Experts weigh in on Central Economic Work Conference

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Experts weigh in on Central Economic Work Conference

2020-12-23

By: Jia Jinjing      Source: chinadaily      Published: 2020-12-23



The key tasks outlined at the meeting include promoting high-quality development, boosting technology innovation, consolidating the security and stability of industrial and supply chains and strengthening the domestic market's support for economic growth.

Let's take a look at what experts had to say about the meeting.


Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges. (Photo/chinanews.com)

2021 is the starting year of China's 14th Five-Year Plan period. Over the past 40 years, China's reform and opening-up told stories about market economy, export-oriented economy and industrial economy. In the next 30 years, China can tell three new stories: technological innovation, corporate compliance and enhancement of industrial, value, supply and innovation chains.


According to a statement released after the Central Economic Work Conference, China will make efforts to build more independent and controllable industrial and supply chains.


New scientific and technical revolution is transforming into the digital revolution, which makes global industrial and supply chains shorter, more flexible and more resilient to satisfy local demands, Zhang said.


Li Junfeng, managing director of the China Energy Research Society. (Photo/chinanews.com)


China will formulate an action plan for peaking carbon dioxide emissions before 2030, according to a statement released after the annual Central Economic Work Conference concluded.


During this process, the country should improve energy efficiency, promote energy structure and raise the share of nonfossil energy, Li said. These are also priorities during the 14th Five-Year Plan period.


"2021 is a special year, and we hope it will become a good start for China to realize its energy goals."


It's necessary to safeguard energy safety, ensure stability, continuity and sustainability of energy supply during the process of energy transform and satisfy the basic needs for economic development and people's livelihood, Li added.


Zhao Ping, vice-president of the Research Institute of China Council for the Promotion of International Trade. (Photo/chinanews.com)


Calling for the country to take "a solid first step" in building the new development paradigm in 2021, the Central Economic Work Conference underlined the need to fully tap the potential of the domestic market, and expand consumption and effective investment in a way that is oriented toward improving people's livelihoods.


Under the new development paradigm, the country will stick to expanding domestic demand, highlighting the importance of consumption, Zhao said.

In the future, the potential of the domestic consumption market should be fully tapped, Zhao said. In terms of the content of consumption, there is more room for growth in innovative products, green products and service consumption.


Wen Bin, chief analyst with China Minsheng Bank. [Photo/chinanews.com]


For next year, the Central Economic Work Conference said China will keep its macro policies consistent, stable and sustainable, with continued implementation of a proactive fiscal policy and prudent monetary policy.


"There's still plenty of room for next year's monetary policy," Wen said, adding that to ensure a stable macro leverage ratio, the growth of M2 and social financing should basically match with that of GDP.


At present, China's economic growth expectations are optimistic, at least for the first half of next year, Wen said. If inflation doesn't rise again, there is high probability that the central bank will maintain the medium-term lending facility rate unchanged. However, the possibility that banks provide a discount cannot be ruled out.


Xu Gao, chief economist at BOC International (China).


It is appropriate to add boosting domestic demand as a policy priority amid the COVID-19 pandemic, which will work hand in hand with supply-side reforms to ensure steady economic development despite prolonged uncertainties.


"Apart from the supply-side structural reform, the meeting called for the expansion of domestic demand. The latter is particularly crucial after COVID-19 hammered global demand, which was already under heavy pressure even before the pandemic," Xu said.


Demand-side policies such as maintaining the consistency of macro policy and narrowing the income gap will help expand domestic demand, while supply-side measures such as boosting the supply of healthcare and education services will meet growing demand and translate it into new growth momentum, Xu said.


Jia Jinjing, principal researcher with the Chongyang Institute for Financial Studies at Renmin University of China. [Photo/chinanews.com]


According to the Central Economic Work Conference, intensifying anti-monopoly and preventing "disorderly capital expansion" will be the top priorities for next year. Meanwhile, financial innovation should be carried forward in the context of prudential regulation.


Jia said a signal that the central government wants to send is to improve rules of digital use and digital collection and management. Improving rules of digital use is one of the preconditions for speeding up digital development; otherwise, financial risk occurs.


Lou Jianbo, director of real estate law research center at Peking University. 


According to the Central Economic Work Conference, China will work to solve prominent housing problems in big cities as one of its key economic tasks for 2021.


More attention will be given to the construction of government-subsidized rental housing, with policy improvements to ensure equal rights of tenants and house buyers for public services.


At present, there are several problems in China's rental housing market, such as unmatched supply and demand in types of housing and difficulties in renting a house for a long time, Lou said. If rent adjustments are listed in tenancy agreements, and some elastic clauses are added to satisfy both sides, it will benefit the long-term development of the rental market.


Jia Jinjing is assistant dean of Chongyang Institute for Financial Studies at Renmin University of China.


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