Yu Miaojie: 5.3% GDP Growth Potential
Jun 09-2020
China has set no GDP growth figure for this year to avoid landing local governments in a passive position of vying for the sake of numbers. Instead, the focus is being put on safeguarding jobs and stable incomes for its residents. Despite this, Prof. Yu Miaojie of the NSD believes that the GDP will reach 3% in annual growth and might be able to hit 5.3% if the right policy mix is fully tapped.
Prof. Yu makes the argument in a commentary for a media portal. He’s CCP Secretary and Deputy Dean of the NSD. For him, the policy mix includes proactive fiscal policy, prudent monetary policy, and an even more open international policy. A 5.3% growth will ensure the realization of the goal of building a moderately well-off society in an all-round way within the 13th Five-Year Plan.
Facing the pandemic, China has set its budget deficit at 3.6%, which is conducive for spurring economic development and remains lower than that of many countries. A total of around 30 trillion yuan is at disposal for pulling economic growth, including 20 trillion yuan in the original budget plan, 3.78 trillion yuan made possible by the planned budget deficit, 1 trillion yuan from special treasury bonds for fighting the pandemic, and 3.75 trillion yuan from local ad-hoc bonds. Though an obvious inflation can be ruled out, Prof. Yu admonishes against random money printing in the future.
He lauds new infrastructure construction such as 5G, AI and EV charging stations as an important step in China’s drive towards Industry 3.0. China’s economic growth, he says, needs to rely on the integration of urbanization, industrialization, and informatization. With the 14th Five-Year Plan in sight, Prof. Yu argues that four driving forces should be harnessed, namely economy of scale, industrial chain integration, demographic dividend, and institutional dividend.
