[Explanation] On September 7, the "Haichuang Forum 2022" opened in Beijing. Cai Fang, member of the Standing Committee of the National People's Congress, deputy chairman of the Agricultural and Rural Committee of the National People's Congress, and chief expert of the National High-end Think Tank of the Chinese Academy of Social Sciences, focused on "the current economic situation" and future development trends” for a special speech.
He pointed out that China's total population will reach its peak in 2022, and the disappearance of the demographic dividend will bring challenges on the demand side, especially the weakening of consumer demand on the demand side. It is necessary to deepen reforms to obtain dividends and increase the potential growth rate of the economy.
[Concurrent] Cai Fang, chief expert of the National High-end Think Tank of the Chinese Academy of Social Sciences
In 2022 we reach the second turning point in China's population, the peak and subsequent negative growth of the total population.
The second turning point means that there is no suspense about the disappearance of the demographic dividend. It disappears at an accelerated rate. Therefore, the supply-side challenge will accelerate and deepen, and the demand-side challenge will come unprecedentedly, because we have not thought about the demographic dividend before. Factors will bring a challenge on the demand side, which will form a huge constraint on China's economic growth, so this is a brand new change.
[Explanation] How will population affect demand, especially consumer demand?
Cai Fang believes that there are three effects: total population effect, population age structure effect, and income distribution effect.
[Concurrent] Cai Fang, chief expert of the National High-end Think Tank of the Chinese Academy of Social Sciences
The first is the population effect. Everyone thinks that the sum of all the people in the population is called the population. Therefore, the population is the consumer. When the population grows, the consumption increases. When the population stagnates, the consumption stagnates. The population has negative growth. Without other measures, consumption will grow negatively.
Second, there is also the effect of age structure of the population. The higher the overall aging degree of the population, the weaker the consumption capacity. This is the effect of age structure.
In addition, your economic growth will decelerate in the future, so the growth of people's income will also grow more slowly, and then the income effect will also affect your spending power.
[Explanation] Cai Fang said that in the "troika" that drives economic development, it is increasingly dependent on residents' consumption to support the economy.
But if demographic trends lead to sluggish consumption, future demand will become a constraint on the normalization of economic growth.
[Concurrent] Cai Fang, chief expert of the National High-end Think Tank of the Chinese Academy of Social Sciences
The demand side has appeared in front of us for the first time. Therefore, we must use both the supply side and the demand side to intensify reform efforts and win reform dividends in order to achieve our future economic growth rate.
[Explanation] Cai Fang said that to break the constraints on the demand side, China has long proposed common prosperity, and "an important aspect of promoting common prosperity is to substantially narrow the income gap through redistribution." Cai Fang said that China The Gini coefficient is still significantly higher than 0.4, and the urban-rural income gap accounts for half of it.
The experience of OECD (Organization for Economic Cooperation and Development) countries shows that the Gini coefficient can be reduced by an average of 35% through redistributive means such as taxation and transfer payments.
[Explanation] Cai Fang also said that China should cultivate more middle-income groups. China's middle-income group has the potential to double. If 1 billion people reach middle income, there will be more business opportunities and growth points.
Let Baokui, Ran Wenjuan and Dong Yufei report from Beijing
Responsible editor: [Luo Pan]