The Central Economic Work Conference was held in Beijing from December 15th to 16th to determine the direction of China's economic development in 2023. The meeting requested that in 2023, we must focus on stabilizing growth, stabilizing employment, and stabilizing prices, effectively preventing and defusing major risks, and promoting the overall improvement of China's economic performance. When
was deploying work, the meeting twice proposed " stable growth , stable employment, and stable prices." Compared with previous years, stable growth was placed in a more prominent position. Experts believe that "stability" is the core keyword for economic work next year, and macroeconomic policy control will be further intensified.
Source: Xinwen Broadcast
Prioritize “stable growth”
Continuing the formulation of the Political Bureau meeting of the CPC Central Committee, the Central Economic Work Conference further prioritized “steady growth”. It is required to focus on expanding domestic demand, give priority to restoring and expanding consumption, and point out the direction for encouraging the private economy, supporting platform enterprises, and preventing and defusing major economic and financial risks.
It is worth noting that when setting the tone for next year’s economic work, the Political Bureau meeting of the Central Committee also mentioned that we must persist in hard work and stimulate the entrepreneurial vitality of officials in the whole society, so that cadres dare to act, local governments dare to venture, enterprises dare to do things, and the masses dare to pioneer.
The central government has judged that the current foundation for my country's economic recovery is not yet solid. The triple pressures of shrinking demand, supply shocks, and weakening expectations are still great. The external environment is turbulent, and the impact on our country's economy is deepening.
Recently, many policy researchers have stated that the current economy has not yet returned to a reasonable range, and the three-year average growth rate from 2020 to 2022 is lower than the current potential growth level of China's economy. Therefore, the economy should be pushed back to a reasonable range (about 5%) in 2023.
Zhang Junwei, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council, pointed out that the Central Economic Work Conference emphasized that "stability should be given top priority and progress while maintaining stability" and "focusing on the work of stabilizing growth, stabilizing employment, and stabilizing prices", which fully shows that the central government has regarded the issue of restoring economic aggregate balance as the primary contradiction in current economic operations.
"To achieve high-quality development, we must stabilize the economy and put stable growth in a more prominent position." Guo Liyan, director and researcher of the Comprehensive Situation Research Office of the China Institute of Macroeconomics, said that it is particularly important to scientifically coordinate the dialectical relationship between quality and quantity of economic development. "Quality" refers to the structural optimization and efficiency improvement of economic development, and "quantity" refers to the expansion of the scale and speed of economic development. The two are complementary to each other. Optimizing the structure and improving efficiency can provide continuous driving force for the expansion of scale and growth rate. Reasonable growth in quantity is also an important basis for effectively improving quality.
Improving social psychological expectations and boosting development confidence
"Proceeding from the strategic overall situation, starting from improving social psychological expectations and boosting development confidence", the meeting regarded "expectations" and "confidence" as the breakthrough point and direction of work to open up the work situation, and carried out a series of targeted deployments.
- Focus on expanding domestic demand, "prioritize the recovery and expansion of consumption";
- Accelerate the construction of a modern industrial system, proposing that "we must vigorously develop the digital economy , improve the level of normalized supervision, and support platform companies to show their talents in leading development, creating jobs, and international competition." ;
- Effectively implement the " two unwavering ", "must be clear-cut and unambiguous" in response to incorrect discussions in society, "put down the requirement for equal treatment of state-owned and private enterprises from the institutional and legal aspects, and encourage and support the development and growth of the private economy and private enterprises from the perspective of policy and public opinion";
- Make greater efforts to attract and utilize foreign capital , "actively promote the joining of high-standard economic and trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement, actively compare relevant rules, regulations, management, and standards, and deepen reforms in relevant domestic fields";
- Effectively prevent and resolve major economic and financial risks, "adhere to the positioning that houses are for living in, not for speculation, and promote the smooth transition of the real estate industry to a new development model";
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Economic work is complicated, adhering to a problem orientation, grasping the main contradictions and key links, is an important method for the party to lead economic work.
