The content of the report is divided into four parts. The first part: The stage characteristics of China's economic development and the current economic difficulties. The second part: the conflict and choice of multiple economic goals. The third part: the repositioning of macroeconomic policy under multiple objectives. Part IV: Conclusion and policy recommendations.
This report has always focused on government guidance, market dominance, structural adjustment and stable economic growth, emphasizing the important role of the government. The central position of the market and the core goal of adjusting the structure to ensure sustainable economic growth show how to reposition and choose macroeconomic policies under multiple objectives.
The second part, the stage characteristics of China's economic development and the current economic difficulties. The main characteristics of China's economic development stage, so we look at this problem from four aspects.
First, the potential growth rate of the economy has declined. Since the reform and opening up, China's rapid economic growth has not only come from technological progress, accumulation of production factors and human capital, but also benefited from a series of institutional reforms such as opening up and market-oriented reform.
In recent years, with the change of population structure, the demographic dividend is facing a situation of exhaustion. China's economy is facing the pressure of lewis turning point's arrival. In addition, due to the exhaustion of institutional dividends and globalization dividends, the total factor productivity has declined, which has led to downward pressure on the potential economic growth rate of China.
We look at it from the following aspects: first, after growth, we are increasingly dependent on capital investment, and the contribution of total factor productivity is declining. After 2006, the contribution of total factor productivity showed a continuous downward trend, which made China's economic growth have to rely more on capital investment.
Second, the aging of China society is accelerating, and the demographic dividend is gradually disappearing. According to the calculation of the United Nations (Weibo), the total dependency ratio in China will decrease from 38.2% in 20 10 to 37.4% in 20 14, and then it will continue to increase from the past to 40.3% in 2020. The aging of our population is a serious problem, as can be seen from this picture.
Third, the system dividend is about to be exhausted, and the market-oriented reform needs to be deepened. Since the reform and opening-up, some institutional innovations provided by China's market-oriented reform are important reasons for promoting China's economic growth. However, in recent years, the institutional dividend of reform has dropped significantly. According to the calculation, the average growth rate of China's marketization index from 198 1 to 1999 is 13.7%. After entering 2 1 century, the growth rate generally fell below 5%, which basically remained low, and it is difficult to change in the future. The global dividend is almost used up, and the old global division of labor model is unsustainable. Since we joined the WTO, it has been the biggest inflow place for a new round of international industrial transfer.
The second feature is that the distribution of input has further deteriorated, which is difficult to reverse in the short term. The distribution pattern of domestic factor income has obviously deteriorated in recent years, and the proportion of per capita disposable income in gross national income has dropped from 1992 to 12 percentage points in 2008. The per capita disposable income of urban and rural residents and the proportion of consumption in GDP are declining.
Feature 3: the statistics of urbanization are falsely high, and the degree of urbanization of migrant workers is insufficient. From 2020 to 20 1 1 year, China's urbanization rate will increase by 1.35 percentage points every year, and the urban population will increase by 20.96 million people every year. 20 1 1, the urban population accounts for 5 1.27%, but the above results are based on the statistical analysis of the resident population of migrant workers who live in cities over 63%. These resident migrant workers with the counted urban population have not obtained urban household registration and citizenship.
Feature 4: the industrial structure is unreasonable, the speed and quality of industrialization process do not match, the industrial structure is unreasonable, and the supply and demand structure within the industry does not match. On the surface, the phenomenon of weak economic growth in China is insufficient total demand. The fundamental reason is that the government-led investment model has aggravated the structural mismatch between total supply and total demand, resulting in a serious structural imbalance. Due to China's special economic development track, China's industry accounts for a high proportion and is often in a state of overcapacity. Stimulating the secondary industry to stimulate the whole economic growth, although the structural demand shortage solved in the short term stimulated the economy, it expanded the production capacity of the secondary industry again in the long term, leaving a greater hidden danger for the structural demand shortage in the subsequent economic growth.
As can be seen from the following figure, before 2008, the proportion of the tertiary industry in GDP in China gradually exceeded that of the secondary industry. However, with the gradual implementation of the stimulus plan in 2008, the proportional relationship between the secondary industry and the tertiary industry has seriously deteriorated.
