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on september 26, the political bureau of the cpc central committee held a meeting to analyze and study the current economic situation and plan the next economic work.

the meeting emphasized the need to increase countercyclical adjustments in fiscal and monetary policies, ensure necessary fiscal expenditures, and effectively implement the "three guarantees" work at the grassroots level. it is necessary to issue and make good use of ultra-long-term special treasury bonds and local government special bonds to better play the driving role of government investment. it is necessary to lower the deposit reserve ratio and implement a strong interest rate cut. it is necessary to promote the real estate market to stop falling and stabilize, adjust housing purchase restriction policies, and reduce existing mortgage interest rates. the meeting also pointed out that it is necessary to help enterprises tide over difficulties and further standardize enterprise-related law enforcement and regulatory behaviors.

jia kang, founding director of the china institute of new supply-side economics and researcher at the chinese academy of fiscal sciences

recently, jia kang, the founding director of the china new supply-side economics research institute, said in an exclusive interview with the paper that this meeting sent a strong signal and guided relevant departments to launch "big moves" with a sense of responsibility and urgency under a problem-oriented approach. the recent "amplification" of monetary policy is very necessary, and fiscal policy must keep up. incremental fiscal policy should still focus on investment, and use long-term public debt to support the government to better make effective investments that it is suitable for. at the same time, when using fiscal funds, special attention should be paid to better solving people's livelihood problems, enhancing social harmony, and making the benefits of the people more tangible and accessible in accordance with the requirements of the central government. for example, the total amount of funds required to provide minimum living allowances to residents who have no jobs and no unemployment benefits is actually not too much. compared with the scale of national debt financing, it does not pose obvious pressure, but it is very important for the realization of social policies. the possible positive effects on people's livelihood security and social harmony, as well as the optimization of the government's image, are very worthy of attention.

jia kang pointed out that the policies proposed at the meeting for the real estate market are very practical. at present, only single-digit areas in the country still implement purchase restriction policies. in the next step, it is healthy to consider more liberalization or even complete cancellation. "in the commercial housing market, in the relationship between supply and demand, under circumstances where major changes have occurred, it is no longer necessary for local jurisdictions that have transformed into a buyer's market to implement administrative purchase restrictions, which is more in line with the internal logic of a high-level socialist market economic system."

in addition, jia kang believes that boosting the confidence of private enterprises is also a top priority, and we must quickly do some practical things in this regard. for example, we can consider selecting models, publicly handle some cases that infringe on the rights and interests of private enterprises and private entrepreneurs, and protect and promote the development of the private economy. grow.

incremental fiscal policy still needs to focus on investment, and supporting effective government investment with long-term public debt is a key task.

the paper:at the political bureau meeting of the cpc central committee held on september 26, which proposals were you more concerned about? what signals will it send by convening this meeting with three months left in this year?

jia kang:this meeting has a strong problem orientation and can be considered as providing significant central guidance in response to the current challenging situation. the policy combination with extraordinary policy characteristics has actually been outlined in the spirit of the meeting. the whole article comprehensively reflects the current situation of overcoming difficulties and responding calmly, increasing macro-control efforts, deepening reform and opening up, expanding domestic demand, optimizing economic structure, striving to promote stable system integration, and expanding domestic demand in counter-cyclical control. increase your efforts.

the meeting emphasized that it is very important to "look at the current economic situation comprehensively, objectively and calmly", that is, the fundamentals of my country's economy, such as a vast market, strong economic resilience and great potential, have not changed, but special attention should be paid to the emergence of new situations and questions. the meeting proposed to "effectively enhance the sense of responsibility and urgency for doing a good job in economic work." this "sense of urgency" means that we can no longer wait or hesitate, and must work hard to solve problems. then it was proposed that "we must seize key points, take the initiative, effectively implement existing policies, and step up efforts to introduce incremental policies." this corresponds to the operability. the final goal is to "strive to complete the economic and social development goals and tasks throughout the year." in exchange for in other words, challenging problems may prevent the annual development goals from being achieved as expected, and efforts must be made to achieve the desired results. under the guidance of the problem, "big actions" must be launched with a sense of responsibility and urgency.

the paper:the meeting's request for fiscal and monetary policies is still to "increase adjustment efforts." at present, further fiscal incremental policies have not yet been introduced, and the market is also calling for it. what do you think? what do you think are the directions for efforts?

jia kang:first of all, the meeting mentioned that necessary financial expenditures should be ensured and the "three guarantees" work at the grassroots level should be effectively done. nowadays, the "three guarantees" at the grassroots level are obviously facing some severe difficulties and challenges. in this regard, i have a suggestion: use the funds raised by the central government’s special treasury bonds, and let the financial departments at all levels use the treasury centralized payment system to ensure the payment of salaries and basic operations of public employees at all levels in stages.

