Pain for gains that'll make growth more sustainable

The Chinese economy faces more challenges and uncertainties in 2022.

For instance, the US Federal Reserve has announced that it will raise interest rates in 2022 to fight inflation. As the inflation in the United States will not recede in the short term, China should prepare for not only direct financial impacts but also a drop in exports.

Despite this, the growth of investment in emerging industries and new and high-tech industries has remained robust, and new drivers of growth, represented by new industries, new forms of business and new models, are also growing.

Fiscal expansion, accompanied by matching monetary policies, will act as a major economic stabilizer, as China will increase the intensity of government spending, speed up the pace of spending, and moderately advance infrastructure investment this year.

The biggest challenge facing the country is demand contraction. There are many reasons for the contraction of demand. Among them, the shift in China's economic growth model and the structural adjustment of the Chinese economy combine to form a major source of downward pressure, which is the cost that must be paid for high-quality development.

In the short term, the slowdown in growth and structural adjustment, combined with other uncertainties at home and abroad, are likely to affect expectations, such as companies preparing for layoffs and consumers cutting back on spending. Both the long-term trend of contraction and the weakening of current expectations are likely to affect employment, thus constraining consumption growth and hindering the forming of a new development pattern.

But China should not give up eating for fear of choking, and it needs to continue to push forward structural adjustment, avoiding attributing the slowdown of growth to the pursuit of high-quality development.

China should unswervingly support the development of advanced manufacturing, modern agriculture, new energy and industries related to carbon emissions reduction, and promote the development of new technologies, new business forms and new growth models.

The government must continue to strengthen its support and assistance to micro, small and medium-sized businesses, prioritize job creation, and maintain the normal functioning of the social security network.

Any gain on the quality front in development is making the growth more sustainable in the long run.

21ST CENTURY BUSINESS HERALD