per capitaGDPMeasured, China is only one step away from the threshold of high-income countries, but it still has a long way to go to achieve the goal of reaching the level of moderately developed countries by 2035.During the two sessions this year, Liu Shijin, deputy director of the Economic Committee of the National Committee of the Chinese People’s Political Consultative Conference and former deputy director of the Development Research Center of the State Council, accepted thesecuritiesIn an exclusive interview with a reporter from The Times, he elaborated on macro hot topics such as the government work report, the short-term economic situation, and China’s medium and long-term development potential.
In the interview, Liu Shijin repeatedly mentioned that although the increase in my country’s per capita GDP in the future will be driven by actual economic growth, it may be more likely to come from the improvement of total factor productivity brought about by insisting on high-quality development, and then obtain the benefits brought about by the appreciation of the exchange rate. income growth effect. Adhering to high-quality development is inseparable from tapping the structural potential of economic growth, and the government’s economic target positioning and measurement indicators should also be adjusted accordingly.
Growth target of around 5.5%
To “jump and jump” to achieve
securitiesTimes reporter: This year’s government work report willgross domestic productThe growth target is set at about 5.5%. How do you view the difficulty of achieving this economic growth target?
Liu Shijin: The GDP target growth rate in 2022 is about 5.5%. It is still difficult to achieve it under the high base last year. This is a goal that can only be achieved by “tiptoeing and jumping”. However, this goal is also flexible. On the one hand, we must strive to achieve it, but at the same time, we must also insist on high-quality economic development.
Why should we emphasize insisting on high-quality economic development? A phenomenon that was widely ignored in economic growth last year is that if calculated in current US dollars, my country’s GDP will increase by 3 trillion US dollars in 2021. This net increase has never been seen in Chinese history, and it is also rare in world history. of.
The reason why my country’s GDP was able to grow by 3 trillion US dollars last year has something to do with the appreciation of the RMB exchange rate. This also means that China’s economy has entered a new stage of growth, which is characterized by the fact that the future growth of per capita GDP will come from real economic growth on the one hand, and exchange rate appreciation on the other hand. The current situation in China is similar to that of Germany and Japan when the per capita GDP reached 10,000 US dollars.The study found that in the 16 years after the per capita GDP of Germany and Japan reached 10,000 US dollars, the per capita GDP of both countries maintained a relatively high growth rate in current US dollars, and less than half of the factors were contributed by the actual economic growth. More than half of the factors are determined by the nationalcurrencyContribution to appreciation.
The above characteristics can lead to two inspirations: on the one hand, the domestic economy must maintain a certain rate of economic growth; on the other hand, it is necessary to maintain high-quality economic development. The main manifestations of high-quality development are that the macro economy is basically stable, the micro entities are full of vitality, and the economic structure continues to transform and upgrade. The most important measure of high-quality development is the increase in total factor productivity, which in the long run will promote the appreciation of the exchange rate. Therefore, the basis of exchange rate appreciation is to adhere to the high-quality development of the economy and realize the improvement of total factor productivity.
Therefore, on the one hand, economic growth should seek truth from facts and strive to achieve its goals; Blindly pursuing an excessively high growth rate will cause the domestic economy to fluctuate greatly, the efficiency of resource allocation will decline, and total factor productivity will decline. Even if the domestic economic growth rate is high, it may lead to a depreciation of the exchange rate, so that the per capita GDP calculated in current US dollars may be reversed. will decline, and such examples are not uncommon internationally. If the economy maintains stability and seeks progress, and achieves high-quality development at the same time, the effect of exchange rate appreciation will be obtained, and the final economic growth rate will still be very fast in current US dollars.
If my country can achieve its economic growth target of around 5.5% and the RMB exchange rate remains basically stable, it will be a high probability event that my country’s per capita GDP will enter the ranks of high-income countries this year. According to the “14th Five-Year Plan” and the long-term goal of 2035, my country will basically achieve socialist modernization by 2035, and the per capita GDP will reach the level of moderately developed countries. In the process of achieving this goal, if we can adhere to high-quality development, we will gain the effect of increasing revenue brought by exchange rate appreciation, thereby driving per capita GDP to grow faster. The appreciation of the RMB exchange rate will increase its purchasing power in the world, which is very important for residents to improve their living standards.
short-term monetary policy
Focus on stabilizing real estate
securitiesTimes reporter: In your opinion, in order to achieve this year’s economic growth target, what role should macro policies such as fiscal and monetary policies play?