what needs special attention is that the meeting mentioned that "it is necessary to issue and use ultra-long-term special government bonds and local government special bonds to better play the leading role of government investment." this outlines the main financial support tools currently available in finance and the main direction of its efforts, namely ultra-long-term special treasury bonds and local government special bonds, has considerable room for maneuver by exchanging time for space. it is necessary to use effective investment to drive the overall situation for the better. this is the meeting's focus on fiscal policy. special emphasis. what to do with the funds from these public bonds? the highlight should be government investment, which is more suitable for solving some long-term infrastructure and public works projects that are beyond the capabilities of non-governmental entities when encountering market failures, but objectively need to be done, affect the overall situation, promote structural optimization and development potential. for example, what we are talking about now is "double". these projects require top-level planning and multi-sectoral chess, and are suitable for the government to take the lead. now is the time to seize the opportunity of countercyclical regulation to expand domestic demand, do these things more actively, drive economic recovery, and also drive non-governmental entities to boost confidence creates positive expectations, which in turn activates the investments that non-governmental entities should make.

in this regard, the investments suitable for the government to make efforts have special characteristics. we should not only look at direct performance, but also look at comprehensive performance. some projects are based on direct cost-benefit analysis. there is no hope of recovering the investment, but their comprehensive performance must be fully evaluated. it is certain that projects such as the construction of the qinghai-tibet railway were considered and implemented by linking economic functions to comprehensive performance at all levels of society and politics beyond the economy.

therefore, one of the key points of incremental fiscal policy should still focus on investment, and use long-term public debt to support the government in making effective investments that are suitable for it.

as for the scale of fiscal policy efforts, attention should be paid to its relative weight. for example, in 2008, my country launched a 4 trillion yuan government investment economic stimulus package, which was equivalent to more than 1/10 of the national gdp that year. china's gdp in 2023 has exceeded 126 trillion yuan, but the budget adjustment plan implemented in the fourth quarter of last year was only 1/10. the additional issuance of 1 trillion treasury bonds. this year’s first round of ultra-long-term special treasury bonds is only 1 trillion, which accounts for less than 1% of gdp. therefore, we are now increasing the scale of treasury debt financing and arranging it to 4 trillion or even 100,000 yuan. billion is not an exaggeration.

the paper:how much room is there for investment in the aforementioned projects? will this increase the burden on the government?

jia kang:there are many projects that can be done, and they are everywhere in china. for example, the construction of sponge cities for disaster prevention and reduction must be coordinated with the construction of underground comprehensive pipe corridors, as well as the infrastructure construction of the entire basin of rivers, lakes and reservoirs, and basic farmland irrigation. system construction; construction of public transportation infrastructure and supporting parking spaces in the central area, renovation of old residential areas in various regions, key hardware projects for rural revitalization, etc. cannot be completed in 8 or 10 years.

we have no shortage of production factors, including steel, cement, labor force, technical strength, and management strength. now is the time to exert our efforts. the government makes such effective investments to stimulate domestic demand, and these projects are easy to implement. with employment, there will be income for the people, and consumption potential will be released. in fact, there is still considerable room for infrastructure construction. as far as the construction of public transportation systems in various places is concerned, they must be upgraded. the comprehensive deployment and construction of subways, light rails, etc. must be more generous.

in addition, it should be emphasized that as long as the public sector debt mechanism is used properly, these will not increase the burden on the government, because long-term and ultra-long-term national debt have 30 to 50 years of room for maneuver, which is very worthy of use, and it is still used in a safe zone. for example, in 1998, my country issued special treasury bonds for the first time. the issuance scale was 270 billion yuan for a period of 30 years. it was used to supplement the capital of the four major state-owned banks of industry, agriculture, china and construction. at the time, it seemed astronomical. 270 billion yuan. when the principal is repaid in 2028, it will only be a small part of the entire fiscal expenditure, less than 1%.

in the next stage, monetary policy will be on the channel of lowering interest rates and reserve requirement ratios, and it should continue to "take action" when it is time to "take action"

the paper:what do you think monetary policy should do next?

jia kang:monetary policy is now more determined and powerful, but some people are worried that after the "big move" is over and there is no fundamental support, the market sentiment will fall again. we must see that the basic characteristics of our stock market are still policy markets and news markets. in the long run, we need to cultivate vitality and better reflect high-quality development from the fundamentals first, so as to better make the market more generally good. expected. the expectation management emphasized by the third plenary session of the central committee of the communist party of china is actually aimed at this kind of problem. in recent years, economic theory has been combined with practice to form a basic consensus, that is, expectations are self-reinforcing and self-fulfilling. whatever the general expectations are, the actual results are likely to be similar. we have to admit that there are low confidence and poor expectations in the market. the so-called temperature difference between macro indicators and micro experience shows that market confidence is still insufficient. how to cheer up the fundamentals is very critical. after this "amplification move" of monetary policy, the space behind should be to continue to "take action" when it is time to "take action" in the channel of interest rate cuts and reserve requirement ratios. but i think that after this "big move" in monetary policy, the "big move" in fiscal policy should be followed closely.

provide minimum living allowances to low-income groups to achieve people's livelihood security and social harmony underpinned by social policies

the paper:the meeting also paid attention to consumption, combined it with improving people's livelihood, and proposed to increase the income of low- and middle-income groups. what do you think?

