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Macroeconomic indicators show signs of stability

Author  :  Zhang Junrong     Source  :    Chinese Social Sciences Today     2016-12-06

Scholars concurred at a recent forum that China’s macroeconomic indicators are showing signs of stable growth in 2016. They called for an economic policy that balances short-term and long-term solutions, supply and demand, and domestic and overseas demand.

Under the theme of growth stabilization and risk prevention, the China Macroeconomic Forum (2016-2017) was held on Nov. 19 at Renmin University of China in Beijing.

At the forum, a research group led by Mao Zhenhua, co-director of the Institute of Economic Research at Renmin University, released the main report “Analysis and Forecast of Chinese Macroeconomics.”

According to the report, the growth rate for the first three quarters of 2016 all stood at 6.7 percent. The rally of many indicators at the year’s end means the economy could be stabilizing.

“For the entire year, our forecast for China’s GDP growth remains at 6.7 percent,” Mao said.

The report shows that the primary, secondary and tertiary industries grew by 3.8, 6.1 and 7.1 percent, respectively, in the first three quarters. Based on these statistics, Mao highlighted the vital role of the tertiary sector in national growth.

Some other important indicators, such as the 9.6 percent growth in investment, reflect the driving force of investment, said Mao.

Noting the complicated macroeconomic situation, Liu Wei, president of Renmin University and director of the university’s National Academy of Development and Strategy (NADS), said that a lot of new scenarios and problems have arisen under the new normal, underscoring the formidable task of stabilizing growth and preventing risks.

The report recommends a macroeconomic control system to defend the bottom lines of growth stabilization and risk prevention. The latter is the precondition of the former, according to the report.

Liu Yuanchun, executive director of the NADS, appealed to academics to go beyond Western standards to view China’s debt problems from the perspective of political economics while evaluating crises through the lens of developmental history.

Growth stabilization has been the core of macroeconomic control since the 2008 global financial crisis, Mao said, adding that China has attempted to stabilize its growth by expanding investments, credit and debt. “On another level, maintaining stable growth can also better mitigate risks,” he added.

Handling the relationship between cutting overcapacity and deleveraging is a critical problem in future macroeconomic control, said Cao Yuanzheng, a senior research fellow at the NADS.

In 2015, China made remarkable progress in cutting excess capacity, reducing steel capacity from 1.1 to 0.8 billion tons. After prices stabilized, related enterprises began to make profits. This year, however, some reduced capacity reentered production once profits rebounded, causing a decline in prices, Cao said.

“We must make determined and consistent efforts in overcapacity reduction, thereby creating the conditions for deleveraging,” Cao added.

Editor: Ma Yuhong

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