Xi Jinping's first detailed description of China's new economic normal policy will be adjusted

Abstract Yesterday morning, Chinese President Xi Jinping attended the APEC Business Leaders Summit and delivered a speech. In the speech, Xi Jinping publicly and comprehensively expounded the "new normal" of the Chinese economy. Xi Jinping believes that &l...
Yesterday morning, Chinese President Xi Jinping attended the APEC Business Leaders Summit and delivered a speech. In the speech, Xi Jinping publicly and comprehensively expounded the "new normal" of the Chinese economy.

Xi Jinping believes that the "new normal" has several main features. First, it has shifted from high-speed growth to medium-high-speed growth. Second, the economic structure has been continuously optimized and upgraded. The tertiary industry and consumer demand have gradually become the mainstay, and the gap between urban and rural areas has gradually narrowed. The proportion is rising, the development results benefit the wider public; the third is from factor-driven, investment-driven to innovation-driven.

A research official close to the top of the board said in an interview with China Business News yesterday that Xi Jinping’s statement clearly defines the Chinese government’s judgment and attitude toward the economic situation, and future policy development will also be based on this. He also believes that Xi Jinping's statement is conducive to unifying consensus and building confidence, while at the same time dispelling the market's illusion of large-scale "stimulus."

Economic growth slows down again and confirms

Xi Jinping said yesterday that in the first three quarters of this year, China's gross domestic product (GDP) increased by 7.4% year-on-year, and all major economic indicators were in a reasonable range.

Xi Jinping also said that the current Chinese economy has maintained a stable development trend, urban employment has continued to increase, and household income, corporate profits, and fiscal revenue have grown steadily. More importantly, there has been a positive change in structural adjustment, a significant growth in the service industry, and a continuous expansion of domestic demand.

This combination of about 7% growth rate, income distribution adjustment and economic restructuring is not a short-term phenomenon, but a sign that the Chinese economy has entered a relatively long-term state different from the past. Xi Jinping summarized it as the Chinese economy. The new normal, and proposed the main characteristics of the three new normals of medium and high-speed growth (different from previous high-speed growth), economic structure optimization and upgrading, and innovation-driven (traditionally investment-driven).

Among these three characteristics, the long-term most concerned is undoubtedly the problem of economic slowdown. Since China replaced Japan as the world's second largest economy in 2010, China's economy has become significantly different from the previous 30 years. The economic growth rate has continued to decline. From 2010 to 2012, the economic growth rate has declined for 11 consecutive quarters, 2012. ~2013 GDP growth rate for less than 8% for two consecutive years.

The problem of the continued slowdown in this growth rate has never been encountered in China's economic development since the reform and opening up. The judgment on the root cause of this problem also directly determines the direction of the Chinese government's economic policy.

In the debate on “reform and stimulus” and “hard landing” in the market, the decision-making level has recently adjusted “the main economic indicators are in a reasonable range” and showed great tolerance to the economic downturn.

Many economists including Li Yining, Cheng Siwei, Yao Jingyuan believe that the slowdown in economic growth does not have to be overly concerned, which is in line with objective laws. Yao Jingyuan recently told this newspaper that once per capita GDP reaches a certain height, economic growth will be converted from high-speed to medium-speed, which is inconsistent with economic law and international development experience.

"The economic growth shift is definitely not letting the economy go down. No car running at high speed suddenly becomes a turtle. Just our focus has changed, and 'quality improvement' will become the main support for economic and social transformation." The research-type official said in the opening paragraph, but acknowledged that the economic entry into the shift period is conducive to winning space for our reforms, is conducive to the adjustment of policy trends, and is conducive to the convergence of consensus and focus on reform.

Four pillars of confidence

With the disappearance of the traditional dividend, the potential of the Chinese economy is not only related to the development of the country, but also to the development of the Asia-Pacific and the world. Although the era of ultra-high-speed growth has become a thing of the past, Xi Jinping pointed out yesterday that the new normal will bring new development opportunities to China, thus maintaining confidence in the Chinese economy at home and abroad.

First of all, under the new normal, although China's economic growth rate has slowed down, the actual increase is still considerable. After more than 30 years of rapid growth, China’s economic volume has not been the same. For example, Xi Jinping said that the increase in China's economy in 2013 was equivalent to the total economic volume in 1994, and it can rank 17th in the world. Even with a growth rate of around 7%, both speed and volume are among the best in the world.

According to the latest research data of Liu Shijin, deputy director of the Development Research Center of the State Council, compared with 2000, the total GDP of China at that time was 10 trillion yuan, an increase of 1 percentage point was 100 billion yuan, and currently it has reached 50 trillion to 60. One trillion, the corresponding increase of 1 percentage point is 500 billion to 600 billion yuan. This shows that China's demand space, including the demand space that each enterprise faces, is continuing to expand, so China's growth still has great potential.