jia kang:the goal of promoting consumption is to improve people's lives and meet their needs for a better life. this is the starting point and destination of all our economic activities. while promoting consumption and expanding domestic demand, more consideration should be given to benefiting middle- and low-income groups.

i believe that the use of fiscal funds can better solve people's livelihood problems in a focused manner, enhance social harmony, and make the benefits of the people more tangible and accessible in accordance with the requirements of the central government. for example, to provide minimum living allowances to residents who have no job and no unemployment benefits, funds raised from central government special treasury bonds can be used. the financial department, through the treasury centralized payment system in cooperation with the people's bank of china and the financial department, uses urban and rural resident id card information and the "health code" used during the epidemic is used as a carrier and is distributed directly to individuals point-to-point. compared with the scale of national debt financing, this small amount of funds that need to be released does not constitute obvious pressure, but it may have a negative impact on the realization of people's livelihood security and social harmony as the basis for social policies, as well as the optimization of the government's image. the positive effect is very worthy of attention. this is a fundamental way to benefit people's livelihood, and it is also an urgent matter that should be done to resolve social conflicts in the short term.

fiscal policy should mobilize the potential of existing real estate

the paper:regarding the real estate market, the "stopping decline and stabilizing" and "strictly controlling increment, optimizing stock, and improving quality" mentioned at the meeting are all new ideas. what changes do you think the real estate market will usher in in the next stage?

jia kang:real estate is the focus of the central government. the working goal of the real estate market at this meeting is very clear, which is to "promote the real estate market to stop falling and stabilize." this means that now is the stage when real estate is bottoming out and will definitely not collapse. on the face of it, it shouldn’t fall any further. how to do it specifically? "for the construction of commercial housing, we must strictly control the increment, optimize the stock, improve the quality, increase the loan supply for 'white list' projects, and support the revitalization of the existing idle land." it also mentioned adjusting the housing purchase restriction policy, reducing the interest rate of existing mortgages, etc. these are very specific policy guidance and should be implemented as soon as possible. for example, currently only single-digit areas across the country still implement residential purchase restriction policies. the next step can be to consider more liberalization, or even complete cancellation would be healthy. in the commercial housing market, after major changes in the relationship between supply and demand, any local jurisdiction that has turned into a buyer's market will no longer need to implement administrative purchase restrictions. this is more in line with the internal logic of a high-level socialist market economic system.

the paper:what can fiscal policy do to support the housing market?

jia kang:fiscal policy must first cooperate with other policies to provide a good foundation for dual-track real estate planning. for rental housing, long-term rental housing, and shared ownership housing, finance can provide specific support in the form of subsidies in these areas. there are two forms of support for affordable housing, one is "brick support" and the other is "head support". the so-called "replenishing bricks" means supporting the construction of new affordable housing; the so-called "replenishing people" means using fiscal policy funds as a support to form preferential measures, mobilizing the potential of the real estate stock in the jurisdiction, making overall arrangements, and converting the housing supply into rental affordable housing. , the government will use financial subsidies to bear part of the housing rent of the low-income group. if finance makes efforts in this area, the overall performance will of course be higher. there is no need to use a larger scale of funds to build new affordable housing, but to mobilize the potential of existing real estate.

we cannot cause greater difficulties to enterprises in the name of strengthening management.

the paper:in terms of supporting the development of enterprises, especially private enterprises, the meeting focused on "helping enterprises overcome difficulties and further standardize enterprise-related law enforcement and regulatory behaviors." why emphasize these contents?

jia kang:the phenomenon targeted by these proposals has been hotly debated in society. that is, due to the financial constraints of local governments, some places have begun to rely on fines, confiscations, retaliation, and recourse to obtain revenue in the name of strengthening supervision to increase government revenue and increase available financial resources. in the first half of this year, the national gdp growth rate was 5.0%. general public budget revenue showed negative growth due to the combined impact of some incomparable factors and price factors. however, the growth rate of local non-tax revenue reached over 11%. this is obviously contains a very obvious twist. the meeting's emphasis on "further standardizing enterprise-related law enforcement and regulatory behaviors" is aimed at these issues. to help enterprises overcome difficulties, we can no longer cause greater difficulties to enterprises in the name of strengthening management. we must eliminate the obvious negative impact of distorted government behavior caused by local government financial pressure on the current market confidence and expectations.

the paper:in the three months left this year, what do you think should be done as a top priority to achieve the full-year economic growth target?

jia kang:the recent "amplification" of monetary policy is very necessary, and fiscal policy must keep up. these are the two most important policies for macroeconomic control, and they must be coordinated and coordinated. in the fourth quarter of last year, the central government implemented a budget adjustment plan to issue an additional 1 trillion yuan of treasury bonds to optimize macro governance, which is a very important measure to guide expectations. i think it is necessary to draw on past experience this year to truly implement the spirit of this political bureau meeting.

in addition, the central government has emphasized that boosting corporate confidence is a key point, and we must quickly do some practical things in this regard. for example, we can consider selecting models and publicly handle some cases that infringe on the rights and interests of private enterprises and private entrepreneurs, so as to better and more effectively protect and promote the private economy develops and grows.