Wang Yiming: The return of the economy to normal is facing challenges, and it is necessary to increase financial support to stabilize growth

Reporter Wang Yu

Wang Yiming, vice chairman of the China Center for International Economic Exchanges and former deputy director of the National Development Research Center, pointed out that at present, the momentum of China's economic recovery has weakened, and the return of the economy to normal is facing challenges. He called for greater financial support, accelerated the issuance and use of local bonds, and at the same time provided credit support to key areas such as small and medium-sized enterprises.

On Monday, Wang Yiming said at the "Monthly Economic Talks" event held by the China Center for International Economic Exchanges that in the third quarter, the main economic indicators slowed down due to the weakening of the base effect and the rebound of the new crown epidemic in local areas, flood disasters and other factors. The lagging effect of the slowdown in indicators such as total retail sales of consumer goods and national fixed assets may continue into the fourth quarter, and if the epidemic is spread again, the economic growth rate will be further affected.

According to data from the National Bureau of Statistics, the total retail sales of social consumer goods in January-August this year increased by an average of 3.9% in two years, down 0.4 percentage points from January to July, of which the average growth rate of the two years in August was only 1.5%, down 2.1 percentage points month-on-month. From January to August, fixed assets increased by an average of 4% in two years, down 0.3 percentage points from the previous seven months, of which the average growth rate of infrastructure investment in the two years from January to August was only 0.2%, down 0.7 percentage points from the previous seven months.

"The imported epidemic has a great impact on the consumption of the tourism service industry, and it may be difficult to return to the pre-epidemic level in the short term, which will affect the process of China's economic recovery, considering that this situation may also recur, which requires macro policies not only to increase the intensity of counter-cyclical adjustment, but also to do a good job of cross-cycle adjustment." He said.

Wang Yiming said that cross-cycle adjustment is also the need to cope with the rising uncertainty of the global economy and the economic cycle and policy cycle of China and major economies. He pointed out that China's economy recovered earliest and fastest, 2-3 quarters ahead of major economies such as the United States, which also means that there is a difference in the rhythm of macro policy normalization.

From the perspective of policy cycle, Wang Yiming pointed out that China's monetary policy has been gradually normalized in the second half of last year, and since the beginning of this year, fiscal policy has also been adjusted, the deficit rate and the scale of issuance of special bonds by local governments have been lowered, and the issuance of special treasury bonds has been cancelled. The normalization of monetary policy in major economies such as the United States may not begin until the fourth quarter of this year.

"If the Fed makes monetary policy adjustments, it will have a negative spillover effect on the global economy." This led to a sharp decline in asset prices, capital outflows from emerging economies, and currency depreciation. At the same time, the flow of capital across borders has an impact on the economic and financial stability of our country. He said.

Wang Yiming believes that the cross-cycle adjustment of macro policies should not only consider the current economic situation, but also reserve policy space for next year, so it is necessary to grasp the rhythm and intensity of policies and enhance the pertinence and effectiveness of policies, so that China's economy will continue to recover steadily in the fourth quarter and next year.

He said that in terms of fiscal policy, it is necessary to increase active financial support and speed up the progress of fiscal expenditure, especially the issuance and use of special bonds of local governments. In terms of monetary policy, it is necessary to implement a prudent monetary policy, maintain reasonable and sufficient liquidity, comprehensively use a variety of monetary policy tools to flexibly and accurately adjust liquidity, increase credit support for key areas such as small and medium-sized enterprises, manufacturing, green industries, etc., and increase differentiated financial support for areas with financing difficulties.

He particularly stressed that it is necessary to maintain the overall stability of prices, implement measures to guarantee the supply of bulk commodities, increase the release of coal and non-ferrous metal reserves and increase imports, and at the same time coordinate the relationship between the dual control of energy and the supply of bulk commodities to increase effective supply.

In addition, Wang Yiming stressed that it is necessary to do a good job in balancing steady growth and risk prevention. At present, the debt pressure of local governments has increased significantly, and the risk of corporate bond default is also rising, especially the risk of individual super-large housing enterprises has increased significantly. "It is necessary to make overall plans to resolve local government debt risks, improve the anti-risk ability of the financial system, and actively and steadily resolve the debt risks of individual housing enterprises in a more orderly manner, while increasing the supplement of capital of small and medium-sized banks and improving the efficiency of disposal of non-performing assets." He said.