China News Service, Beijing, February 29th
: Heading to the start, China’s economy starts from the “new”
——Exclusive interview with Zhang Jianping, deputy director of the Academic Committee of the Research Institute of the Ministry of Commerce of China
China News Service reporter Wang Enbo
The lively Spring Festival holiday is over, and China has entered a more intense start-up time.
All regions are rushing to get started and holding the "First Meeting of the New Year" to lay out the economic work for the whole year. Keywords such as high-quality development and new productivity appear frequently.
In the new year, China is starting from the "new".
Zhang Jianping, deputy director of the Academic Committee of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce of the People's Republic of China, recently accepted an exclusive interview with China News Service's "China Focus Face to Face" and talked about the new momentum, new plans, and new challenges related to the direction of China's economy this year.
He also emphasized that innovation-driven development has become the "Huashan Road" for China's economy to overcome the middle-income trap.
Video: [China Focus Face to Face] Get started, China's economy starts from the "new"
Source: China News Network
New kinetic energy originates from the current hot word "new quality productivity".
Zhang Jianping analyzed that compared with traditional productivity, new productivity has the "three highs" characteristics of high technology, high efficiency and high quality.
Reflected at the industrial level, it can be summarized in three sentences: traditional industries must be transformed and upgraded; emerging industries must accelerate development, enhance competitiveness, and expand market share; and future industries, such as AI, which is currently hot, must be planned ahead of time.
Fortunately, China's new business formats and new models are constantly growing, injecting new momentum into the economy.
Among them, the "three new products" (electric passenger vehicles, lithium-ion batteries, and solar cells) are popular overseas, and exports will exceed one trillion yuan (RMB, the same below) for the first time in 2023.
However, the core sign of new productivity is the substantial increase in total factor productivity.
Measured by this standard, there is still a gap between China and developed countries.
"If in the past, improving total factor productivity relied heavily on labor force, resource investment, and capital investment, in the future it will rely more on innovation investment and R&D investment." Zhang Jianping said that all countries in the world that have successfully overcome the middle-income trap have embarked on the path of innovation. Drive the development path.
China ranks 12th in the Global Innovation Index, and its annual R&D investment ranks among the top in the world. However, there is still a large gap in the transformation rate of scientific and technological achievements compared with developed countries.
In the next step, we must strengthen the collaboration between industry, academia and research, and accelerate the transformation of scientific research results into real productivity.
The new plan reflects China’s sense of urgency to do a good job in economic work.
Construction started after the Spring Festival, and everyone from the central to local governments quickly got into work and planned the development for the whole year as soon as possible.
"Getting started" highlights the pragmatic action style.
Zhang Jianping believes that China's current economic fundamentals are good, but there are also challenges.
The National Two Sessions held in the spring will determine the fiscal expenditure package for this year, key support for major industrial development projects, infrastructure projects, and the tone of monetary policy.
Therefore, it is very critical for all regions to attach great importance to year-round economic development planning in spring and find effective development paths.
Since the beginning of the year, major projects have started intensively in many places, which is also a reflection of the sense of urgency.
In the annual investment plans disclosed by various provinces, large projects of tens of billions and hundreds of billions appear frequently.
Zhang Jianping said that China is still the largest developing country in the world. Although its infrastructure is quite developed, investment tasks in areas such as the integrated sea, land and air transportation system and new infrastructure are still important, and it is necessary to plan ahead and speed up construction.
Through these investments, on the one hand, they can play a driving role in economic growth; on the other hand, the creation of jobs and income from the projects will lead to consumption-inducing effects.
Zhang Jianping, deputy director of the Academic Committee of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce of the People's Republic of China, accepted an exclusive interview with China News Service's "China Focus Face to Face".
Photo by China News Service reporter Yi Haifei
New challenges require more precise measures to be met.
China, which has a huge market, is facing the challenge of insufficient effective demand.
The Central Economic Work Conference proposed that "we must persist in deepening supply-side structural reforms and focus on expanding effective demand synergy," highlighting the breakpoints, blockages, and stuck points in the combination of supply and demand that need to be resolved.
