidence.
Structural policies deepen the supply-side structural reforms, which will help smooth the domestic cycle, break through the supply constraints, and open up production, distribution, circulation, and consumption.
The reform and opening-up policy will do a good job of piloting comprehensive reforms in the market-oriented allocation of factors, mobilize local reform enthusiasm, promote institutional opening, and implement the national treatment of foreign-funded enterprises, which will help activate development momentum.
Regional policies implement in-depth regional major strategies and regional coordinated development strategies, comprehensively promote rural revitalization, and improve the quality of new urbanization construction, which will help enhance the balance and coordination of development.
Social policies coordinate the promotion of economic development and people's livelihood, solve the employment problems of key groups, and improve flexible employment and social security policies, which will help to secure the bottom line of people's livelihood.
Since the beginning of this year, the intensity of real estate regulation has been so great that it is rare in history, especially the control of financing of real estate enterprises.
However, due to the deep bundling of China's economy and real estate, the sharp decline in real estate is not in line with the general tone of macroeconomic stability and overall social stability.
It is worth noting that real estate is a logic of breaking the Chinese economy first, and its remaining "reservoir" function also needs to be quickly filled by the new economy.
The meeting pointed out that accelerating the implementation of science and technology policies, focusing on key core technologies, strengthening national strategic science and technology forces, strengthening the status of corporate innovation as the mainstay, and realizing a virtuous cycle of technology, industry, and finance, is precisely to replace the “old economy” with the “new economy”. Important way out.
This Central Economic Work Conference is an important meeting to clarify understanding, build consensus, boost confidence, and stabilize expectations. It is extremely pragmatic and combines new developments and changes in domestic and foreign situations, and answers the “what to do” and “how to” to promote high-quality economic development. The issue of "doing" has made adequate policy measures and theoretical public opinion preparations for next year's economic work.
It is expected that the Chinese economy will face a more friendly policy environment next year, which is expected to create a stable and healthy economic environment.
(The author is the chief economist of Bank of China Securities)
China News Weekly, Issue 47, 2021
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