news

tencent news "first line"

author: feng biao

editor｜liu peng

"funds will be raised mainly by issuing ultra-long-term government bonds, forming an economic stimulus of no less than 10 trillion yuan within 1-2 years, driving the economy back on track for expansionary growth."

on september 21, at the china macroeconomic forum (cmf), liu shijin, former deputy director of the development research center of the state council, made such a suggestion. in liu shijin's view, china's economy still has the potential for medium-speed growth, and should not simply follow the quantitative easing policies of developed countries, but should launch an economic revitalization plan of "package stimulus + reform".

specifically, liu shijin analyzed that the current chinese economy is facing the problem of insufficient aggregate demand, which is currently undisputed. however, the problems caused by insufficient aggregate demand should be distinguished from the causes of aggregate demand. he believes that problems such as employment, finance, consumption, and local debt risks are largely caused by insufficient aggregate demand.

but what is the reason for the lack of total demand? liu shijin believes that the size of the middle-income group has a significant impact on demand. this group of people can release a larger scale and longer period of demand, thus providing a relatively long period of support for medium-speed growth. on the contrary, if the income gap is relatively large and the size of the middle-income group is relatively small, the consumption potential is limited. after it is released to a certain extent, the growth will slow down significantly, leading to a dilemma of low speed or even stagnation or retreat.

regarding the specific situation in my country, liu shijin said that the middle-income group in my country accounts for about one-third, or about 400 million people, and below this there are more than 900 million low-income groups, accounting for two-thirds.gini coefficientit is above 4%, so the insufficient demand faced by our country is related to this demand structure.

in addition to the income gap, liu shijin believes that it is also necessary to pay attention to the distribution of actual public services. the distribution of public services among different income groups is uneven.

it is worth noting that on the issue of how to expand demand and boost consumption, liu shijin said that there have been strong calls for quantitative easing recently, but he believes that it is not appropriate to simply follow the quantitative easing policies of developed countries.

he explained that developed economies are mature economies, and their structural potential has basically been exhausted, so they are in a period of slow growth, and growth is basically maintenance or depreciation growth. therefore, for developed economies, liu shijin believes that a one-point interest rate cut basically determines the trend of the entire economic growth, and the impact is very large.

however, liu shijin believes that for china, it has not yet entered the period of low growth of developed economies and there is still potential for medium-speed growth. the extent to which the structural potential can be released depends on whether it has a suitable institutional and policy environment, and reform is to create such environmental conditions.

in terms of policy recommendations, liu shijin proposed that an economic revitalization plan of "package stimulus + reform" could be introduced to drive the economy back on the track of expansionary growth, including the implementation of reform measures for urban-rural integrated development, with fiscal policy as the main approach and close coordination with demand-side structural reforms, thereby forming a comprehensive effect of expanding consumption, stabilizing growth, and preventing risks.

specifically, liu shijin put forward three suggestions:

first, raise funds mainly by issuing ultra-long-term government bonds, and form an economic stimulus of no less than 10 trillion yuan within 1-2 years. unlike the 4 trillion yuan investment in 2008, the focus this time is to make up for the shortcomings of basic public services. in the past, the focus was on material capital investment, but this time it is human capital investment to enhance development-oriented consumption.

second, there are two major breakthroughs in expanding consumption. the first breakthrough is to greatly improve the basic public service level of new citizens, mainly migrant workers. the second breakthrough is to accelerate the construction of small and medium-sized cities within the metropolitan area and drive china's second round of urbanization.

third, we need to set a goal, namely, to take this economic revitalization plan as an opportunity to strive to achieve the goal of doubling the middle-income group in about ten years, from the current 400 million middle-income population to 800-900 million. proposing and promoting the realization of this goal is of fundamental significance to extending the medium-speed growth period as much as possible and breaking the demand constraints.

liu shijin concluded that the implementation of the above-mentioned economic revitalization plan will help to fill the gap in insufficient total demand more quickly at the margin in the short term, drive economic growth into an expansionary cycle, and at the same time use stimulus + reform methods and spend money to build new systems, which will also create conditions for high-quality and sustainable economic and social development in the medium and long term.