Zhang Jianping gave an example: China ranks first in manufacturing capacity in the world, but many consumers are dissatisfied with the quality and grade of domestic products, and some of their needs are not met.
Stimulating the huge potential of effective demand requires supply-side products and services to be more accurately aligned with demand, allowing market demand to be unleashed.
In many places and fields in China, people are thinking about this.
Zhang Jianping noticed that at the end of last year, Harbin effectively combined the supply of cultural tourism products and services with consumer demand during the ice and snow season, creating many bright spots.
In addition, domestic fashion brands are becoming more and more popular and recognized by young Chinese consumers, and have even replaced big foreign brands in some fields.
These are all cases where supply and demand are combined to better meet market demand.
Data map: Harbin’s Chinese Baroque Historical and Cultural District, the ice rose wall attracts tourists to take photos.
Photo by Zhao Yuhang
Zhang Jianping reminded the industry to pay attention to the power of "consumer choice", which will exert a gravitational pull on the investment, operations, products and services of supply-side enterprises, allowing investment and consumption to interact, influence each other, and ultimately promote each other.
"I hope that the mutually reinforcing relationship between the two will become more fully demonstrated in 2024, thereby helping China achieve its goal of stabilizing growth." (End)
Excerpts from the interview transcript are as follows:
Reporter from China News Service: From the local two sessions not long ago to the "first session of the New Year" in various places, new productivity has been hotly discussed. How should we understand new productivity? What growth momentum will this "new" word release?
Zhang Jianping:
China is currently in a new stage of development and emphasizes the need to support high-quality growth with new development concepts.
In this process, in terms of productivity, especially in terms of industrial competitiveness, it is necessary to cultivate new productive forces.
Compared with traditional productivity, new productivity has the "three highs" characteristics of high technology, high efficiency and high quality.
Reflected at the industrial level, it can be summarized in three sentences: first, traditional industries must be transformed and upgraded; second, emerging industries must accelerate development, enhance competitiveness, and expand market share; third, future industries, such as those currently hot AI, etc., need to be laid out in advance.
Taking emerging industries as an example, China's new business formats and new models are constantly growing. For example, the export of the "three new items" (electric passenger vehicles, lithium-ion batteries, and solar cells) fully reflects the strong competitiveness of China's new business formats.
Even in the field of traditional industries, China has created Chinese brands that have gone global through business model innovation, and its strength can compete with multinational giants. These fully demonstrate that China has a vast land, abundant resources, and outstanding people.
Under the guidance of new quality productivity, I believe China will find many new growth points, thereby revitalizing the economy and making continuous progress towards a higher level.
Reporter from China News Service: The core symbol of new productivity is the substantial increase in total factor productivity. What is the key to achieving this for the current Chinese economy? New productive forces are being developed everywhere. How to avoid homogenization problems?
Zhang Jianping:
Total factor productivity is crucial to China’s next development.
China's total factor productivity is higher than that of developing countries, but there is still a large gap compared with developed countries.
To improve total factor productivity, people are the most fundamental factor.
People's enthusiasm for innovation and entrepreneurial spirit must be fully stimulated, so that they can better optimize and combine production objects and production materials and allocate them in accordance with market mechanisms, thereby generating new momentum.
If in the past, improving total factor productivity relied heavily on labor force, resource input, and capital investment, in the future, it will rely more on innovation investment and R&D investment.
For China, innovation-driven development is the path that must be taken to successfully overcome the middle-income trap. It is the “one road in Huashan Mountain”.
In this world, all countries that have successfully overcome the middle-income trap have embarked on the path of innovation-driven development.
China now ranks 12th in the global innovation index, and its annual R&D investment ranks among the top in the world. It can be compared with some developed countries, but there is still a big gap in the conversion rate of scientific and technological achievements compared with developed countries.
Therefore, the next step must be to strengthen the collaboration between industry, academia and research, and accelerate the transformation of scientific research results into real productivity.
However, during the transformation process, supporting laws such as the Scientific and Technological Achievements Transformation Law and Company Law must also be promoted, and incentive mechanisms must be in place to protect the inventions and interests of innovators.