Second, under the new normal, China's economic growth has become more stable and its growth momentum has become more diverse. Xi Jinping said that the strength and toughness of China's economy is the most powerful support for risk prevention. We are working together to promote new industrialization, informationization, urbanization, and agricultural modernization, which is conducive to the resolution of various "growth troubles." The Chinese economy is more dependent on domestic consumer demand and avoids relying on external risks of exports.

The third major opportunity is structural optimization and upgrading, which has always been regarded as an important reform dividend by the academic community. In the first three quarters of this year, the contribution rate of China's final consumption to economic growth was 48.5%, exceeding investment; the added value of service industry accounted for 46.7%, continuing to surpass the secondary industry; the growth rate of high-tech industry and equipment manufacturing industry was 12.3%. And 11.1%, significantly higher than the average industrial growth rate; energy consumption per unit of GDP fell by 4.6%. Xi Jinping believes that these data show that China's economic structure is undergoing profound changes, with better quality and better structure.

Chi Fulin, dean of the China (Hainan) Reform and Development Research Institute, believes that the focus of China's transformation and reform in the next six years will be the opening of the service industry market and institutional innovation. By 2020, whether China can move from an industrial power to a service power will become a historical task and a major challenge for transformation and reform. "It is not only a process of forming a new normal of economic growth, but also a new normal and economic structure. The new normal of structure."

The fourth major opportunity comes from the Chinese government's vigorous decentralization and decentralization under the new normal. Xi Jinping pointed out that, in short, it is to let go of the "invisible hand" of the market and use the government's "visible hand".

The transformation of government functions has always been the "heads" of the reform of the current government. For example, Xi Jinping said, for example, we reformed the enterprise registration system. In the first three quarters, the number of newly registered enterprises in the country was 9.2 million, and the number of new enterprises increased by more than 60% compared with last year.

Raising domestic and foreign attention

The interpretation of the new normal by the top leaders of China in important international occasions such as the APEC meeting, as well as the reforms and policy strengths that have been demonstrated, have also attracted widespread attention at home and abroad.

"The new normal of China's economy means that the current Chinese economy cannot be measured by the past." Zhang Yunling, member of the Chinese Academy of Social Sciences and director of the Department of International Studies, said that the three characteristics of the new normal of China's economy and the new normal are new. The discussion of new opportunities (13.20, -0.33, -2.44%) is refreshing.

In the interview with China Business News, Lin Yizhong, the managing partner of PricewaterhouseCoopers China and Hong Kong, said that although the economic growth rate has slowed down, this is China. A stage that must be experienced in the way of economic growth, such as the fact that the growth rate is the highest, even approaching 14%. At that time, a large part of the growth actually came from infrastructure investment, which is relatively easy to show in GDP. The driving force of the Chinese economy is now more from the consumer and service sectors.

JPMorgan Champion Asia Pacific Chairman Champion Ou Guansheng told this newspaper: "The Chinese government has been taking a very prudent approach to maintain steady economic growth. I am not worried about whether China's economic growth rate is 7.5% or 7%. This growth rate is long-term. Looking healthier and more sustainable, simply accelerating too fast growth often leads to industry imbalances, excessive credit growth, and real estate bubbles."

Bloomberg quoted Shen Jianguang, chief economist at Mizuho Securities Asia, as saying: “7% seems to be the consensus for China’s growth targets next year. This is another signal that Chinese policymakers can tolerate lower growth to advance structural reforms. I think the lower 6.7% is also acceptable."

"Under the new normal, we are not talking about economic growth. We will continue to strive for economic growth to the greatest extent. This is the basis for all reforms and is related to the realization of long-term and short-term goals." The above-mentioned research officials close to the top said, but new What should be more concerned in the normal state is the changes in economic structure, form and subject.

In addition to specific economic growth indicators, there are also overseas media attention to China's future policy orientation.

Reuters and AFP reported that Xi Jinping’s speech mentioned in particular that Xi Jinping said that China’s economic risks are “not so terrible”. Reuters noted that Xi Jinping did not express any views on specific macro-control policies, but stressed that the Chinese government will insist on deepening reforms. For some time, due to worries about China's economic slowdown, many economic analysts have called for China to cut interest rates, but China's monetary policy has not been moved.

Singapore's "Straits Times" believes that under the leadership of Xi Jinping, China has shown great determination to be freed from the GDP frenzy, to add other indicators in the official performance appraisal, and to urge some industries that were originally led by the state to open to the market.

Therefore, in the view of Li Mingjiang, a Chinese expert at Nanyang Technological University in Singapore, the new normal is also reminding officials at all levels not to expect the policy winds to turn quickly. “The new leadership uses the 'new normal' to convey its new style of governance,” he said.

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