Liu Shijin: The focus of the rescue should be on low-income people who recommend subsidizing one month ‘s income

LiuShijin:Thefocusoftherescueshouldbeonlow-incomepeoplewhorecommendsubsidizingonemonth’sincome
AccordingtothelateststatisticsreleasedbyJohnsHopkinsUniversityintheUnitedStates,thenumberofnewlydiagnosedcasesofnewcoronarypneumoniaintheworldisapproaching2million,andtheWHOrecentlyfoundthattheepidemichasnotyetreacheditspeak.Theoverseasepidemiccontinuestospread,andtheChineseeconomycontinuestobeunderpressureduetothis.HowtotreattheimpactofthissecondwaveofoverseasepidemiconChina’seconomy?WhatistheexpectedgrowthofChina’seconomyin2020?LiuShijin,formerdeputydirectoroftheDevelopmentResearchCenteroftheStateCouncil,believesthatthesecondwaveofshockswillbemuchlongerthanthefirstwaveofshocks,andtheprobabilityofgrowthimpairmentwillexceedthatoftheformer.China’seconomywillhavetoshiftfromaconventionalgrowthmodelThe”warepidemicgrowthmodel”oftheperiod.”Mostcanachieveagrowthofabout3%,whichisabigvictory.””LiuShijinalsosaidthatinthecaseofchangesinthegrowthbackground,theassessmentofgrowthtargetsshouldalsobeadjustedaccordingly.Itisrecommendedtoadopta”relativelyrelative”assessmentmethod,whichistousetheratioordifferencebetweenChina’sgrowthrateandtheworld’saveragegrowthrate.”Iftheworldgrowthrateis-2in2020.5%,3%inChina,and5inrelativeterms.5%ishigherthanlastyear.”Inthefaceofcomplexdomesticandforeigneconomicindicators,howtopositionthepolicy?LiuShijinsuggestedthatshort-termpoliciesshouldfocuson”recovery”,”rescue”and”risk-avoidance”,andthefocusoftherescueassistanceisonsmallandmedium-sizedenterprisesandlow-incomepeople,thusrelyingonfiscalpolicytoexertforce.Thefocusofhedgingistopreventthefinancialsystemfrombeingshutdownandchaoticduetoliquiditytensions.Chinashouldhavetheabilitytokeepmonetarypolicynormalwithouthavingtofollownegativeinterestrates.LiuShijindidnotexpectthatatthisstagetoachievesteadyeconomicgrowth,firstandforemostissteadyconsumption,especiallyresidents’consumption,whileinfrastructureinvestmentcannotstabilizetheoverallsituationofChina’seconomy.Sohowtopromoteconsumption?Hesuggesteddirectsubsidiesforlow-incomegroups.”(Subsidies)cannottaketheform,drizzle,andhavealargeenoughamounttoreachthemonthlyincomeorconsumptionleveloflow-incomepeople.”Inthemediumandlongterm,howcanreformbeusedtostimulateeconomicgrowthmomentum?LiuShijinbelievesthatsubstantialdeepeningofreformisthebeststimuluspolicy.TheaccelerateddevelopmentofmetropolitanareasandurbanagglomerationsisthelargeststructuralpotentialofChina’seconomicgrowth.Itisnecessarytopromotetheconstructionofmetropolitanareasthroughthereformoffactormarkets.”Theoutstandingproblemofinfrastructureinvestmentisthewrongplaceandmechanismofinvestment.Inthemetropolitanarea,thereislittlechanceoferror.””Transitionfromaconventionalgrowthmodeltoa”warepidemicgrowthmodel”foralongperiodoftime”SaunaNightNet:Theimpactofoverseasepidemics,asoneofChina’seconomictroika’sexportpressure.HowdoyouviewtheimpactofoverseasepidemicsontheChineseeconomy?LiuShijin:First,thesecondwaveofimpactcannotbeunderestimated.Atthebeginningofthisyear,China’seconomywasfirsthitbytheepidemic.Theeconomyalmoststoppedformorethanamonth,anditisnowgraduallyrecovering.However,theoverseasepidemicsituationisinastateofrisinganxiety,andingeneralthereisnoturningpoint.AccordingtothelatestestimatebytheWTO,theimpactofglobaleconomicgrowthonthetiltofthegroundin2020willbereducedby-2.5%to-8.8%,exportgrowthrateis-17.1%to-40.9%,theimportgrowthrateis-14.5%to-33.8%.China’sexportsfell11quartersinthefirstquarter.4%,importsfellby0.7%.Afterthesecondquarter,itisexpectedthattheimpactofoverseasepidemicsonChina’simportsandexportswillintensifyandwillbecomethesecondwaveofimpactontheChineseeconomy.Relevantresearchconclusions,China’simportsandexportsareexpectedtoappear15%-20%substitution,ofwhichthedeclineinservicetrade.ThereisaviewthatbecausenetexportsaccountforarelativelylowshareofGDP,aslongasnetexportsdonotexhibitlargenegativegrowth,theimpactondomesticgrowthislimited.Thisistrueundernormalgrowth,butiftheshort-terminternalreductionofexportsistoolarge,resultinginthesuspensionofalargenumberofexportenterprisesandproduction,itwilldirectlyaffectdomesticconsumption,investmentandemployment.Byexpandingthebudgetanalysiscanbepolished,adeclineinexportsandamergerwillaffect0.2nominalGDP.Accordingtorecentinformation,therehasbeenasteepdeclineinordersfromforeigntradecompanies.Theimpactofthe2008internationalfinancialcrisisontheChineseeconomyalsoconfirmedthis.Atthattime,exportsfellby30digitsfromahighpoint,drivingGDPdownby7subdivisions.Whenthesecondwaveofshocksalleviatesdirectlydeterminesthetrendoftheinternationalepidemic,andtherearethreegreatuncertaintiesintheinternationalepidemic.First,theUnitedStates,Europe,Japanandothercountrieshaveshowninflectionpointsafterthereduction,butunderthecurrentcontrolmode,itmaybedifficulttocleartheminashortperiodoftimelikeChina,andtherewillbeafairlylongtail;Third,whethertheepidemicwillexistacrossyearsorevenforalongtime.Inthiscontext,thesecondwaveofshockswillbemuchlongerthanthefirstwaveofshocks,andthegrowthandimpairmentwillalsoexceedtheformer.Iagreewiththestatementthattheendoftheglobalepidemicdoesnotmeanthecountrywheretheepidemicended,buttheworstcountrybecauseweareonthesameinterconnectedearth.Becauseofthis,wewillhavetofaceandadapttotherealitythatwehaveshiftedfromtheconventionalgrowthmodeltothe”warepidemicgrowthmodel”foralongperiodoftime.Thesalientfeatureofthisgrowthmodelistheneedtopaya”warepidemicdiscountcost”,whichmeansthatsomeresourcesmustalwaysbeallocatedtointernalanti-rebound,externalanti-input,andtheeconomyisdifficulttooperateatfullhorsepowertoachievepotentialadvantages.”China’seconomicstrengthcanachieveagrowthofabout3%isagreatvictory.”SaunaNightNet:Afterswitchingtothewarepidemicgrowthmodel,howisChina’seconomicperformanceexpectedin2020?LiuShijin:Aftershiftingfromtheconventionalgrowthmodeltothe”warepidemicgrowthmodel”foralongperiodoftime,itmeansthatthebackgroundofChina’seconomicgrowthin2020willchangealot.Acontractionof-5%isexpectedinthefirstquarterandreturnstoacertainpositivegrowthrateinthesecondquarter.Withoutconsideringthesecondwaveofshocks,assumingthatthethirdandfourthquartersaresupportedbyreboundsandstimulusfactors,itmaybehigherthantheprevioustwo.Inthisrespect,ithasreachedagrowthofabout8%.However,iftheimpactofthesecondwaveofshockistakenintoaccount,ifthereare2-3exchangeimpairments,thegrowthofabout3%canbeachieved,whichisabigvictory.Inthecontextofadeepglobaleconomicrecession,suchagrowthrateisveryrare.Itcanbesaidthattheexpansionof3%underthe”warepidemicgrowthmodel”willgreatlyexceedthegoldcontentof6%undertheconventionalgrowthmodel.Theassessmentofgrowthtargetsshouldalsobeadjustedaccordingly.Itisrecommendedtoadopta“relativelyrelative”assessmentmethod,whichistousetheratioordifferencebetweenChina’sgrowthrateandtheworld’saveragegrowthratetoassessthegrowthoftheChineseeconomy.ThebasicbackgroundofadoptingthismethodisthattheChineseeconomyhasbeensubdividingandintegratingtheglobaleconomy,andtheimpactoftheepidemicisalsoglobal.Comparedwithpreviousbenchmarks,ifthisratioisstableorrising,itindicatesthatChina’seconomicperformanceisgood,otherwiseitispoor.Takingthedifferenceasanexample,theaveragegrowthrateoftheworldeconomyin20192.9%,Chinais6.1%,therelativeintensityis3.2%;iftheworldgrowthrateis-2in2020.5%,3%inChina,and5inrelativeterms.5%ishigherthanlastyear.Oneadvantageofthisassessmentmethodisthatitdoesnothavetobetooconfinedtopreviousgrowthtargets,especiallytoavoidusingexcessivestimulationmethodstoachievethegoalssetundertheconventionalgrowthmodel.Inthecontextofthewarepidemicgrowthmodel,scientificallyandpracticallyformulateandImplementgrowthgoals.”Chinahastheabilitytokeepitsmonetarypolicynormalwithouthavingtofollowanegativeinterestratepolicy.”SaiYewang:Withchangesinthecontextofeconomicgrowth,howtopositionshort-termmacroeconomicpolicies?LiuShijin:Theshort-termpolicyshouldbeadaptedtothecharacteristicsofthiseconomicshock.Thislarge-scaleeconomicgrowthwasanunexpectedsuperexternalshock,notaproblemwithintheeconomy,suchasseriousshortageofdemandandexcessiveleverage.Thisisdifferentfromthepreviousfinancialoreconomiccrisis.Thereareabsolutelytwofactorsineconomicrecovery,oneisthedurationoftheepidemic,andtheotheristhedegreeofimpairedproductioncapacity.Ifthedurationoftheepidemicisnotlongandtheproductioncapacityislimited,aV-shapedreboundmayoccuraftertheepidemic;ifthedurationoftheepidemicisprolongedortheproductioncapacityisseriouslydamaged,thereboundwillnotbesoeasy.Inadditiontocontrollingtheepidemicsituationasquicklyaspossible,recoveringdamagedproductioncapacityandimprovingprotectionarethefocusofshort-termpolicies.Theshort-termpolicyshouldfocuson“recovery”,“rescue”and“riskavoidance”.Recoveryistoreconnecttheinterruptedsupplyanddemand.Somepeopleexpandthedemand.Infact,thetoppriorityistorestorethedemand.Theassistancehelpscompaniesandindividualswhoareinadifficultsituation,andevencannotsurviveforafewdays.Thefocusisonsmallandmedium-sizedenterprisesandlow-incomepeople.Riskavoidanceistopreventandcontroltherisksthatmaybecausedbyexistingstructuralconflictsintheeconomy,topreventoldconflictsfromcausingnewproblems,andthefocusistopreventthefinancialsystemfrombeingshutdownandchaoticduetoliquiditytensions.Fromthisperspective,thefocusoffiscalpolicyisbailout.Thestatehasdecidedtoissuespecialnationalbonds,andthefundsraisedshouldbemainlyusedforbailouts.Thefocusofmonetarypolicyisriskaversion.ItshouldbesaidthatthistimetheFedrespondedfairlyquickly,byprovidingsufficientliquiditytostabilizeexpectationsandpreventchaosorevencollapseofthefinancialsystem.Ofcourse,thepriceisalsohigh.Chinahasadoptedaproactiveandeffectivepolicy.ThefinancialdataforMarchhascomeout,andwecanseethatthesocialfinanceindexhasrisensignificantly.Whentherealeconomydeceleratessuddenlyandalmostshutsdown,onlyincreasingtheinjectionliquiditycanguaranteethecontinuousoperationoftheeconomy.However,thedifferencebetweentheChineseeconomyanddevelopedeconomiesisthatthetwoareatdifferentstagesofdevelopment.Chinastillhasconsiderablestructuralgrowthpotential.Thestimulustotheeconomymainlydependsonstructuralpotentialratherthanmacro-policy.Therefore,ChinashouldalsobeabletomakeMonetarypolicyremainsnormal,withouthavingtofollowtogetnegativeinterestrates.”InfrastructureinvestmentcannotstabilizetheoverallsituationofChina’seconomy.Thefocusofsteadygrowthissteadyconsumption.”SaunaYewang:Specifically,whatshouldbethefocusanddirectionofshort-termpolicies?LiuShijin:Therearethreeissuesthatneedattentioninshort-termpolicies.First,steadygrowthisthefirstandthefocusistostabilizeconsumption.Theeconomicgrowthrateweencounteredbefore,thefirstthingwethoughtofwastospendmoneyoninvestment,especiallyoninfrastructureinvestment,whichwasrelatedtothegrowthstageandeconomicstructureatthattime.In2008,inresponsetotheimpactoftheinternationalfinancialcrisis,afourtrillionstimulusplanwasimplemented.Investmentaccountedfor62%oftheGDPincreaseintheexpendituremethodthatyear.8%,theproportionofconsumptionis42.5%.By2019,theproportionofinvestmentintheGDPincreaseintheexpendituremethodhasdroppedto17.2%,theproportionofconsumptionroseto66.9%,theproportionofresidents’consumptionis49.5%.Thissetofdatashowsthatatthisstageofsteadygrowth,firstandforemostistostabilizeconsumption,especiallyhouseholdconsumption.Ifthisbigheadisnotstable,thewholeeconomywillnotbestable.Investment,especiallyinfrastructureinvestment,hasturnedintoasmallhead,andthesmallheadcannotholdtheoverallpicture.Second,directlysubsidizelow-incomegroups.Thisisadoubleroomdirectlyderivedfromsteadyconsumption.Whethertodirectlyissuemonetarysubsidiesoraccumulateconsumptioncouponswithouttoomanyrestrictionscanalsobediscussed.Thegeneralpracticeofsummingupisdirectmonetarysubsidies,whicharesentdirectlytotheresidentaccount.Ourweaknessisthattheinfrastructureforidentifyingandsupplementinglow-incomepeoplehasnotbeengenerallyestablished.Withthedevelopmentofdigitaltechnologytothecurrentlevel,itshouldnotbedifficulttoengageinthis”newinfrastructure”.Thecurrentdemandalsoprovidesashortcoming.Intheshortterm,youcanuseexistingchannelinformation,suchaspoorpeopleinpoorareas,low-incomepeopleintheurbansocialsecuritysystem,andindividualtaxdeclarationsystems.Atleastthreepointsshouldbepaidattentiontothissupplement:itreallysupplementsthelow-incomepeople;itshouldbeconsumedmore;itshouldnottaketheform,drizzle,andhaveanappropriatelargeamounttoreachtheincomeorconsumptionlevelofthelow-incomepeopleasmuchaspossible.Arelatedissueofcognitionshouldalsobediscussed.Wecannotsimplythinkthatthedirectsubsidytolow-incomepeopleistogivebenefitsandraiselazypeople.Seendirectly,subsidiescanstabilizeconsumptionandincreasegrowth,andpartofthecompensationwillbeconvertedintocorporateincomeandgovernmentrevenue.Fromtheperspectiveoftheeconomiccycleprocess,thecompensationforthelow-incomegroupisreduced,theincomegapisreduced,protectionisimproved,andhumancapitalisimproved,becausethelow-incomegroupisbothaconsumerandaproducer,andistheproducerwiththelargestroomforhumancapital.Third,itisnecessarytoleaveenoughammunitiontotheforeigntradetrappedenterprisesunderthesecondwaveofimpact.Theresourcesoftherescueenterpriseshouldbeusedinabalancedmanner,andthebulletscannotbefinishedatonce.Thesecondwaveofshockhasjustbegun,anditisunclearwherethefrontandthetailare.ExportenterprisesareoneofthemostdynamicandcompetitivepartsoftheChineseeconomy.Iftheseenterprisesfall,thedamagetotheChineseeconomyisdifficulttoestimate.Itisnecessarytoplacethebulkofaidresourcesinthisarea.Directsubsidiesforlow-incomepeoplecanalsobecombinedwithassistancetoforeigntradecompanies.Foremployeesundercertainincomelevelsinforeigntrade-strickenenterprises,thegovernmentsupplementsacertainamountofsupplementstohelpenterprisesstabilizetheirworkforce,sothattheycansimultaneouslyincreaseconsumption,reducecosts,stabilizeemployment,andmakepoliciesworkbetter.”Substantiallydeepeningreformisthebeststimuluspolicy”SaunaYewang:YouhavebeenworkinghardtotapthepotentialoftheChineseeconomythroughreform.Inthemediumandlongterm,howcanreformbeusedtostimulateeconomicgrowthmomentum?LiuShijin:Eveniftheeconomyrecoversbetter,ahardgrowthgapwillremain.Theaforementioned”warepidemiccostdiscounts”mustalsobecoveredbynewdemand.Howtostimulatenewgrowthmomentumisaproblemtobesolvedbythemedium-andlong-termpoliciesthatcomplementtheshort-termpolicies.Inthenextfivetotenyears,therapiddevelopmentofmetropolitanareasandurbanagglomerationsisChina’slargeststructuralpotentialforeconomicgrowth.Inafashionablesaying,itisa”newoutlet”forChina’seconomicgrowth.Itisnecessarytopromotetheconstructionofthemetropolitanareawiththereformofthefactormarket.Theso-calledmetropolitanarea,intermsofspatialform,isaone-hourcommutercircle,orwithin50-70kilometersaroundtheexistingcorecity(differentgeographicalenvironmentshavetheflexibilitytointerfere),andthedevelopmentofsmalltownsorseveralsmallcitiesisconnectedtoeachother.Afterwards,anewurbannetworksystemwasformed.Ingeneral,thedevelopmentofthemetropolitanareafocusesonthedevelopmentofthe”circle”.Byresolvingthestructuralcontradictionsofcorecities,expandingurbanizationspace,smalldecentralization,andlargeconcentration,thetransformationandupgradingofmegacitiesinlargecitiesarerealized.Specifically,itisconducivetotheadjustmentofindustrialstructure,especiallythemanufacturingindustrytoincreasethelevelofspecializationonthebasisofcostreduction;itisconducivetotheadjustmentofthepopulationstructureandgreatlyimprovesthelivingenvironmentandqualityoflife;itisconducivetothebalanceofworkandresidence,slowingdowncongestion,pollutionandCommutingpressure;conducivetomigrantworkersandotherimmigrantsinthecitytoimprovelivingconditionsandaccesstoduebasicpublicservices;conducivetodrivinginnovationandgreendevelopment,andpromotingthetransformationofproductionandliving,feasibleandnecessarynewdevelopmentmethods.Fromtheperspectiveofgrowthmomentum,smalltownsneedtobuildalargenumberofresidentialbuildings,publicinfrastructure,andsmalltownsneedtobeconnectedbyrailtransportation.Thesmalltownswithindustrialclustersmustalsohavenewindustrialinvestment,whichcanalmostdriveConsumptioncanalsobringalotofinvestment.Accordingtopreliminaryestimates,inthenexttenyears,theconstructionyearofthemetropolitanareawillprovideatleastzeroforthenationaleconomicgrowth.5to1individualgrowthmomentum,inadditiontorespondingtotheimpactoftheepidemic,hasalsoprovidedstrongsupportforthemoderateandgradualdevelopmentofalongperiodbefore.Recently,theconceptof”newinfrastructure”hasbeenhotlyspeculated.Intermsofvolume,themainbodyofinfrastructureinvestmentisstilltheso-calledoldinfrastructure.Infact,regardlessoftheoldinfrastructureorthenewinfrastructure,itisagoodinfrastructuretoinvestintherightplace.Theoutstandingproblemofinfrastructureinvestmentisthewrongplaceandmechanismofinvestment.Inthemetropolitanarea,thereislittlechanceoferror.Returningtoreality,theconstructionofthemetropolitanareafacestoomanyideas,constraintsandconstraintsintermsofsystems,mechanismsandpolicies.Recently,theCentralCommitteeoftheCommunistPartyofChinaandtheStateCouncilissued”OpinionsonFurtherImprovingtheSystemandMechanismofFactor-BasedAllocationofFactors”.Thecoreistopromotethefreeflowandmarket-basedallocationofproductionfactorssuchasland,labor,capital,technology,anddata.Afterthereleaseofthedocument,thesocialresponsewaspositiveandenthusiastic.Itcanbesaidthatitwastherighttimetotacklethevariousinstitutionalmechanismsandpoliciesfacingtheconstructionofthemetropolitanarea.Thisagainshowsthatsubstantivedeepeningofreformsisthebeststimuluspolicy.ItisrecommendedtousetheFederalCentralDocumentasanopportunitytolaunchapackageofreformanddevelopmentplanstopromotetheconstructionofthemetropolitanareawithelementarymarketreforms,includingrelatedcities,focusingoncontinuouspopulationinflows,developinglargecitiesorurbanagglomerationswithhighpotential,andacceleratingthereconstructionorrevisionofthemetropolitanareaConstructionplan,andannounceitassoonaspossible,theconstructionboostsconfidenceandstabilizestheexpectedrole;starttheconstructionofthemetropolitanarearailtransit,communicationengineeringandotherinfrastructureconstructionprojectswithsufficientpreparationsattheearlystageoftheconstructionscale;preparetheplan,andproceedwiththephasedconstructionmainlyforthemigrantpopulation,especiallyHousingprojectsforruralpopulationenteringthecity;promotingagriculturallandtothecity,transferofhomesteads,selectingsomesmalltowns,andcarryingoutpilotprojectsfortheconstructionofelderlycommunitiesinthecorecitiestogotothecountryside;adjustinghouseholdregistrationpoliciesandotherpopulationmobilitymanagementpoliciesformigrantsinurbanareasThesmalltownsintheneighbouringtownsliveandworkinafavorableenvironmentforemploymentandentrepreneurship;theyhavereplacedtheGuangdong-HongKong-MacaoGreaterBayAreaandsomeprovincialcapitalcitieswithgreatdevelopmentpotentialascomprehensiveexperimentalzonesforthereformanddevelopmentofthemetropolitanarea,takingtheleadinmakingbreakthroughsandobtainingreproducibleandscalableexperiences.Sauna,YeWangHouRunfangEditorWangJinyuproofreadLiMing