The second aspect is the mismatch between the speed and quality of industrialization, and the integration of the structure in the late stage of industrialization and the technical characteristics in the middle stage. Since 1978, the industrialization process in China has gone through 30 years. We have gone through 20 years from heavy industrialization, from 199 1. Therefore, the extensive industrialization process in China is likely to have reached the later stage, and the potential for further promotion is limited. However, in the process of transition to a highly industrialized stage, China's equipment industry and high-tech industry have not been strengthened and developed as they should. The proportion of general processing industry is high, while the proportion of technology-intensive processing industry is low. This industrial structure reflects that industrialization is only in the middle stage.
The second big problem is the main manifestation of the current macroeconomic dilemma and its addiction. At present, the main performance of macro-economy is the deterioration of domestic short-term growth situation, but inflationary pressure still exists. It can be seen from the following aspects. First, the growth rate of total output continues to decline, and the leading indicators are not optimistic. In the first and second quarters of this year, the decline in GDP accelerated. In August, the added value above designated size increased by 8.9% year-on-year, 0.3 percentage points lower than that in July. According to the macroeconomic indicators of the National Bureau of Statistics, there is a possibility of further decline. Second, the growth rate of fixed investment declined, with real estate bearing the brunt, and the nominal growth rate and real growth rate of fixed investment continued to decline. From 20 12 to 1 August, the nominal growth rate of fixed assets investment in China decreased by 4.8 percentage points compared with the same period of last year. The reason for the decline in investment growth rate is that the government-led investment has withdrawn quickly and the market-led investment momentum is insufficient. Especially under the effect of the most severe real estate control policy in history, the growth of real estate investment is sluggish, which greatly restricts the recovery and recovery of China's economy. 1 to August, the newly started area of commercial housing in China decreased 1 1. 1%. Third, consumer confidence is declining, and consumption growth is difficult to have a hot spot. 20 12 1 to August, the total retail sales of social consumer goods increased 14. 1% year-on-year, down 2.8 percentage points from the same period last year. In 20 12, the per capita income of rural and urban areas in China was rising, but the consumption was declining. In July of 20 12, the consumer confidence index was only 98.2%, which was much lower than this and was in a downward trend. Fourth, the long-term pressure on imports and exports is still significant. China's exports and imports have declined in the face of the global economic downturn. From June 2065438 to October 2002 10, China's exports and imports showed negative growth of -0.5% and-15.3% respectively, and the situation of the whole industry was not very optimistic. In August, China's imports increased by only 0.2% year on year. Other customs data also show this situation. Fifth, the price growth rate continues to fall, but inflation still exists. Although we all know that our CPI has been in a downward trend this year, PPI is also declining, and it has recently hit a new low in 34 months. However, under the influence of the price instability of crude oil (85.95, -0. 12, -0. 14%) and the global extreme weather, the price level is still uncertain in the short term, and inflationary pressure still exists. In the future, if the government introduces a steady growth policy to stimulate investment, it may stimulate the rebound of inflation to some extent.
These short-term problems are one of the reasons for the economic downturn. From two aspects, the first reason is that the potential growth decline coincides with the short-term economic correction, and the economic growth decline is long-term. First, the superposition of multiple factors leads to the potential slowdown of China's economy. As can be seen from this table, the potential growth rate of China has entered a period of slowdown. Second, the potential growth of developed countries is slowing down, and the lack of external demand will show a long-term trend. In fact, this crisis is the slow progress of innovation after the IT revolution. As a result, the profit rate will drop. Western countries need a new round of technological changes to get out of this crisis completely, which will promote labor productivity, improve corporate profit margins and promote long-term growth, which means that the recovery after this crisis will be a slow process. For China, on the one hand, the deterioration of the European debt crisis has dragged down the economic recovery of European and American countries, leading to the contraction of China's export market. Third, western austerity measures and trade protection have brought further downward pressure on the global economy. Overall, the year-on-year growth rate of Asia's imports and exports continued to decline, especially in terms of exports. Due to the weak markets in Europe, America and Europe, the growth rate of import and export in Asia has further declined. For China, the United States, the European Union and other countries are constantly waving "trade sticks" and regard China as an imaginary enemy in the trade war.
