This year's "Government Work Report" sets the expected target of economic growth at about 5%, and clarifies ten major tasks to point out the direction for high-quality economic and social development.
Looking back on 2023, against the backdrop of multiple difficulties and challenges, the mainland's economy has developed in waves and zigzags, with a total economic volume of more than 126 trillion yuan and an economic growth rate of 5.2%. The achievements have not been easy to come by, but difficulties and challenges still exist, such as insufficient effective demand and weak social expectations.
The beginning is related to the overall situation, and the start determines the future trend. This year marks the 75th anniversary of the founding of the mainland and a crucial year for achieving the goals and tasks of the 14th Five-Year Plan. At this critical juncture, what are the key points that should be exerted to achieve the economic growth target of about 5 percent? What pain points and difficulties should be solved to further unleash the consumption potential of residents? How to speed up the development of new quality productive forces? Focusing on these issues, a reporter from the "Financial Times" conducted an exclusive interview with Liu Shijin, deputy director of the Economic Committee of the 13 th CPPCC National Committee and former deputy director of the Development Research Center of the State Council.
To achieve the growth target of about 5%, the focus is on tapping the "new growth potential"
This year's "Government Work Report" put forward an expected economic growth target of about 5%, which has attracted widespread attention. It is expected that China will launch a series of policy measures to achieve this goal.
Liu Shijin said that the economic community generally believes that the current potential growth level of China's economy is about 5 percent. The Government Work Report's setting of the expected growth target is not only in line with the macroeconomic background of the mainland, but also plays a role in guiding expectations and boosting confidence. Of course, achieving this goal is difficult and challenging, and you need to "jump on tiptoe".
So how can the potential growth rate become a realistic growth rate? How can the growth target of about 5 percent be realized? Liu Shijin believes that it is still necessary to keep a close eye on the "new growth potential," which mainly includes two aspects: one is to catch up with the potential, and the other is the two new driving forces spawned by the new technological revolution, that is, digital technology and green transformation.
"The so-called catch-up potential is what the advanced economies have already done, we have not yet done, but there are conditions and possibilities to do. Liu Shijin said that in 2023, the mainland's per capita gross domestic product (GDP) will be about 13,000 US dollars, and by 2035, the mainland's per capita GDP will reach the level of moderately developed countries, about 30,000-40,000 US dollars, and there is at least more than 20,000 US dollars of growth space in the middle, which is what we call catch-up potential.
The catch-up potential is mainly composed of the development of the service industry driven by the upgrading of the demand structure of residents, as well as the transformation and upgrading of traditional industrial sectors such as industry and agriculture. In recent years, due to the rapid growth of China's economy, the space for catching up with potential has narrowed, but it is still an important source of power for China's economic growth, and it is relatively certain.
From the perspective of digital technology and green transformation, the two new driving forces, have also shown strong momentum of development in recent years. "In the past technological revolutions, we are all latecomers, and there is a big gap between us and the pioneers. However, in the two major areas of digital technology and green transformation, we are not far behind the first mover, and some aspects are already neck and neck or partially ahead. Liu Shijin said.
Regarding the relationship between catch-up potential and the new kinetic energy generated by the new technological revolution, Liu Shijin said that the two represent the growth space and growth opportunities of China's economy, and they are not two parallel lines that do not intersect, but integrate and promote each other, and jointly constitute the competitive advantage of China's economy. In particular, the advantages of the mainland's super-large-scale market will help promote technological innovation and improve innovation efficiency. In recent years, the mainland has been proving that new products and technologies in the fields of digital technology and green transformation have emerged, showing its leading edge in the world, and this advantage will appear in more new fields in the future.
While paying attention to macroeconomic policies, it is also necessary to promote structural reforms
The important role of macroeconomic policies cannot be ignored in order to achieve the expected development goals. The "Government Work Report" pointed out that the active fiscal policy should be moderately strengthened, and the quality and efficiency should be improved. A prudent monetary policy should be flexible, moderate, precise and effective. Enhance the consistency of macroeconomic policy orientation.
Especially when social demand is insufficient and growth momentum declines, the voices of all walks of life for strengthening macroeconomic policy regulation and control have increased, and it is expected that policies can play a greater role. In Liu Shijin's view, we need to pay attention to macro policies, but we also need to figure out what problems macro policies cannot solve. It is worth noting that the role of macroeconomic policies in economic development is clearly different between China and developed economies.
Liu Shijin specifically said that developed economies are also mature economies, most of which are in a period of low-speed growth, and the state of economic growth is closely related to the orientation of macroeconomic policies, and it can be said that the trend of macroeconomic policies basically determines the overall economic trend and overall situation. At present, China still has at least the potential for medium-speed growth, and macroeconomic policies mainly play a role in macroeconomic stability and balance.
"Our current growth potential is about 5%, if we have to make a quantitative comparison, the impact of macroeconomic policies on GDP is about 1 percentage point, and the remaining 4 percentage points need to be achieved through technological progress, institutional policy conditions, etc. Liu Shijin believes that to achieve economic development goals, of course, we must pay attention to macroeconomic policies, but more attention should be paid to promoting structural reforms.
