Yu Miaojie: 4.5% Growth Rate Needed
Mar 17-2020
Positive signals have been emanating from top-echelon meetings for spurring domestic consumption, expanding opening up, and winning the war on poverty alleviation. Recently, Prof. Yu Miaojie, Deputy Dean of the NSD, had an interview with The Beijing News on some important issues.
In 2020, China is set to build itself into a moderately prosperous society and achieve two crucial goals of its 13th Five-Year Plan. Given the drag of the epidemic, the Chinese economy should maintain a growth rate of at least 4.5% this year to ensure realization of the goals, said Prof. Yu. A tandem of fiscal and monetary policies is needed. The former has released many measures such as lowering interest rates and offering loans of low or no interest. The latter will be the focal point in the next phase. Prof. Yu proposed shifting tax reduction from income-end to production-end (manufacturers), and turning up the volume of local ad-hoc bonds and special-purpose treasury bonds.
Moreover, he suggested moderately expanding fiscal deficit. “An increase to 4% won’t affect long-term economic growth,” he said, pointing out that it’s 4.6% and 6.1% in the US and India respectively.
On the job front, Prof. Yu was cautiously optimistic about the prospect for university graduates this year. If the epidemic is effectively tamed by May, then the negative impact will be limited. As more and more regions allow offices and factories to resume work, frictional joblessness shall decrease or disappear.
Commenting on the extraordinary event that the US stock market hit the circuit breakers, Prof. Yu believed that the global economy will slow down but an economic crisis is out of the picture. Being at the center of global value chains, China’s steady performance will be conducive to the US and Europe in the upper reaches and countries like the ASEAN ones in the lower reaches.