In response to the noise in public opinion, we firmly grasped the key issues that affect our country's current development expectations and market confidence. The meeting showed a clear attitude and released a clear and clear policy signal.
policy adjustment space has increased. How can
maintain steady growth? The Central Economic Work Conference requires that the fiscal policy should be "increased and effective" and the monetary policy should be "precise and effective."
In Zhang Junwei's view, "increased efforts" means that the active fiscal policy in 2023 must have the necessary expansion efforts, through the coordinated use of direct investment, tax subsidies, policy investments, as well as the coordinated use of general debt, special bonds, government investment funds, PPP, etc., to expand the scale of social investment. "Improving efficiency" means paying attention to improving the effectiveness of fiscal expenditures, avoiding the accumulation of short-term debt risks, and achieving a balance between short-term growth and risk prevention.
Fei Zhaoqi, director and researcher of the Monetary Theory and Monetary Policy Research Office of the Institute of Finance, Chinese Academy of Social Sciences, believes that the slowdown in the tightening of monetary policies in major economies such as the United States will help weaken the external constraints faced by China’s monetary policy , and domestic monetary policy space is expected to be further opened.
Deputy Director of the Institute of Finance of the Chinese Academy of Social Sciences and Deputy Director of the National Finance and Development Laboratory Zhang Ming said that currently, the main contradiction of China's economy is still insufficient aggregate demand and the actual economic growth rate is significantly lower than the potential growth rate. Therefore, the most important issue is how to return China's economic growth to its potential growth rate as soon as possible. In his view, my country needs to further relax fiscal and monetary policies next year and strengthen the coordination of fiscal and monetary policies.
Relevant experts said that in addition to further relaxing the overall amount of fiscal policy, it is more important to find ways to improve the efficiency and effectiveness of fiscal policy implementation. On the one hand, it is necessary to further optimize the financing structure of local infrastructure investment projects and grant local governments greater autonomy in terms of special debt funds. Currently, there are strict regulations on the application, approval, review, and use of funds for local special bonds, resulting in local governments being unable to fully utilize special bond funds to finance infrastructure projects.. On the other hand, a countercyclical prudential supervision model should also be implemented for local platform debt. In the context of the macroeconomic downturn, the management of local implicit debts should be appropriately relaxed. After the economy recovers, supervision can be strengthened again. Under the current situation, if you want local governments to increase investment in infrastructure , they need to appropriately relax the management of local implicit debts.
President of Zhixin Investment Research Institute Lian Ping said that the "precision" of monetary policy is mainly reflected in continuing to actively guide financial institutions to increase support for "agriculture, rural areas and farmers", through structural tools such as supporting agriculture supporting small relending , scientific and technological innovation special relending , equipment renewal and transformation special relending, and carbon emission reduction support tools. Small and micro enterprises , technological innovation, advanced manufacturing , green development and other key areas and weak links will be supported; real estate financial policies will also be further relaxed to expand direct and indirect financing channels for real estate companies to ease the operating pressure of real estate companies, meet residents' rigid and improved housing needs, and accelerate the stabilization and recovery of the real estate market.
"'Strong' means that we will continue to increase the intensity of macro policy regulation." Lian Ping believes that domestic prices will generally be relatively flat in 2023, and the space for expansion and adjustment of my country's monetary policy will increase. The central bank may maintain reasonably sufficient market liquidity, moderately lower deposit reserve ratios multiple times, and moderately lower policy interest rates to provide sufficient financial support for the stabilization and recovery of economic operations.
Keep the bottom line of safety
Focusing on effectively preventing and resolving major risks, the Central Economic Work Conference has specifically emphasized and made arrangements in the general requirements and main tasks of economic work next year, which reflects the Party Central Committee’s deep consideration of attaching great importance to overall development and security and strictly observing the bottom line of safety.