The second reason is that the effect of using traditional macro-control ideas to regulate economic growth is weakening. On the one hand, the pulling effect of traditional stimulus policies on economic growth is gradually weakening. Whether the aggregate demand policy is effective depends on whether the short-term aggregate supply curve is inclined upward. As far as the policy effect is concerned, the greater the elasticity of output to price, the more obvious the effect of expanding demand policy is. The figure below calculates the self-price elasticity of domestic absorption products and export products. On the export side, the price elasticity of export products changed from positive to negative at 1990, and the absolute value remained at around 0.3 after 2003. Although it shows that lowering the price can increase the export volume to a certain extent, it will not help the export income much, and further lowering the export price will lead to an absolute decline.
Second, the employment elasticity of economic growth began to show a downward trend, and the original employment protection policy may be difficult to play the ideal effect. The elasticity of labor demand to domestic demand output and the elasticity of labor demand to export respectively reflect the absorptive capacity of domestic demand and export sector growth to employment. Since the mid-1980s, the absorption capacity of the domestic demand sector for employment has been continuously enhanced, and the absorption capacity of the domestic demand sector for employment has surpassed that of the export sector. It is particularly noteworthy that since 2008, the employment elasticity of both the domestic demand sector and the export sector has shown a downward trend. This shows that the absorption capacity of these two departments is declining, and the previous policy of ensuring employment through economic growth can only solve the current employment problem to a certain extent.
The investment-oriented stimulus policy will further worsen the distribution pattern of factor income, which is not conducive to the long-term stable growth of consumption and economy. In recent years, China's expansionary macro-policy is mainly to stimulate investment. Investment growth has an immediate effect on stimulating domestic demand, but in Zengcheng, it is easy to increase the relative price of investment products and inflation. Compared with consumer goods, investment goods are capital intensive.
We can see that from 198 1 to 20 10, we find that the average price elasticity of funds for internal employment is 1.05, while the elasticity of labor price to domestic demand is only 0.88. When the price of domestic demand rises or inflation kills, the price of capital goods rises faster than that of labor, and the income distribution is more and more inclined to capital.
The second part, the conflict and choice between multiple economic goals. At present and for a long time to come, the economic goal of China government will mainly focus on the game and balance between steady growth, structural adjustment and inflation control. The first is the contradiction between steady growth, structural adjustment and inflation control. First, the urgent task of the current economy is to stabilize growth through stable investment. As far as the current macro economy is concerned, among the three major goals, steady growth seems to be the most urgent task in current economic work, which is inseparable from the important role of "steady growth" in creating reasonable employment, increasing residents' income and financial security of local governments. However, under the current situation, consumer demand is affected by many slow variables such as residents' income level and imperfect social security system, and it is difficult to improve significantly in the short term. Exports are restricted by the external environment, while the international economic situation is still recovering seriously, and the prospects are not clear. Steady growth has become a top priority at present, mainly from these three aspects. The first is to solve the employment problem. As can be seen from the employment index in the official PMI, it has been declining since 2004. So our employment problem is not very bad, but it is already very serious. Second, the rapid decline in economic growth has led to a decline in fiscal revenue, which in turn has caused financial difficulties for the government. The reason for this situation is determined by the composition of tax revenue in China. At present, turnover tax accounts for about 60% of China's total tax revenue, which is obviously affected by macroeconomics. As you can see from this chart.
Therefore, there is a certain rigidity in the current fiscal expenditure, especially the severe pressure on people's livelihood and unsatisfactory social stability in the process of social and economic transformation, which determines that it is difficult for our government's fiscal expenditure to reduce people's livelihood expenditure and maintain stability.
Third, because we need a higher growth rate to maintain the income growth rate of Laihe residents. At present, the weak position of the residential sector in the income distribution pattern and the serious income gap between residents are difficult to be significantly improved in the short term. Therefore, only through economic growth can we ensure the reasonable income growth rate of the residential sector, especially the low-and middle-income groups, and maintain the basic stability of society.
By what means? At present, only steady investment can stabilize the current growth, that is to say, steady investment is a necessary means of steady growth, and the first is the export problem. Exports can be seen that exports have been declining. According to the report released by the WTO, the growth rate of global trade last year was only 5%, which was significantly lower than the growth rate of 65,438+03.8% in 2065,438+00. 20 12 is even worse. According to the forecast of WTO, the growth rate of global trade will drop to 3.7%, which is lower than the average of 5.5% in the past 20 years. For China, the upgrading of our export-oriented manufacturing industry is facing the double attack of developed countries and underdeveloped countries. In the reality of excessive income distribution gap, insufficient social security and high real estate prices, it is necessary to implement the national income multiplication plan, improve the income distribution pattern and promote the reasonable return of housing prices, but these results are difficult to see in the short term. Therefore, with the exhaustion of exports and consumption, stable investment has become the only means of stable growth. Investment is a fast variable, which can produce immediate results. Recently, local governments have successively issued local versions of 4 trillion investment plans, which is based on such a logic.
The contradiction between steady growth, structural adjustment and inflation control. Conflict 1: There are fundamental contradictions and conflicts between short-term steady growth stimulated by government investment and structural adjustment. The current short-term steady growth may have a negative impact on structural adjustment and may have a certain impact on the economic structure, mainly in these aspects. First of all, measures to stabilize growth may worsen the demand structure and continue to increase the already high proportion of investment demand. Investment can be greatly increased under the government's stimulus policy, but household consumption is difficult to get a strong boost in this process. This is because the deep-seated factors that determine the consumption and income of residents determine the consumption of residents. In fact, the 4 trillion investment plan implemented by the government in 2008 and 2009 obviously worsened the demand structure and greatly enhanced the economy's dependence on investment demand. Since 2008, the actual growth rate of China's fixed assets investment has reversed the downward trend of the previous three years. From 16.9% in 2008 to 32.5% in 2009, it nearly doubled, which is the highest point since 1993. 20 10 investment continued to grow rapidly on the basis of the high level in 2009, with a growth rate of 20%, two percentage points higher than that in 2000-2008. As can be seen from this picture. From the contribution rate of investment and consumer demand to GDP growth, it can also be seen that the 4 trillion investment plan has seriously deteriorated the demand structure. Overall, the contribution rate of investment to consumption reached the historical maximum of 1.9 in 2009 and 438+00 in 2065. Although the ratio decreased to 1.47, it was still at a high level.
Second, the policy measures of steady growth may worsen the industrial structure, produce a locking effect, and lead to further distortion of the investment structure. First of all, it intensifies the excess and bubble of investment and production capacity in some industries, which leads to a certain degree of "rigidity" and distortion of investment structure. In fact, the steady growth of government stimulus policy investment may worsen the industrial structure, and another channel is to further strengthen the position of the secondary industry in the total output by investment, and at the same time increase the proportion of the tertiary industry.
In fact, since 2003, the contribution rate of the secondary industry to economic growth in China has basically been declining, while the contribution rate of the tertiary industry has been rising. In 2008, the government's large-scale investment plan obviously reversed this trend, and economic growth began to rely more on the secondary industry.
Third, measures to stabilize growth in the short term may not be conducive to the improvement of productivity in China. Large-scale investment plans led by our government often mainly invest in infrastructure. The improvement of transportation, communication and other infrastructure is conducive to improving the efficiency of economic operation, but its construction period is long and the effect is lagging behind, which will generally worsen the production efficiency in the short term. In addition, if the government's infrastructure projects are inefficient, large-scale government-led infrastructure investment may not be conducive to the improvement of productivity in the short term or long term.
In 2008, the growth rate of total factor productivity in China suddenly dropped sharply, and it was negative in 2009 and 20 10, indicating that under the stimulation of government-led investment, the production efficiency was basically in a state of stagnation or even retrogression. China's incremental capital output rate rose gradually from 2.4 in 1992 to 4 in 2007. After 2008, due to the unusually high investment growth rate, the ratio soared to 7.8 in 2009 and 7.3 in 20 10. In addition, although the government's large-scale investment plan will also emphasize encouraging independent innovation and promoting technological progress, its effect may not be ideal. Because technological progress mainly comes from the long-term market competition behavior of private enterprises, rather than the short-term planning and intervention of the government, it may be a high-cost and inefficient way to promote productivity by relying on government investment projects.
