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Macro Policies Should Maintain Continuity, Stability and Sustainability

Feb 01-2021   



The Chinese economy has regained its pre-pandemic potential output and can be expected to post an obvious rebound in 2021. Positive macro indices notwithstanding, the recovery is still standing on shaky ground due to uncertainties in external environments and structural differences in sectoral recovery. Therefore, macro-economic policies should maintain continuity, stability, and sustainability, said Prof. Huang Yiping of the NSD in a recent interview with the People’s Daily.

 

According to the World Economic Outlook by the World Bank, the global economy will stay in doldrum in the first half of 2021 as the pandemic rages on. Prof. Huang believed that for the whole year it is likely to grow amid uncertainties and risks.

 

China should continue its active fiscal policy and prudent monetary policy in order to buttress economic recovery. Policy moves should aim for higher accuracy and efficiency, refrain from sharp turns and twists, and achieve best timing. At the same time, the supporting policies for medium, small and micro-enterprises should be moderately extended by making transitional arrangements in credit and taxation.

 

The reforms to push down the overall financing costs of enterprises have borne fruition. In December 2020, the loan rate for companies stood at 4.61%, down by 0.51% from the end of 2019. In 2020, the average rate of new loans for small and micro-enterprises came to 5.88%, a drop of 0.82% compared to 2019. In total, the financial system ceded 1.5 trillion yuan in profits to the real economy in 2020. The overall financing costs can be stabilized and further reduced through reinforcing mechanisms by which the financial system supports the real economy and continuing the role of structural monetary policy tools in ensuring accurate funding.

 

Since 2018, China’s financial industry has quickened steps to open up. Over 50 measures have been released and the resultant achievements are laudable. To continue the drive, more work can be done in three areas: comprehensive implementation of regulations concerning pre-establishment national treatment and negative list; concertedly push forward financial opening, reform to the formation mechanism of the RMB exchange rates, and RMB internationalization; and build an oversight and risk prevention and control system in line with higher-level opening up.

 

Macro Policies Should Maintain Continuity, Stability and Sustainability

Feb 01-2021   



The Chinese economy has regained its pre-pandemic potential output and can be expected to post an obvious rebound in 2021. Positive macro indices notwithstanding, the recovery is still standing on shaky ground due to uncertainties in external environments and structural differences in sectoral recovery. Therefore, macro-economic policies should maintain continuity, stability, and sustainability, said Prof. Huang Yiping of the NSD in a recent interview with the People’s Daily.

 

According to the World Economic Outlook by the World Bank, the global economy will stay in doldrum in the first half of 2021 as the pandemic rages on. Prof. Huang believed that for the whole year it is likely to grow amid uncertainties and risks.

 

China should continue its active fiscal policy and prudent monetary policy in order to buttress economic recovery. Policy moves should aim for higher accuracy and efficiency, refrain from sharp turns and twists, and achieve best timing. At the same time, the supporting policies for medium, small and micro-enterprises should be moderately extended by making transitional arrangements in credit and taxation.

 

The reforms to push down the overall financing costs of enterprises have borne fruition. In December 2020, the loan rate for companies stood at 4.61%, down by 0.51% from the end of 2019. In 2020, the average rate of new loans for small and micro-enterprises came to 5.88%, a drop of 0.82% compared to 2019. In total, the financial system ceded 1.5 trillion yuan in profits to the real economy in 2020. The overall financing costs can be stabilized and further reduced through reinforcing mechanisms by which the financial system supports the real economy and continuing the role of structural monetary policy tools in ensuring accurate funding.

 

Since 2018, China’s financial industry has quickened steps to open up. Over 50 measures have been released and the resultant achievements are laudable. To continue the drive, more work can be done in three areas: comprehensive implementation of regulations concerning pre-establishment national treatment and negative list; concertedly push forward financial opening, reform to the formation mechanism of the RMB exchange rates, and RMB internationalization; and build an oversight and risk prevention and control system in line with higher-level opening up.