Under pressure from economic development, risk pressure will also increase. To firmly adhere to the bottom line of preventing systemic risks, we must not only address the symptoms and root causes, but also take into account both the present and the long term. The meeting made a series of arrangements to ensure the stable development of the real estate market, prevent and resolve financial risks and local government debt risks. This all reflects the use of development methods to solve problems in progress and gradually resolve risks while promoting the overall improvement of economic operations; by promoting high-quality development, we can fundamentally prevent and resolve risks and form a virtuous circle of finance and economy.
Next year will be the first year to fully implement the spirit of the 20th National Congress of the Communist Party of China. my country's economic development will face both opportunities and challenges, and the opportunities will outweigh the challenges. By adhering to the principle of stability, striving for progress while maintaining stability, strengthening confidence, working hard, and showing new atmosphere and new achievements, we will surely be able to make a good start in building a modern socialist country in an all-round way with high-quality development and new results.
The core is to stabilize confidence
It is worth noting that vigorously boosting market confidence and focusing on expanding domestic demand have become the top priorities for stable growth in 2023.
Fei Zhaoqi pointed out that currently, affected by the weakening demand in overseas markets, the domestic economic growth point in 2023 will shift from export support to domestic demand-driven, and the restoration of consumption and investment will become the key to China's economic recovery growth.
Zhang Junwei predicts that policies to expand domestic demand in 2023 will at least include policies to encourage industries that have been hit hard by the epidemic to speed up recovery, such as tourism, catering, accommodation, exhibitions, performing arts, etc.; policies to encourage residents’ consumption upgrades and large-ticket consumption, such as policies to encourage the consumption of new energy vehicles, rigid-need and improved housing consumption, holiday consumption, and green consumption; policies to expand government investment and improve the stimulating effect of fiscal expenditure; policies to improve the investment environment and encourage private investment.
To promote consumption, we must do everything possible to boost the confidence of market entities , because only by allowing market entities to be dynamic can we provide solid support for expanding domestic market consumption and promoting investment growth. In the final analysis, the core of stabilizing growth is stabilizing confidence.
In the past three years, the epidemic has repeatedly disrupted the rhythm of production and life, and all walks of life have encountered varying degrees of difficulties. In particular, the tertiary industry , which is mainly wholesale and retail, manufacturing, accommodation and catering, residential services and other service industries, is facing development difficulties, and the foundation for the recovery of small and medium-sized enterprises needs to be solidified.
“Due to the repeated impacts of the epidemic and the continued tightening of the external environment, small and medium-sized enterprises are facing sluggish demand, shrinking orders, insufficient production, sluggish sales, defaulted accounts, etc., resulting in more difficulties and greater pressure. Ma Bin, executive vice president of the China Small and Medium Enterprises Association , told a China Economic Times reporter that effective measures need to be taken to help companies resume production, especially in optimizing the business environment, deepening the " delegating power, delegating regulation and servicing " reform, optimizing the business environment, and greater Stimulate market vitality and social creativity. Take multiple measures to effectively reduce the burden on small and micro enterprises, promote financial innovation to alleviate the financing difficulties of small and micro enterprises, and increase efforts to clean up arrears.
"Multiple measures are urgently needed to stabilize confidence in 2023. Wang Zhigang, a researcher at the Chinese Academy of Fiscal Sciences said. Focus on expanding domestic demand, especially maintaining household consumption and a reasonable and effective scale of investment. Promote the development of emerging industries represented by the digital economy. Promote the integration of technology, finance and the real economy, and guide the investment of high-quality talents, funds, and technology into the system. The manufacturing industry is undergoing high-quality development. We will improve the modern industrial system, promote deepening reform and opening up, enhance the resilience and international competitiveness of China's industrial chain and supply chain system, accelerate the construction of a unified national market, promote high-level opening up to the outside world, and enhance trade and investment cooperation. quality and level, and enhance the attractiveness to foreign investment with more international and legal public services.
Source: WeChat public account "Caizhi Toutiao" Integrated from: China Development Network, China Economic Times, China Economic Network, China Government Network, etc.
Editor: Yuan Kai
Proofreading: Fenghua
Review: Gong Zimo
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