Short-term and short-term steady growth may have a considerable crowding-out effect on the private sector and small and medium-sized enterprises, weakening the foundation of China's future economic development. From 2008 to 2009, state-owned enterprises accounted for more than 90% of the funds, while private enterprises only accounted for 5%. Fifth, the short-term steady growth of the government's stimulus investment plan may lead to the deterioration of the income distribution structure to some extent. On the one hand, the large-scale stimulus investment led by Zheng Guowu's government in China is mainly invested in infrastructure construction, and rarely involves the construction of people's livelihood departments. On the other hand, judging from the after-the-fact results of the 4 trillion investment plan, the large-scale stimulus investment plan led by the Chinese government mainly benefited from central enterprises, especially large central enterprises.
The second conflict, the process of steady growth and structural adjustment may also lead to inflation. This is because the first steady growth may have a negative impact on controlling inflation. Short-term stable growth requires stable investment, and the rapid increase of investment will trigger inflationary pressure. As far as the actual situation in China is concerned, the money supply in China is endogenous. When money supply is determined by economic introspection, that is, credit demand produces money, then inflation is not simply caused by the rapid growth of money supply, but is determined at the same time. From this process, the inflation under the introspective environment of money supply comes from government deficit, trade surplus and investment to a great extent, and investment is the most distinctive factor in China.
Second, structural adjustment may have a negative impact on controlling inflation. Although this means a change in the total economic structure, it also means the adjustment and determination of the relative price system. In fact, the adjustment of relative prices must be achieved through rapid price increases and some slow price increases, so it will also face upward pressure. In this sense, if we judge that the economic structure of China will undergo profound changes in the future, then the price system of China will also undergo profound changes, and the overall price level will inevitably rise.
We talked about multi-objective conflict earlier, so how should the government or society choose under multi-objective conflict? The first role, between the three goals of steady growth, structural adjustment and inflation control, is to take the market as the leading factor and ensure stable and sustainable economic growth through structural adjustment, which should be the primary choice of China's current policy objectives. There are several reasons. Reason 1, this round of economic growth decline is caused by the complex economic environment at home and abroad. Only taking short-term steady growth measures led by the government to stimulate investment may only temporarily alleviate the downward trend of economic growth.
In the medium and long term, in the face of the fact that the potential economic growth rate has shown a downward trend, whether it is the central version of 4 trillion or the local version of 4 trillion, the government-led short-term steady growth measures can not curb the downward trend of economic growth.
Reason 2: Stabilizing or improving the potential growth rate through structural adjustment is the only way to maintain the sustainable economic growth of China. This urgently requires us to make major changes to the short-term steady growth measures based on the government investment plan. Because the contribution of short-term steady growth measures, mainly the government's stimulus investment plan, to the potential growth rate has been in a declining stage. More importantly, China's economic fundamentals are undergoing profound changes at this stage, which will inevitably lead to an important turning point in China's potential growth rate. Therefore, from the perspective of steady growth, the key lies in the innovation and reform of ideas and means of steady investment.
Reason 3: structural adjustment must be guided by the principle of marketization, and further market-oriented reforms should be comprehensively promoted in order to fully release the introspection power of sustainable economic development. Because the market is dominant, it is the fundamental purpose of structural adjustment to adapt social production to the changes of domestic and foreign market demand, and it is also the core standard to judge whether the economic structure is reasonably optimized. Market demand is constantly changing, and structural adjustment should be carried out frequently, which cannot be done once and for all. It should change with the change of the market, and the government plays a leading role mainly through policy means in the process of structural adjustment.
Scheme 2: In the process of steady growth and structural adjustment, we need to pay attention to managing inflation and its relationship. Reason 1: Measures and means to stabilize growth and adjust the structure will change the public's attitude towards the future price level. Structural adjustment inevitably involves the adjustment and repositioning of product prices and factor prices, as well as the adjustment and transformation of social income pattern and industrial pattern, which will inevitably lead to the rise of some product prices and factors and the decline of some product prices and factors. Steady growth measures may also lead to a rapid increase in the prices of some products by promoting investment, changing the public's expectations of future price levels.
