Looking back at 2023, this year when the impact of the epidemic has subsided and the economic order has returned to its place, the economy has gradually recovered in the midst of shocks.
Looking forward to 2024, where will China's economy go, and what new changes or possibilities will there be in areas that are closely related to our lives?
What is certain, what is unknown and uncertain? Top News launched "Certainty and Uncertainty - Ask Questions 2024 - Top Finance New Year's Eve Forum", inviting experts, scholars and industry leaders in the economic field to present their forward-looking analysis to everyone.
Top News Chief Reporter Yang Guifang
The Central Economic Work Conference proposed that in 2024, we will persist in seeking progress while maintaining stability, promoting stability with progress, and establishing first and then breaking down.
In terms of consumption, the meeting mentioned that efforts should be made to expand domestic demand, stimulate potential consumption, and expand productive investment, so as to form a virtuous circle in which consumption and investment promote each other. In terms of building a modern industrial system, the meeting proposed to "lead by scientific and technological innovation and improve the resilience and safety of the industrial chain and supply chain".
The direction has been pointed out, how to explore the future road, what are the implications for the high-quality development of the regional economy? Top news reporters interviewed Deng Shubin, chief economist of Zhongyuan Securities, to explore the focus of China's economic momentum.
Top News: What do you think of the "stability, progress and establishment" proposed by the Central Economic Work Conference?
Deng Shubin: 2023 is the first year of the full implementation of the spirit of the 20th National Congress of the Communist Party of China, and the year of economic recovery and development after the three-year prevention and control of the new crown epidemic.
To this end, the Central Economic Work Conference put forward the "mainland economic rebound" at the same time, but also pointed out that "to further promote the economic rebound for the better, we need to overcome some difficulties and challenges, mainly due to insufficient effective demand, overcapacity in some industries, weak social expectations, there are still many hidden risks, there are blockages in the domestic circulation, and the complexity, severity and uncertainty of the external environment are rising." It is necessary to enhance the sense of distress and effectively respond to and solve these problems", which also means that the central government is very clear about the complexity and severity of the internal and external problems and situations facing it in 2024.
To this end, this meeting proposed that in 2024, we should focus on "consolidating and enhancing the positive trend of economic recovery", "adhere to the principle of seeking progress while maintaining stability, promoting stability with progress, establishing first and then breaking down, and more policies that are conducive to stabilizing expectations, stabilizing growth, and stabilizing employment, and actively making progress in changing modes, adjusting structures, improving quality, and increasing efficiency", "We must strengthen the counter-cyclical and cross-cyclical adjustment of macro policies, and strengthen the innovation and coordination of policy tools".
"Persist in seeking progress while maintaining stability, promote stability with progress, and establish first and then break through", this formulation emphasizes more on "stability" than in the past, and further emphasizes "progress" and "establishment", sending a more positive policy signal. Properly grasping the dialectical relationship between "stability" and "advancement" and "establishment" and "breaking" is an important methodology in economic work. "Stability" is the foundation, is the overall situation, "progress" is the direction and driving force, the two promote each other, "progress" is the driving force and direction of "stability", to "progress" to promote "stability", will truly achieve "stability".
As far as economic work in 2024 is concerned, what is "stable", "stable expectations, stable growth, and stable employment"; "Progress" is embodied in the "progress" in structural upgrading, development quality, and key reforms, creating a series of conditions for better achieving "stability". "Establishment" and "breaking" emphasize the order of doing things, "first establish and then break", that is, in the process of promoting economic development and reform, we must solve problems in development, and then promote structural reform and stock adjustment under the premise of stabilizing the total amount and ensuring increment, that is, we must do a good job in the connection and switching between the old and new models, first establish the necessary systems and rules, and then gradually break down the original institutional and institutional obstacles, ensure the sustainability and stability of economic development, and avoid blind rashness and "one-size-fits-all".
"Establish first and then break" was mentioned in the mid-2021 Politburo meeting, when the emphasis was on "establishing first and then breaking", and its focus was to propose to promote green and low-carbon transformation based on the mainland's energy resource endowment and actual situation. In the Central Economic Work Conference, the "first establishment and then breaking" was put in the position of the general tone, which means that in the overall promotion of economic work, including small and medium-sized banks, local bonds, and real estate risk mitigation process, the priority of the establishment of new mechanisms and new models will be significantly improved.
To sum up, we believe that next year's economic work and regulation and control policies will further focus on economic vitality and expectation management, be proactive, use both counter-cyclical and cross-cyclical adjustments, and take into account both short-term and long-term, so as to promote stability, stabilize expectations, stabilize growth and stabilize employment, so as to consolidate the foundation for economic recovery.