Many places are now vigorously encouraging the growth of the "three new" economies and actively seeking new business formats, new models and new drivers.
But it is indeed necessary to adapt measures to local conditions, consider one's own actual conditions, human resource base, industrial base, etc., and make comprehensive and balanced considerations.
China has entered a development process in which market mechanisms play an increasingly important role. The government's role is mainly to guide, encourage and support, design policies and formulate rules.
Whether it can form industrial competitiveness, occupy market share in domestic and international markets, and form brand reputation and market space ultimately depends on the hard work of the enterprise.
All provinces in China that have developed well in terms of new productivity, new business formats, new models, new drivers, etc. are also regions with relatively developed economies and a very high degree of openness. The business environment has been recognized by domestic and foreign entrepreneurs, and they have improved in competition and If they promote each other in the process of opening up, then the momentum for economic growth will be relatively sufficient.
Reporter from China News Service: With work starting after the Spring Festival, various places are planning their economic work for the whole year as soon as possible. What do you think of this sense of urgency? What does “getting a head start” mean for the economy throughout the year?
Zhang Jianping:
In 2024, China will face complex international and domestic economic development environments and conditions, with great uncertainty and more and more influencing factors. International and domestic factors are intertwined, posing many challenges to the Chinese economy.
China's economic fundamentals are now good, and the International Monetary Fund predicts that China will still be the unique locomotive driving global economic growth in 2024.
However, as the world's second largest economy, China also needs to overcome current international and domestic pressures and strive to seek stable growth.
There is an old saying in China that "a year's plan begins with spring."
In the spring, the Two Sessions are held everywhere, and soon the two sessions will be held across the country.
The Two Sessions will determine the fiscal expenditures for this year and the major industrial development projects and infrastructure projects that will be supported. They will also determine the tone of monetary policy and how it can better coordinate with industrial and fiscal policies, as well as the areas where local governments should implement it. Focus on efforts, etc.
Therefore, it is very critical for all localities to attach great importance to year-round economic development planning in the spring, and to be able to find the right number and effective development paths.
Reporter from China News Service: In 2023, several of China's top economic provinces will have new breakthroughs. Guangdong has become the first province in the country with a gross regional product (GDP) exceeding 13 trillion yuan. In the new year, how should the economically powerful provinces further play a leading role?
Zhang Jianping:
The major economic provinces are the leaders in China’s economic growth and development, and have formed a leading echelon.
In this echelon, the top two economies of Guangdong and Jiangsu have surpassed South Korea in terms of economic aggregate.
But I also want to remind that the population of Guangdong has reached 127 million, the population of Jiangsu is 85 million, and the population of South Korea is only 52 million.
It is believed that through high-quality development in the future, these two provinces will hopefully move towards the per capita level of the Korean economy.
In addition, Shandong, which ranks third in China's economic aggregate, Zhejiang in fourth, Henan in fifth, and Sichuan in sixth, are all provinces with large populations, with industrial agglomeration effects and scale effects, and constant competitiveness in international and domestic markets. Improvement, thereby providing a very important guarantee and support for the development of the entire economy.
In 2024, the country will attach great importance to stimulating domestic and external demand and releasing economic growth momentum in these leading provinces, urging them to continue to make leading contributions to the country's stable growth, stable employment, stable foreign trade, and stable foreign investment.
Reporter from China News Service: Looking at the work reports of local governments, expanding domestic demand is still the top priority. Since the beginning of the year, major projects have started intensively in many places. What does the hot start of investment expansion mean to the economy throughout the year? What is the potential and space for local governments to expand investment this year?
Zhang Jianping:
China is already an economic power, and the economic growth of major economies in the world is mainly driven by domestic demand.
After more than ten years of hard work, China has formed a situation where domestic demand is the main driving force for economic growth. In addition to consumption, the other important driver of this domestic demand is investment.
China is still the largest developing country in the world, which means that although the infrastructure is quite developed, we saw that this spring (during the extreme cold wave weather), there were many traffic jams that could not be solved.