In order to enhance the consistency of macro policy orientation, Liu Shijin said that in the era of informatization, digitization and intelligence, the complexity of economic activities has increased exponentially, and the ways and means of formulating and implementing policies need to be adjusted accordingly. For example, when formulating a certain policy, it is necessary to first collect a large amount of data, fully communicate with the market, and stabilize corporate expectations. It is still an old saying that we should adopt market and legal methods as much as possible, and hand over to the market what can be solved by the market, hand over to the law what can be solved by law, and use administrative means to improve the forward-looking and effective as much as possible. Liu Shijin said.
Focus on promoting development-oriented consumption and make up for the shortcomings of basic public services
"The main problem of China's economy at present is the problem of the demand side, that is, the problem of insufficient demand. Liu Shijin said.
International experience shows that when a country moves from the middle-income stage to the high-income stage, the wage income of workers and the proportion of household consumption in the total economic output will rise significantly, and such changes have begun to appear in China in recent years. The first problem to be solved in expanding consumption is to increase residents' income, and in addition, it is necessary to improve the scale and quality of basic public services and solve residents' worries.
Consumption can be divided into subsistence consumption and development consumption. Among them, survival consumption refers to the consumption of clothing, food, housing and transportation to meet the basic survival needs, mainly individual consumption. Developmental consumption includes the needs of education, medical care, improved housing, pension, recreation, etc., and is more likely to adopt collective consumption or public services, a considerable part of which is closely related to the basic public services provided by the government.
"Because basic public services have not kept up, the growth of developmental consumption is relatively slow, which is a very important problem that restricts the growth of China's consumption. Liu Shijin believes that the focus of expanding consumption should be on development-oriented consumption, and it is necessary to make up for the shortcomings of the government's basic public services, which should focus on the group of migrant workers entering the city, especially the nearly 200 million migrant workers who have entered the city but have not stabilized, and they are facing a greater gap in basic public services.
The investment philosophy has shifted to a people-centric approach
"Developmental consumption such as education, medical care, improved housing, pension, and entertainment is not only consumption, but can also be regarded as an investment and human capital investment. Developmental consumption is actually raising the level of our human capital. Liu Shijin said that this requires the government to change its investment philosophy, from a material-based investment method to a people-centered investment model, and pay attention to cultivating human capital.
"A city already has 10 subways, and two more need to be built; another plan is to use the money from the two subways to solve the problems of housing, medical care, and social security for migrant workers. Obviously, the latter option has a stronger and far-reaching impact on the cultivation of human capital and domestic demand. Liu Shijin gave an example.
In recent years, there has been a number of policy efforts to expand profitable investment. Liu Shijin said that in the past, the troika of fixed asset investment - infrastructure investment, real estate investment, and manufacturing investment - has undergone significant changes, and service industry investment has replaced the position of real estate investment. The peak period of real estate investment has passed, and it is still in the negative growth stage, and it should be able to return to normal growth in the future, but it is no longer possible to play the same role in investment as in the past. Judging from local feedback, infrastructure investment is also generally facing the problem of lack of money and projects.
Liu Shijin believes that infrastructure investment is still an important area for expanding investment, but it should be combined with the construction of metropolitan areas to improve investment efficiency. Investment in the manufacturing sector should be invested in digital technology and green transition related areas to drive productivity improvement. In recent years, investment in the service industry has grown rapidly and has strong stability, and the next step is to pay attention to this field.
More than ever, attention should be paid to protecting and promoting the entrepreneurial spirit
Speeding up the development of new quality productive forces was written into the "Government Work Report" and listed as the first of the ten major tasks of government work.
Talking about the foothold of the development of new quality productivity, Liu Shijin said that whether it is the development of new quality productivity or the realization of high-level self-reliance and self-improvement in science and technology, it must ultimately be implemented by a group of innovative enterprises.
In the interview, Liu Shijin specifically mentioned the need to stabilize entrepreneurs' expectations, boost entrepreneurs' confidence, and make greater efforts to protect and promote the entrepreneurial spirit. "At this stage, China needs entrepreneurship more than ever. Liu Shijin emphasized.
In addition, China will continue to give full play to its advantages in engineering capabilities. "At present, there is still a big gap between our cutting-edge innovation capabilities, especially the ability to make scientific discoveries, compared with developed economies, but our ability to follow, especially the ability to engineer, is relatively strong. Don't underestimate this ability, not all people can keep up. Liu Shijin said that this ability is based on China's complete industrial system and strong supporting capabilities, and this advantage needs to be maintained.
Liu Shijin also mentioned that compared with the ability to imitate from "1 to 2", what the mainland lacks is the original ability to go from "0 to 1". It is more important to attach importance to basic science, and it is more important to gather first-class talents, not only in China, but also in the world. "We need to be at the forefront of science and technology, the so-called 'no man's land', to carry out pioneering research and development to improve our ability to move from '0-1', which is a long-term battle. Liu Shijin emphasized.
Source: Financial Times client
Reporter: Xu Beibei
Editor: Yang Jingyi
Email: [email protected]