China Economic Observer Examines Reform and Economic Performance
Aug 01-2024
The 69th China Economic Observer (CEO), an event of the NSD, was held on July 28, 2024 to probe economic performance and impending reforms. Prior to it, the Third Plenary Session of the 20th CCP Central Committee had released a number of documents on reforms, and the National Bureau of Statistics had publicized the economic figures of the first half of 2024.
In his keynote speech, Xu Xianchun, a statistics researcher, looked into the economic data in four areas, namely production, demand, income, and price, to dissect the salient features of economic performance in the first half of 2024 and identify the levers to pull in the second half of the year. Production-wise, the Secondary Industry had maintained a rather fast growth, while the Tertiary Industry had seen a slowdown in growth rate. In terms of demand, consumption had played a major pulling role but its effect had weakened. As for income, residents earned steadily more, but the pace had slackened. Lastly, consumer prices had edged up only marginally but managed to reverse the downward trend; manufacturers had continued to experience decreasing prices, albeit the skid had been conspicuously milder.
Zhao Bo, NSD Associate Professor of Economics, shared his findings on the inclusiveness and sense of gain in economic development. He pointed out the striking imbalances in economic recovery: Consumption trailed manufacturing, and small and medium-sized enterprises paled before large ones. These deserve much more attention as measures are being taken to beef up the economy. To enhance the inclusiveness and sense of gain in economic development, a range of important issues need to be addressed, including deepening reform to further ensure fairness in income distribution; optimizing the supply of public goods to reduce regional gaps; promoting the coordinated development of state-owned enterprises and private ones; and balancing the relations between the government and the market.
Yang Zhiyong referred to decisions by the CCP Central Committee and spoke on the direction and logic of fiscal and tax reform. He is Chief Editor of China Social Sciences Press and Director of the Fiscal and Tax Research Center of the Chinese Academy of Social Sciences. By unpacking the relations between budget, tax system, and inter-government fiscal arrangements, he said that fiscal issues are not merely economic ones as they concern the foundation and major pillars of national governance. The gap between the current state of public finance and its positioning bears out the direction of reform, he said. Fiscal reform, as an institutional one, should aim for the mid and long term. He pointed out that fiscal and tax reform is highly challenging and budgetary reform is particularly complex; therefore, concerted efforts by the central government and local ones are needed, and domestic and overseas experiences can be learned to make top-level design and professional action plans.
Lu Feng, NSD Alumni Development Fund Professor, spoke on macro-control and overall balance. After reviewing the evolution of macro-control and the core exposition in latest reform decisions, he put forth and analyzed the new imbalance in the macro-economy featuring strong supply and weak demand, which has gained traction since 2018. As China’s domestic demand is susceptible to the influence of multiple factors, it has been hard to expand and its overall weak condition tends to elude people’s observation and attention. As such, policy measures need to be more systematic and powerful before demand can be augmented and imbalance rectified, said Prof. Lu.
