By Li Wei, DRC

2017-08-17

Since the turn of the new century, China’s economy has witnessed profound changes in terms of growth rate, structure transformation and the upgrading of driving forces. Since the launching of the 12th Five-Year Plan, the contradiction between supply and demand has changed significantly. Industrial structure has gone through constant adjustment, the transformation from old to new growth drivers has become accelerated, and economic growth has shifted from quality expansion to quality and efficiency improvement. After economic growth slowed down to some extent in the stage of the new normal, the difficulties for economic development have increased and macro-economic regulation is facing some new challenges.

The macro-economic policy with a new framework bear the following four major features. 1. The significant judgment on the new normal of economic development is made. In light of growth rate, economic growth has transformed from a high-speed mode to a mid-to-high-speed one and the quality and nature of economic growth have undergone substantial changes; in terms of structure, overall and profound changes have taken place in economic structure with optimized upgrading; with regard to growth momentum, economic development has shifted from key factor and investment driven to innovation driven. 2. The guiding principle of new development concept is established. The five major development concepts of innovative, coordinated, green, open and shared development have provided strategic guidance for economic and social growth, which is a profound reform of China’s overall development and is closely related to China’s development mindset, approaches and major issues during the 13th Five-Year Plan period and beyond. 3. The guideline of pushing forward supply-side structure reform is highlighted. The ultimate goal of supply-side structural reform is to meet the demand, its focus is to flesh out supply quality and its fundamental approach is to deepen reform. This is an inevitable choice for China to solve the outstanding problems and address the challenges on the road of development. 4. The general working methodology of seeking progress while maintaining stability is clearly defined. We have firmly adhered to the general guideline of seeking progress while maintaining stability and made it the important principle of governing the country and the methodology of economic work. This is a major adjustment to economic working mindset. We have made efforts to maintain strategic focus and change the mindset of rushing for quick success and acting with undue haste so as to ensure the economic performance to be safe, smooth and sustainable.

As for practice, the macro-economic policy with new framework has gone through the practical tests and played a guiding role in macro-economic control with initial achievements. 1. Economic growth has realized the stable transition from a high-speed mode to a mid-to-high speed one; 2. Economic structure has become gradually optimized; 3. The development quality and efficiency have been constantly promoted; 4. The vitality and motivation of innovation have been strengthened.

The new policy framework has laid more emphasis on six major issues relating to macro-economic control. We need to strive to work in line with the policy framework for macro-economic control set by the Central Government and maintain the stable economic operation to avoid major ups and downs. We need to observe the following issues. 1. More attention should be paid to properly dealing with the relation between macro-economic control and deepening reform; 2. More emphasis should be put on risk prevention; 3. More importance should be attached to market expectations management; 4. More concerns should be given to the cooperation and coordination between different departments in charge of macro-economic control; 5. More efforts should be made to establish and flesh out a sound policy supporting system; 6. More work should be done in terms of international macro-economic policy coordination.

We need to grasp the direction and overall situation. At present, people from various social circles are paying great concern to both international as well as domestic macro-economic performance and they are particularly concerned about whether China’s economy could realize an upturn and whether its economy could improve growth quality and efficiency. It must be admitted that the upward growth momentum and downward pressure of current economic performance is still at a weak balance, and there are still many uncertainties relating to economic development which will lead to short-term fluctuations within a small range. We need to make more efforts to cement the foundation of economic stability. The new economic framework needs to focus on the following changes relating to China’s economic operation. 1. The investment growth might decline slightly; 2. Consumption lacks a strong upward foundation; 3. Stock replenishment forces are phasing out; 4. Price effect will be weakened to some extent. At present, China’s economy is witnessing a shift from a slowdown performance toward the improvement of economic quality and efficiency and the favorable conditions for its economic growth to convert to the track of improving both quality and efficiency are gradually accumulating. We need to adhere to the macro-economic policy with a new framework and maintain strategic resolve, flesh out macro-economic control and prudent management, deepen supply-side structural reform, effectively manage and control risks, further enhance China’s opening-up, cultivate and develop new development engines, promote the continuous enhancement of productivity, maintain a stable and sound economic operation and usher in the opening of the 19th CPC National Congress with new achievements.