Liu Shijin: Judging from the situation in the past few years, the potential growth rate of China’s economy has gradually shifted from high-speed to medium-speed. Macroeconomic policies are generally compatible with the needs of economic growth. Especially during the epidemic, the degree of macroeconomic policies has been well grasped, and there is basically no situation where macroeconomic policies are too tight to restrict growth potential.
In the first half of this year, macro policies should play an important role in preventing slippage.On the basis of the previous RRR cuts and guided interest rate cuts, the structural orientation of monetary policy should provide the necessary liquidity for the soft landing of real estate and the stable development in the medium and long term. Housing for urban migrant workersConstruction. Fiscal policy should take advantage of the revenue increase in the previous year to support a number of infrastructure projects with returns and long-term potential, such as focusing on supporting transportation and communication projects in the development of metropolitan areas and urban agglomerations; on the other hand, the focus will gradually shift to improving basic public services. Strengthen human capital construction. Simply put, in the short term, monetary policy will focus on stabilizing real estate, and fiscal policy will focus on stabilizing infrastructure.
Securities Times reporter: Since the end of last year, the real estate policy has been corrected, and many cities have relaxed real estate financial policies. What do you think of the future development space of my country’s real estate industry?
Liu Shijin: The decline of the economy in the second half of last year has something to do with the cold real estate market. Changes in the real estate industry have both short-term policy factors, but more attention should be paid to long-term factors. The historical peak of real estate investment appeared a few years ago, but the reason why the growth rate of real estate investment in the past few years and even during the epidemic has been relatively resilient is largely due to the support of structural market conditions. real estate investment growth,house priceThe rising areas are still mainly in metropolitan areas and urban agglomerations, which are related to population flow. Some metropolitan areas and urban agglomerations are still in the process of expansion. With the inflow of population, the demand for housing will increase. However, I think the peak of this structural growth may have already arrived.
Therefore, even if it is hoped that the growth rate of real estate investment can be stabilized and returned to positive growth this year, it is expected that it will be difficult to return to the level before the epidemic. Real estate investment may reach a new plateau of growth that is relatively lower than it was before the pandemic. However, even so, the real estate industry will still be one of the industries with the longest industrial chain and the strongest industrial driving ability for a long time to come. With the normalization of the financial attributes of real estate, after the house returns to the original attribute of living, there will be some room for real estate development, especially the basic public services such as housing after a large number of migrant workers enter the city have not been well resolved. It is recommended to build affordable housing projects for migrant workers in metropolitan areas and urban agglomerations. Only by allowing migrant workers and other new citizens to settle down and improve basic public services for low- and middle-income groups can their income levels and human capital be better improved. ; At the same time, in the short term, this is also beneficial to the expansion of effective investment.
Securities Times reporter: Last year, my country’s foreign trade exports grew strongly, exceeding market expectations. As foreign economies gradually return to normal, what do you think of my country’s foreign trade export situation?
Liu Shijin: As the foreign economy gradually returns to normal, China’s foreign trade exports will also gradually return to normal, that is, the export growth rate will remain in the single digits, which is why the emphasis is on expanding domestic demand. In the long run, with the enhancement of my country’s comprehensive national strength, the RMB will enter a long-term appreciation track, which requires domestic enterprises, especially foreign trade enterprises, to find ways to improve labor productivity. Germany has experienced currency appreciation for quite some time, but exports have also been growing over the same period because its labor productivity has increased in line with exchange rate appreciation.
The most important growth driver
from unleashing structural potential
Securities Times reporter: The economy is currently facing triple pressures. How do you think it should be resolved to achieve stable economic growth?
Liu Shijin: China is still maintaining a higher economic growth rate than developed economies at this stage. The most important growth driver does not come from the regulation of macro policies, but from the release of structural potential. Therefore, the most important function of macro policy is to maintain the short-term balance and stability of the economy, and the foothold of stabilizing growth and expanding domestic demand should be shifted to exploring the structural potential of the medium-speed growth period.