Top News: The Central Economic Work Conference mentioned "stimulating potential consumption". What do you think is the stamina of consumption in 2024 and how to solve the problem that people are willing to consume?
Deng Shubin: In the measures to expand domestic demand, the Central Economic Work Conference particularly emphasized that it is necessary to "expand effective investment and form a virtuous circle in which consumption and investment promote each other", and further proposed that the focus of consumption pull is determined to "stimulate potential consumption", which mainly includes two categories: first, cultivate and expand new consumption, and "vigorously develop digital consumption, green consumption, and healthy consumption, and actively cultivate new consumption growth points such as smart homes, cultural and entertainment tourism, sports events, and domestic "trendy products"; Second, to stabilize and expand traditional consumption, it is necessary to "boost bulk consumption such as new energy vehicles and electronic products". That is, from the perspective of policy orientation, the key measures to expand domestic demand focus on guiding the improvement of consumption structure and the formation of a good interactive relationship between consumption and production and investment, and it is expected that the above-mentioned new consumption, traditional bulk consumption and investment areas related to promoting consumption will receive further attention and support from the policy, such as the construction of "three major projects" and the construction of electric vehicle charging facilities. However, whether the above-mentioned measures can meet expectations has a great relationship with residents' willingness to consume and spending power.
Residents' willingness and ability to consume depends at least on income and income expectations, consumer demand and consumption preferences, consumption convenience and experience, etc., for the policy, in addition to paying attention to the construction of consumption scenarios and experience, the most fundamental thing is to pay attention to how to help residents increase their income and improve income expectations, therefore, the issuance of consumption vouchers and consumption subsidies, the expansion of the size of middle-income groups and the related employment improvement, corporate profitability improvement are all important means to enhance the overall consumption of the society.
Top News: How much is the expected economic growth rate to reach in 2024, and how do you see the growth trend of China's economic prosperity?
Deng Shubin: It is expected that the economic growth target in 2024 will be about 5%, and the economic prosperity will pick up momentum.
It is mainly based on the following three considerations: first, the external environment is relatively friendly, the Fed has stopped raising interest rates and is expected to start cutting interest rates in the middle of next year, and the stability of Sino-US relations is improving; Second, some economic indicators since the fourth quarter of 2023 show that the effect of the previous policy has begun to appear; Third, the central economic work is a positive signal for next year's "consolidation of the momentum of economic recovery" and the deployment of related supporting measures.
Top News: What are the main factors influencing the current stock market downturn and how can it boost investor confidence?
Deng Shubin: The driving factors of A-share operation and stock index performance not only involve fundamental factors such as economic fundamentals, fundamentals of listed companies, and policy regulation, but also market-level factors such as the market's own structure and operating mechanism, as well as investor expectations related to the above two factors.
On the one hand, investors' worries about the post-epidemic domestic macroeconomic recovery still exist. On the other hand, investors have doubts about the imbalance between the investment side and the financing side of the current A-share market, the low return on investment, and the improvement of the trading mechanism.
The key to boosting investor confidence is to give full play to the wealth effect of the stock market, so that investors can really make money in the secondary market, and a good money-making effect can attract more incremental funds to continue to enter the market.
Top News: The Central Economic Work Conference set the tone for economic work in 2024, and listed "leading the construction of a modern industrial system with scientific and technological innovation" as the first of the nine key tasks. At present, Henan is building 28 industrial chains, what do you think is the need to improve and deepen Henan's industrial chain construction in the process of helping China build a modern industrial system?
Deng Shubin: We can focus on the industrial strengthening, supplementing, extending and industrial chain efficiency improvement of the seven major manufacturing clusters, taking the chain length system as the starting point, further giving full play to the "three chains" integration effect of the industrial chain "chain length + chain main + chain creation", and forming a market-oriented industry and finance integration mechanism, so as to promote the high-quality development of key industries in the province.
Specifically, we can start from at least the following aspects:
The first is to improve the multi-level chain length system, promote the establishment of a multi-level chain length system policy system with different administrative levels and different support perspectives, guide all cities to combine their own resource endowments, maintain their own industrial development boundaries, and form a distinctive, organically coordinated, and gradually expanding industrial chain pattern on the whole, so as to avoid the problem of blind construction and industrial development in various cities.
The second is to clarify the boundaries between the government and the market, and give full play to the role of the "chain chief" in macroeconomic regulation and overall coordination.
The third is to give full play to the demonstration and leading role of "chain master" enterprises to promote the coordinated development of the upstream and downstream of the industrial chain.
The fourth is to establish and improve the "chain creation" mechanism under the leadership of the chain length system to promote the two-way integration of the industrial chain of superhard material innovation chain.
Fifth, strengthen the integration of industry and finance, and improve the capital chain required for the smooth operation of the industrial chain.
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