How can China properly respond to downward pressure on the economy?
"We have rich experience in coping with downward pressure on the economy, and will not hesitate to take steps. "
Today's newsletter is a translation of the remarks made by 韩文秀 Han Wenxiu, the official with the Central Committee for Financial and Economic Affairs, at a press conference Thursday in response to a question on China's economic prospects.
Han Wenxiu, who frequently makes key comments in response to outsiders' concerns about China's economic policies, such as common prosperity, highlighted four priorities in the government's actions to stabilize the economy in response to a question from Reuters.
On a macroscale, Ginger River believes Han's remarks reflect the government's recognition of and response to the country's current challenges in assuring economic success in the face of the epidemic and other internal and external constraints. So, even though Xinhua News Agency has published a news story and people.com has published a Chinese commentary after the press conference, Ginger River believes it is still necessary to provide a full-text translation for your convenience.
Reuters: Because of the epidemic's impact, several analysts anticipate that China’s economic growth may decelerate dramatically in the second quarter, or perhaps turn negative. How can China's macro policy effectively respond to it? What incremental policy tools will be used? [Reuters's first question about China’s green finance and an official’s response to it was abbreviated here]
Han Wenxiu: As we know, the Political Bureau of the Communist Party of China (CPC) Central Committee recently held a key meeting to analyze the current economic situation and economic work. The CPC Central Committee has predicted the increased downward pressure on the economy. Regarding the rising risks caused by the resurgences of COVID-19 and the Ukraine crisis, the CPC Central Committee clearly asserted that efforts should be made to contain the epidemic, stabilize the economy and keep development secure. All those aspects should be taken into account, and you cannot fix just one at a time. It is quite difficult work. The earnest implementation of this work is a major test for all regions and departments.
The epidemic is "a tiger in the way" of economic and social development. It requires scientific, precise and effective measures to prevent and control COVID-19, which is an essential pre-condition for the normal operation of the economy and society. In terms of economic work, first, efforts should be made to implement the existing policies in the first half of the year. The State Council and relevant departments are working closely and continuously on detailed policy steps to help industries, small and medium-sized enterprises and individual businesses that are severely affected by the epidemic, and stabilize the broad masses of market entities/players.
Second, we need to plan and launch incremental policy instruments with urgency. There is sufficient room for fiscal, monetary policy and other policies, and we have various policy tools. We have rich experience in coping with downward pressure on the economy, and will further strengthen macro-control in response to the situation. We will not hesitate to take steps.
Third, we must be adept at employing the reform approach to address development issues. The market vitality and development potential of China is enormous, yet they are absolutely real. The key is to stimulate them. To give a strong impetus for development, we will unwaveringly deepen reform, extend openness, and revive the economy.
Another key point is to fully tap the potential of domestic demand. The Central Committee for Financial and Economic Affairs recently emphasized the importance of making all-out efforts to improve infrastructure development and making effective investments. We also need to boost consumption to drive the economic cycle. For this, the relevant departments are working on the implementation of new policy initiatives. They will plan and act.
In general, we must be far-sighted. China's economy is once again at a critical moment in overcoming difficulties, and the problems are the growing pains in the development process. As long as we strengthen our confidence and rise to the challenges, we will be able to turn those challenges into opportunities, and that is the basic logic of China's economic development.