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Forum eyes China’s macro economy under the new development pattern

Author  :  WEI SIYU     Source  :    Chinese Social Sciences Today     2020-12-31

At a forum in late November, experts shed light on China’s macro-economic situation and gave policy suggestions under the new development pattern, which smooths domestic circulation and lets domestic and international circulations reinforce each other.

Liu Wei, president of Renmin University of China (RUC), said that when facilitating the new development pattern of dual circulation, the government needs to provide top-level design, a unified layout, organization, and coordination. At the same time, enterprises need to play their role as the main bodies of basic innovation. It is necessary to consolidate basic research, while accelerating the application of scientific and technological achievements. It is important to vigorously improve independent innovation capabilities, while sustaining open innovation, and strengthening international exchanges and cooperation on science and technology.

Liu Yuanchun, RUC vice president, said that the rapid recovery of China’s economy has created the best strategic timing and macro foundation to launch the new development pattern of dual circulation. The economic recovery’s core force still comes from China’s unconventional pandemic relief policy, which determined that the nation’s expansionary macroeconomic policy positioning should not be changed significantly, rather, marginal policy adjustments must be initiated. The 2021 macroeconomic policy must prioritize stabilizing prices and employment, with the basic goal of comprehensively expanding domestic demand and narrowing the gap between supply and demand. He also suggested attaching great importance to the rapid rise of government debt ratios, and remaining aware of structural issues.

The International Monetary Fund predicted that China will be the only economy that will achieve positive growth in 2020, said Zhu Guangyao, China’s former vice finance minister. Judging from the performance of the first three quarters and the foregone conclusion of the fourth quarter, China’s actual growth rate in 2020 will be higher than the International Monetary Fund’s forecast.

Cai Fang, vice president of the Chinese Academy of Social Sciences, said that in light of China’s surveyed urban unemployment rate, the country has seen a relatively perfect inverted V-shaped curve, which is also a manifestation of its V-shaped economic recovery, as it has avoided the K-shaped recovery which emerged in many other countries.

In the future, there are two more tasks, Cai continued. One is to continue to cope with periodic unemployment. It is advisable to redirect some relief policies currently targeting enterprises to directly assist families and individuals. Only by restoring the income and consumption of families and individuals can there be a sustainable economic recovery. The second task is to reduce the natural unemployment rate by providing better public employment services, better training, and better job placement, thus further promoting the restoration of income and consumption.

By 2035, 800 million rural people will embrace modernization in China, which sets an important foundation for the formation of the new development pattern, said Cao Yuanzheng, former chief economist of the Bank of China. Only by further strengthening the free flow of factors, such as land and labor, can the long-term development of China’s economy be supported.

Wang Yiming, former deputy director of the Development Research Center of the State Council, elaborated on coordinated regional development. It is necessary to strengthen the role of coastal areas as a key hub. It is important to accelerate the layout of central and western regions and cultivate more strategic growth poles. He also suggested continuing to enhance the role of metropolitan circles and urban agglomerations as the hubs and strategic fulcrums for dual circulation.

We must accelerate the construction of three-dimensional transportation corridors connecting domestic and international markets, Wang continued. Narrowing the digital divide among regions should also be a focus. He also suggested strengthening the market’s function in resource allocation, so that factors of production will be concentrated in high-return regions and high-efficiency regions. In addition, regional policies should be consistent with the requirements of constructing a unified national market.

Editor: Yu Hui

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