The tendency to rely heavily on China’s economic growth on loose macro policies while ignoring structural potential needs to be corrected. If we have to rank it, structural potential comes first, and macro policy comes second or third. After the main structural potentials in the high-speed growth period such as real estate, infrastructure, and exports have gradually weakened or subsided, during the “14th Five-Year Plan” and even a longer period, efforts should be made to explore and release the structural potentials that match the medium-speed growth period.
Regarding stable expectations, I think it is still necessary to adhere to economic construction as the center, unswervingly consolidate and develop the public economy, unswervingly encourage, support and guide the non-public economy, and unswervingly promote a higher level of opening up.
Securities Times reporter: How do you think the structural potential should be released?
Liu Shijin: The so-called structural potential refers to the growth potential that China, as a late-developing economy, has in the process of consumption structure, technological structure, industrial structure upgrading and urbanization. $300,000 to $40,000 potential.
The Structural Potential Framework is summed up as “1+3+2”. “1” refers to the development of metropolitan areas and urban agglomerations as the leader to open up space in terms of geography and kinetic energy for China’s medium-speed and high-quality development in the next step. For a long time to come, this space can provide most of the growth momentum of China’s economy. “3” refers to the real economy, making up for the three major shortcomings of the low efficiency of basic industries in the process of my country’s economic cycle, the small size of the middle-income group, and the weak basic research and development capabilities. “2” refers to the two wings of digital economy and green development. Simply put, the “1+3+2” structural potential is a leader leading, complementing three major shortcomings, and two wings empowering.
At this stage, these potentials are constrained by certain institutional and policy factors to varying degrees. In the near future, it is necessary to launch a series of expansionary policy measures to deepen reform and opening up and promote innovation, so that they can be transformed into real kinetic energy.
For example, the two-way flow of urban and rural land, personnel, capital, technology and other elements will jointly promote the construction of metropolitan areas, urban agglomerations and rural revitalization.Release restrictions on the settlement of migrants outside the metropolitan area, especially the core urban areas of the first-tier city metropolitan area; encourage rural collective construction land within the metropolitan area to enter the market, explore the transfer of homesteads to the outside of collective organizations, and give priority to improving related transfers. of thesocial securitysystem and establish a highly transparent transfer process; explore the establishment of elderly care communities on the land traded and circulated in the market, open to urban residents; implement the housing project for migrant workers entering the city, and provide supporting facilitieseducatemedical care, social security and other basic public services; accelerate the construction of major infrastructure such as rail transit in urban agglomerations in metropolitan areas.
Securities Times reporter: You once proposed the goal of doubling the middle-income group. What do you think should be the focus of increasing residents’ income?
Liu Shijin: Improving residents’ income involves all aspects. The most important thing is to maintain stable and rapid economic growth; the second is to implement employment priority policies to create more employment opportunities; the third is to focus on improving the income of low- and middle-income groups. How to improve human capital It is very important to improve their ability to find jobs and start businesses to increase their income; fourth, to strengthen basic public services, especially for low-income groups, to make up for shortcomings; fifth, to provide more financial, monetary and employment policies to small and medium-sized enterprises. Micro-enterprises are inclined, and it will take 10 to 15 years to increase the middle-income group by 400 million to 500 million people. These groups are basically distributed in small and medium-sized enterprises and private enterprises. Therefore, more efforts will be made to support the private economy, especially small and medium-sized enterprises in the future. development of.
To achieve the above goals, accordingly, the government should use more indicators such as per capita GDP and per capita disposable income in economic work in the future, including the assessment of economic indicators.At the same time, consumption and investment were often viewed in opposition in the past, but consumption is sometimes also an investment, such aseducateThe increase in basic public services such as health care and social security is actually cultivating human capital. Therefore, in the next step, the government should gradually shift from physical capital investment to human capital investment; specific assessment indicators should shift from quantitative indicators to structural quality indicators, such as technology content added value, labor productivity, carbon emissions , basic public services, etc.
(Article source: Securities Times Network)