Therefore, in the next step, China's infrastructure investment tasks are still important in areas such as the integrated sea, land and air transportation system and new infrastructure, and it is necessary to plan ahead and accelerate construction.
In the process of developing new productive forces, there are also many strategic emerging industries that require advanced layout.
The country encourages innovation, and these aspects require many leading and major industrial investments.
Not to mention, China requires relatively large investment in farmland water conservancy construction and ecological and environmental protection; some social undertakings such as medical and health care require many construction projects.
It is hoped that through these investments, on the one hand, they can play a driving role in economic growth; on the other hand, behind the investment projects, they will also create jobs, generate income, and form a consumption-inducing effect.
In other words, when this part of the income reaches the hands of residents, their disposable income will increase and they will consume further, forming a better cycle.
Reporter from China News Service: The Central Economic Work Conference proposed that we must persist in deepening supply-side structural reforms and work together to expand effective demand. In recent years, China has continuously made new achievements in high-quality development, but it still faces some difficulties and challenges. How to better break through the breakpoints, blockages, and stuck points in the integration of supply and demand?
Zhang Jianping:
China now ranks first in the world in manufacturing capacity, not only manufacturing for itself, but also manufacturing for the world.
But on the other hand, many Chinese consumers are still dissatisfied with the quality and grade of domestic products, and some of their needs are not met.
Faced with this situation, the country proposed to promote supply-side structural reform in the past few years. In fact, it still emphasized that production companies and industries must target market demand, find new growth points, and use supply to create demand, thereby releasing effective demand. , and contribute to China’s economic growth.
In economics, effective demand means that demand is effective when aggregate supply and aggregate demand match.
Specific to individuals and enterprises, when consumer demand is met, it is effective demand; if demand is suppressed and not met, and no suitable products or services are found and cannot be released, it is ineffective.
The Central Economic Work Conference stated that there is currently "insufficient effective demand", but the potential for effective demand is very huge.
To unleash the potential, supply-side products and services must be more accurately aligned with demand, allowing market demand to be unleashed.
At the end of last year, Harbin effectively combined the supply of cultural tourism products and services with consumer demand during the ice and snow season, forming many bright spots and creating very good effects.
In addition, many domestic fashionable brands are becoming more and more popular and recognized by young domestic consumers, and have even replaced big foreign brands in some fields.
These are all very good cases of combining supply and demand to better meet market demand. I hope more and more industries can develop in this direction.
Reporter from China News Service: Regarding expanding domestic demand, the Central Economic Work Conference also proposed to form a virtuous cycle in which consumption and investment promote each other. How to make consumption and investment achieve "1+1>2"? What new growth points in consumption can we expect this year?
Zhang Jianping:
To boost consumption, we must adhere to the systematic thinking proposed in the report of the 20th National Congress of the Communist Party of China.
First, efforts should be made to expand social security coverage so that residents dare to consume.
Second, efforts should be made to increase residents’ disposable income levels so that residents have the ability to consume.
Third, we must optimize the consumer market environment to protect consumer rights and make consumers more willing to consume.
When these three aspects are integrated, consumption potential will gradually be released.
Over the years, China has been making continuous progress in different directions and fields, but there are still many arduous tasks to be completed in order to truly unleash its consumption potential.
Consumers play an important role in leading industrial development, which we call “consumer choice”.
For example, I recently heard good news that during the Spring Festival this year, China’s green and organic food consumption increased by about 20% year-on-year. This is an exciting figure.
The price of green organic food is definitely higher than that of ordinary food, but the market recognizes it.
But on the other hand, when consumers walk into supermarkets and want to buy authentic, green and organic products that are recognized, the supply side is not yet able to meet this consumer demand.
And the higher the premium for green and organic food, the greater the profit margin, indicating insufficient supply-side investment.
From this perspective, consumption choices will form a gravitational force on the investment, operations, products and services of supply-side enterprises, allowing investment and consumption to interact and influence each other, and ultimately make investment and consumption promote each other.
It is hoped that the mutually reinforcing relationship between the two will be more fully demonstrated in 2024, thereby helping China achieve its goal of stabilizing growth.