Reason 2: At present, inflation in China is irrational, which is fundamental, and the influence of inflation expectation on inflation Yao Ying is amplified. During the period of inflation in Qualcomm (Weibo), the public's inflation expectations were generally lower than the actual inflation level, and the public often underestimated the inflation level. In the period of low inflation, the public's inflation expectation is generally higher than the actual inflation level, and the public often overestimates the inflation level. Therefore, under the circumstance that the current inflation level is not too high, never underestimate the public's influence on inflation expectations and future inflation.
Second, before 2006, the inflation expectations of the public in China fluctuated relatively gently, and then the fluctuation range gradually increased. Up to now, the fluctuation is relatively large and the sensitivity is relatively strong.
Thirdly, China's inflation expectations show certain characteristics of adaptive expectations and sticky expectations, and the fluctuation range is more stable than the actual inflation level, so the public's inflation expectations are not completely rational.
Option 3: further promote industrialization and urbanization as the entry point and important way to realize economic restructuring. From the macro perspective and the core content of economic restructuring, structural adjustment mainly includes the adjustment of demand structure and supply structure. Further industrialization and urbanization will bring about changes in social demand structure and industrial structure.
Reason 1: The direction and motivation of China's current supply structure adjustment must rely on further promoting new industrialization. Let's make it clear that the so-called new industrialization, further industrialization and deep industrialization in our report all mean the same thing.
On the one hand, our industrialization process is generally in the middle stage of industrialization, and there is still considerable room for development from the complete completion of modern industrialization. On the other hand, promoting industrial enterprises by informationization is the main way to promote the optimization and upgrading of China's industrial structure.
Reason 2: The direction and motivation of China's current demand structure adjustment must rely on further comprehensive promotion of industrialization with reasonable structure. On the one hand, the income inequality between urban and rural residents is the main reason for the unreasonable income and demand structure in China. Therefore, actively promoting industrialization with reasonable structure can improve the income growth of farmers in China, improve the income gap between urban and rural areas, and then have a far-reaching impact on China's demand structure. On the other hand, in the process of industrialization, the general trend of national income changes is that national income tilts towards workers, the proportion of enterprise income declines overall, and the proportion of government income remains stable and relatively low.
Reason 3: Judging from the motive force of China's current supply structure adjustment, we must rely on further comprehensive promotion of connotative developmental urbanization. On the one hand, the agglomeration of population, resources and technology brought by urbanization can affect and promote the upgrading of industrial structure from both demand and supply. On the other hand, the development of the city has promoted the accumulation of a large number of essential resources and the emergence of diversified needs, promoted the western painting of industrial division of labor, and promoted the rapid development of the tertiary industry.
Reason 4: The direction and motivation of China's current demand structure adjustment must rely on the upgrading of connotation and the further comprehensive promotion of developmental urbanization. Urbanization is not only manifested in the expansion of urban space, but also in the concentration of population and the expansion of urban population. Large-scale population urbanization will produce huge income growth and consumption conversion effect. Therefore, after a large number of people turn into urban residents, the consumption behavior from buying a house and household appliances to food, clothing, housing and transportation will directly or indirectly bring huge investment and consumption demand.
We believe that among the three goals of steady growth, structural adjustment and inflation control, marketization and structural adjustment are the first choice. Further industrialization and urbanization are not only effective means to release huge demand and stabilize short-term growth, but also an entry point and an important way to realize structural adjustment. Therefore, the government needs to further promote industrialization and urbanization, put the goal of structural adjustment in the first place, handle the relationship between structural adjustment and short-term stable growth through appropriate policy means, so as to solve the dilemma of growth and structural adjustment, and at the same time pay attention to managing inflation expectations and promoting stable and sustainable economic growth.
The third part, the repositioning of macro-policy under multiple objectives.
In the past, the economic goals that macro-control needed to face were often relatively simple, so the government mainly used the stage.
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