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tencent news "first line"

author: feng biao

editor｜liu peng

on september 21, at the china macroeconomic forum (cmf), wang yiming, vice chairman of the china center for international economic exchanges, believed that the overall performance of china's current economic operation is that supply is stronger than demand, and external demand is better than domestic demand, showing an imbalance between supply and demand. he suggested increasing policy efforts, making good use of ultra-long-term government bonds, and monetary policy should reduce capital costs. in the consumer sector, access should be relaxed to meet the diversified consumption needs of middle- and high-income groups.

wang yiming's basic judgment on the current macroeconomic situation is that since the beginning of this year, china's economic operation has been generally stable, major macroeconomic indicators are in line with expectations, economic fundamentals remain stable, there are many bright spots on the supply side, new momentum is accelerating growth, the high-end, intelligent and green transformation of manufacturing is accelerating, new quality productivity is also accelerating development, the role of scientific and technological innovation is increasing, and green and low-carbon transformation is also taking new steps. however, at the same time, the economic operation is still facing many difficulties and challenges, especially the problem of insufficient effective demand is still prominent.

wang yiming believes that the deep-seated reasons for insufficient effective demand are mainly three aspects:

the first is the inertia of past development methods. in the past, the development method of "expanding investment and exports" mainly adopted the issuance of bonds and projects to stimulate economic growth by expanding investment and capacity when faced with external shocks and increasing downward pressure on the economy.infrastructurethis model is effective when there is a large gap in production capacity, but as the space for infrastructure investment narrows, the debt pressure accumulated by local governments continues to increase, and the marginal returns of investment decrease. the effectiveness of this model in expanding domestic demand is also gradually decreasing. to this day, people still think of issuing more treasury bonds and carrying out construction projects. the inertia of this model still exists.

the second is the demand contraction effect brought about by the deep adjustment of the real estate market. in 2010, the sales of real estate peaked at 18.2 trillion yuan, and it reached 11.6 trillion yuan last year, with a demand gap of 6.6 trillion yuan. in the first eight months of this year, it fell by 23.6%. according to this, the annual sales may be only 9 trillion yuan. although emerging industries such as new energy vehicles, lithium batteries, photovoltaics, and equipment have strong growth, it is difficult to effectively make up for the gap formed in the real estate market in the short term during the conversion of new momentum.

third, the damaged balance sheet has affected consumption and investment expectations. the impact of the epidemic and the decline in real estate prices have brought about asset impairment, which has a relatively obvious contraction effect on the balance sheet of the household sector. coupled with the stock market effect, it affects the property income of residents, which will have a great impact on residents' consumption behavior, making consumption more cautious and the motivation to save stronger; other sectors, such as enterprises with high debt levels, will also be affected in their investment capacity and willingness. on the asset side of local governments, property and land transfer income have declined, debt repayment pressure has increased, and debt repayment factors will also drag down investment, especially infrastructure investment. therefore, the repair of the balance sheet requires the improvement of fundamentals and the recovery of asset prices, which determines that the recovery of effective demand also requires a process.

how to achieve the annual target? wang yiming believes that in the short term, we still need to increase the intensity of macroeconomic policies to promote the rebalancing of supply and demand; in the medium and long term, we must rely on reform and opening up to release the potential for economic growth.

wang yiming also emphasized the significance of ultra-long-term government bonds in promoting economic growth. he gave specific suggestions on what ultra-long-term special government bonds should be used for and how to repay them:

first, we need to gradually speed up clarification and provide corresponding support to construction projects and major projects in key debt reduction provinces.

second, it is necessary to increase policy efforts to effectively expand domestic demand. if downward pressure increases in the fourth quarter, it is also necessary to effectively expand the scale of the fiscal deficit. in the case of declining local financial resources, weakened investment capacity, increased arrears, and increased non-tax revenue, the scale of the fiscal deficit should be expanded to help local governments pay off corporate accounts owed during the epidemic, especially to help local governments pay off accounts by responding to public health expenditures during the epidemic. in the case of insufficient local project reserves, this is more conducive to expanding domestic demand than carrying out projects, and it can also enhance the confidence of enterprises.

in terms of monetary policy, wang yiming believes that in the current situation where the monetary policy is relatively loose and the financing demand is not very strong, it is not possible to simply loosen it further. he believes that it is more important to reduce the cost of funds, increase the deficit, issue general bonds, and lower interest rates, especially now that the federal reserve has lowered the interest rate by 50 basis points beyond expectations, which also provides more room.

in terms of releasing consumption potential, wang yiming believes that the most important thing is to relax market access to meet the diversified consumption needs of middle- and high-income groups. for example, the recent opening of foreign-funded hospitals is a very positive signal of reform and opening up.

in the real estate sector, wang yiming believes that multiple measures should be taken to stabilize the real estate market, and the supply side should implement "guaranteed delivery of buildings", especially white-list projects, and the substantive regulations of loans and due diligence exemption guidelines can be used to eliminate banks' financing concerns. he suggested that the risks of enterprises and projects should be properly isolated, which will also be conducive to the enthusiasm of banks to provide loans.

on the real estate demand side, he believes that it is mainly the acquisition of existing houses. now there are refinancing tools, and it is necessary to standardize the evaluation of acquisition prices and promote the implementation of refinancing policies. the problem of the interest rate spread between existing and incremental mortgage loans needs to be better resolved, which will play a positive role in stabilizing the real estate market.