Zhang Bin: The economy will continue to recover in the second quarter but the economy is still difficult to return to normal within the year

ZhangBin:Theeconomywillcontinuetorecoverinthesecondquarterbuttheeconomyisstilldifficulttoreturntonormalwithintheyear
Thismorning(April17),thefirstquartereconomicdatareleasedbytheNationalBureauofStatisticsshowedthatGDPfellby6inthefirstquarter.8%.HowtoviewtheperformanceofChina’seconomyinthefirstquarter?WilltheChineseeconomyrecoverinthesecondquarter?SaunaNightNetworkinterviewedZhangBin,directoroftheGlobalMacroeconomicResearchOfficeoftheWorldEconomicsInstituteoftheChineseAcademyofSocialSciencesandseniorCF40official.InZhangBin’sview,theGDPgrowthratedidnotdeclinemoreinthefirstquarter,becausethemainsupportfromtheincomemethodisthattheresidents’nominaldisposableincomehasnotyetgrownnegatively,andthisportionaccountsfor60%ofGDP.”Inthesecondquarter,theeconomywillcontinuetorecoverfromtheepidemicdisaster,buttheeconomicdamagecausedbytheepidemicisnotremedyablewithintheyear.Itisverydifficulttoreturntheeconomytoanormalstatethisyear.Itisverygoodiftheeconomicgrowthrateof2%-3%canbeachievedinitially.SaidZhangBin.Judgingfromtheperformanceofthe”troika”drivingtheChineseeconomy,inthefirstquarter,thenationalfixedassetinvestment(excludingfarmers)was841.4billionUSdollars,adecreaseof16.1%.Amongthem,infrastructureinvestmentfellby19.7%.”Maintainingthenexteconomicgrowthandmaintainingreasonableinvestmentgrowthisamust.Suchlargenegativegrowthininfrastructureinvestmentisfarbeyondnormal,anditisnecessarytoincreaseinvestment.”ZhangBinsuggested.Judgingfromtheperformanceofconsumption,inthefirstquarter,thetotalretailsalesofconsumergoodsreached785.8billionUSdollars,withadeclineof19.0%.Inthecaseofweakconsumption,shouldtheconsumercouponsbereleasedordirectlypaid?ZhangBinsaidthathecansendmoneydirectlyorsendcoupons.”Butwithoutinvestmentandincomegrowth,stablegrowthinconsumptionisdifficulttoguarantee.”Investmentorexportsareoftenlocomotives,andconsumptioniscars.Nowlet’slookatwhetherexportsareunreliable,andinvestmentremainsthefocusof(stabilizingeconomicgrowth).”ThespreadofoverseasepidemicshasputpressureonChineseexport-orientedenterprises.AccordingtodatafromtheNationalBureauofStatisticstoday,inthefirstquarter,exportsamountedto3.3363trillion,adecreaseof11.4%.However,inZhangBin’sview,thehighincidenceofforeignepidemicsandtheeconomicshutdownwillbegininMarch,andtheimpactonexportswillbecomemoreandmoreapparent,andthentheexportsituationisnotoptimistic.”Forexport-orientedenterprises,weneedsometemporarypolicysupport,includingsupportforcorporatecredit,taxreductions,andgraduallyreducetheoperatingcostsofenterprisestohelpthemsurvive.””ZhangBinsuggested.Thedoubleimpactoftheepidemicsituationathomeandabroad,economicpressure,andunemploymenthavecausedconcern.InMarch,thenationwideurbansurveyoftheunemployedpopulation5.9%,downby0fromFebruary.3averages.InZhangBin’sview,someunemploymentmaynotbefullyreflectedinthesurveyunemploymentratedata.”Currently,thepressureonthelabormarketismainlyfortheemploymentofmigrantworkers.Thesetwogroupsofnewlygraduatedcollegestudentsneedtoworkhardtosolvetheemploymentpressure.Amongthem,governmentconstructionprojectsstartedassoonaspossiblecandirectlyleadtoemployment,whilegovernmentprojectscanpromotetheresumptionofworkinmanydownstreamindustries.SaidZhangBin.Focus1:TheoverallperformanceoftheChineseeconomy”Theeconomywillcontinuetorecoverinthesecondquartertoachieve2-3%economicgrowthrateisverygood”SaunaYeWang:HowdoyouviewtheperformanceoftheChineseeconomyinthefirstquarter?ZhangBin:Thenewcrownepidemicisnotadisasterforhumanhealth,butalsoaneconomicdisaster.Theeconomywasforcedtoshutdownsubstantiallyandtheeconomyexperiencednegativegrowth.TheeconomicindicatorsinMarchweresignificantlybetterthanFebruary,indicatingthattheeconomyisemergingfromtheepidemic.China’sgrowthrateinthefirstquarterwas-6.8%,slightlybetterthanmypersonalexpectations.TheGDPhasnotdecreasedmore.Themainsupportfromtheincomemethodisthattheresidents’nominaldisposableincomehasnotyetgrownnegatively.Thispartaccountsfor60%ofGDP.Therelativelossesarecorporateprofitsandgovernmentperformance.Behindthenegativeeconomicgrowth,thepressuresofdifferentgroupsofpeopleareverydifferent.Thejoblossesaremainlyconcentratedinthemigrantworkersgroup,andthedifficultiesincontinuingtooperatearemainlyconcentratedinsmallandmicroenterprises.Theyneedtofocusonit.Theeconomywillcontinuetorecoverfromtheepidemicdisasterinthesecondquarter.Butthepressureisstillverybig,mainlyforthreereasons.First,thedownstreamdemandforglobaldemandcausedbytheglobalspreadofthenewcrownepidemicwillhaveanunprecedenteddistortionintheexportsector.Thesecondisthatthepreviouseconomicshutdownbroughttensoftrillionsofcashflowlossestoenterprises,residentsandlocalgovernments,whichwillaffectthesubsequentdemandandresumptionofwork.Thethirdisthatthenewcrownepidemicstillhaswidespreadpsychologyandpreventstheepidemicfromresurgence.Thevariouspreventionandcontrolmeasureswillaffectnormaleconomicactivitiestovaryingdegrees.Ifthebudgethasthenecessarypolicysupport,theweakeningofbothdomesticandexternaldemandwillpreventthesystemfromtakingover,andreplenishmentwillfurtherreduceincomeandpreventsystemicdemand.Theendofthedestructionofthemarketisfarfromthenormallevelofeconomicactivity.Thisyearisaveryspecialyear.ThenewcrownepidemichasbroughtgreatdisastertoChinaandtheglobaleconomy.Theseriousimpactofthenewcrownepidemicisnotonlyinthefirstquarterandthesecondquarter,norisitabletocompensatefortheeconomicdamagethisyear.Itisverydifficultfortheeconomytoreturntonormalstatethisyear.Itisverygoodiftheeconomicgrowthrateof2-3%canbeachievedinitially.Focus2:Theperformanceofthe”troika”inthefirstquarter”maintainingreasonableinvestmentgrowthisindispensableanditisnecessarytoincreasetheintensityofinfrastructureinvestment.”SaunaNightNet:Inthefirstquarter,nationalfixedassetinvestment(excludingfarmers)was841.4billionUSdollars,Ayear-on-yeardeclineof16.1%.Amongthem,infrastructureinvestmentfellby19.7%,manufacturinginvestmentfellby25.2%,realestatedevelopmentinvestmentfellby7.7%.Doesitneedpolicyforcetopromoteeconomicgrowththroughinvestment?ZhangBin:Fromtheperspectiveoftheexpendituremethod,investmentisthelargestandlargestpartofGDP.Fromtheperspectiveofexpenditure,themainsourceofnegativeGDPgrowthisnegativeinvestmentgrowth.Maintainingthenexteconomicgrowthandmaintainingreasonableinvestmentgrowtharecompulsoryoptions.Thecurrentmarketexpectationsarehighlyuncertain,andthepowerofspontaneousinvestmentinthemarketisveryweak.Itrequiresgovernmentinvestmenttodriveproductionandinvestmentinotherindustriesandtheoveralleconomicrecovery.Suchlargenegativegrowthininfrastructureinvestmentisfarbeyondnormal,anditisnecessarytoincreaseinvestment.Thekeytoensuringtheefficiencyofinfrastructureinvestmentisthatinvestmentprojectsfollowpeopleandindustries,andthereisstillmuchroomforinfrastructureinthemetropolitanarea.SaunaNightNet:Inthefirstquarter,thetotalretailsalesofsocialconsumergoodswas785.8billion,andthenfellby19.0%.DirectorLiuShijinbelievesthatthekeytosteadygrowthistostabilizeconsumption.Recently,theeconomicscommunityhasheatedlydebatedwhethertoaccumulateconsumptionvouchersordirectlysendmoneytostimulateconsumption.Whatdoyouthink?ZhangBin:Icansendmoneydirectly,orIcansendoutcoupons.Nowadays,alargenumberoflow-incomepeoplehavelostjobopportunitiesorarenotfullyemployed,andtheirincomeisgreatlyaffectedandtheyneedtoberescued.Temporarybailoutsystemarrangementsandpolicydesignforpeopleinneedareanimportantpartofbuildingawell-offsociety,sofurtherstudyandimprovementareneededinthisregard.Theepidemiccrisisprovidesvaluablelearningandtrainingopportunities.Somepreliminaryexperienceisworthexploringandlearning.Directlyissuingmoneyandissuingcouponscanachievethepurposeofincreasingconsumption,butitisnotenoughforthesteadygrowthofconsumptioninthewholesociety.Thesteadygrowthofconsumptioninthewholesocietyrequiresthestableandnormaloperationofthewholesocietyandeconomy.Withoutinvestmentandincomegrowth,stablegrowthinconsumptioncannotbeguaranteed.Fromtheexperienceofgoingoutoftheeconomicdownturn,investmentorexportsareoftenlocomotives,andconsumptioniscars.Nowlet’sseewhetherexportsareunreliable,andinvestmentisstillthefocus.SaunaNightNet:Inthefirstquarter,exportsreached3.3363trillion,adecreaseof11.4%;importswere3.238trillionyuan,downby0.7%.Thebalanceofimportsandexportswas98.3billionyuanintradesurplus.Whatdoyouthinkabouttheperformanceofexportsinthefirstquarter?Forexport-orientedexportenterprises,doyouneedtoprovidemoreassistancetothepolicy?ZhangBin:Exportmainlydependsonexternaldemand.TheInternationalMonetaryFundpredictsthatthisyear’sworldeconomywillbethelargesteconomicdownturnsincetheGreatDepressionofthelastcentury,andthedownturnwillexceedthe2008globalfinancialcrisis.Thisisalsoanunprecedentedtestfortheexportsector.Thedeclineinexportsinthefirstquarterwascausedbythedomesticeconomicshutdownandalsobythedeclineinexternaldemand.Theexportsituationisnotoptimistic.ThehighincidenceofforeignepidemicsandtheeconomicshutdownbeganinMarch,andtheimpactonexportscontinuedtograduallyemerge.Export-orientedenterprisesneedtopayattentiontovariousaspects,andneedsometemporarypolicysupport,includingsupportforcorporatecredit,taxreductions,andgraduallyreducetheoperatingcostsofenterprisestohelpenterprisessurvive.Focus3:UnemploymentIssuesSolveEmploymentPressureGovernmentconstructionprojectsstartassoonaspossibletoimprovetheemploymentofpublicmanagementservicesSaunaNightNet:Inthefirstquarter,therewere229newurbanemployeesacrossthecountry.InMarch,thenationwideurbansurveyoftheunemployedpopulation5.9%,downby0fromFebruary.3averages.Theunemploymentproblemisnotonlyaneconomicproblem,butalsorelatedtosocialstability.Whatisyoursuggestionforsolvingthisproblem?ZhangBin:Theeconomicoperationdeviatesfromnormal,andtheunemploymentpressurewillbegreatnext.Someunemploymentmaynotbefullyreflectedinthesurveyedunemploymentratedata,therearealargenumberofincompleteemployment,andsometemporaryemploymentisdifficulttounderstandstatistics.Thelabormarketpressureismainlycausedbytwogroups.Oneistheemploymentofmigrantworkers,whichismainlyreflectedinthepressureonthelabormarketstock;thesecondisthenewlygraduatedcollegestudents,whichismainlyreflectedinthepressureontheincrementalfoodmarket.Unemploymentofexportenterpriseswillalsobeabigchallenge.Solvingemploymentpressurerequiresmanyefforts.First,thegovernmentconstructionprojectstartedassoonaspossible.Theaimistodirectlypromoteemploymentandreplacetheprojectsstartedbythegovernmenttopromotetheresumptionofworkinmanydownstreamindustries.Second,relaxtheserviceindustryaccessstandards,andsomenewlyestablishedenterprisesenjoy1-2yearsofprogressiveandhouserentalpolicypreferences.Inthefuture,themaincontentofconsumptionupgradingintheresidentialsectorwillbeeducation,health,sportsandentertainment,andotherhumancapital-intensiveservices.Thekeysupportforindustrialupgradingisscientificresearch,education,businessservices,andhumancapital-intensiveservices.Theproportionofdevelopmentstagessimilartothatofhigh-incomecountriesishigherthanthatofemploymentinthehumancapital-intensiveserviceindustrymentionedabove,andtheproportionoftotalemploymentissignificantlylower,whichisashortcomingthatneedstobesupplementedbyeconomicandsocialdevelopment.Thenewcrownepidemichasbroughtpressureandalsobroughtopportunitiesforreform.Ithaseffectivelyloweredtheaccessstandardsoftheseindustriesandgrantedcertainpolicypreferences.Atthesametime,ithasopenedadoorfortheemploymentofnewgraduatesinthefutureandisalsoafutureconsumptionexpansionAndupgradeprotection.Third,improvetheemploymentofpublicmanagementservices.China’spopulationmobilitydoesnotmatchpublicmanagementservices.Inareaswithlargepopulationinflows,publicmanagementpersonnelandservicescannotkeepupwithdevelopmentneedsduetoestablishmentrestrictions.Itisnecessarytocombinetheexistingstatisticalsurveysandbigdataanalysistosolidlygraspthenumberofpermanentresidents,agestructureofpopulation,andpopulationmobilitylawsineachregion,soastoarrangeforpublicmanagementservicepersonnelbasedonmatching.Thenewlyaddedpublicmanagementservicepersonnelcannotsetlocalhouseholdregistrationrestrictionsandeducationrestrictions,andshouldhaveadistributionratioreservedformigrantworkers.Sauna,YeWangHouRunfangEditorChenLiproofreadingWangXin