How does a symposium with Chinese premier feel like
"Our participation in the meeting is mainly to talk about problems, to propose countermeasures, not to talk about achievements."
Chinese Premier Li Keqiang, who is also a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, presided over a symposium on April 7 to consult with economists and entrepreneurs on their opinions, analysis, and suggestions on the next step of economic work.
At the meeting, a number of experts, including 管涛 Dr. Guan Tao, 中银证券全球首席经济学家 Global Chief Economist of Bank of China International（BOCI） Securities and former head of the international payments department at the State Administration of Foreign Exchange, spoke and expressed their views on the economy, and made suggestions on implementing macro policies, promoting logistics and transport, ensuring farming supplies, and boosting enterprise innovation.
Below is an interview of Dr. Guan by 每日经济新闻 the National Business Daily (NBD) on what he has to say about this symposium. Ginger River thinks this interview is quite remarkable. It sheds direct light on the fact-finding and decision-making processes of China's top leadership, in which candid consultation with market players is a key component. It also shows that top leadership has a good grasp of the on-the-ground situation, especially during the tough times recently. Ginger River believes that policies that are more accommodating to the economy may be introduced in the near future.
Dr. Guan Tao attends the symposium on April 7 (photo by CCTV 央视新闻联播)
"It's not about going over achievements."
NBD: What are your feelings to share about participating in this symposium?
Dr. Guan: First, we had a thorough discussion during this symposium. As you know, 季度经济形势座谈会 the quarterly economic situation symposium has become an important platform for leaders to communicate with experts and entrepreneurs to understand realities in macro-economic and business operations.
More than 1/3 of the symposium was about reports from experts and businesses. It was followed by interactions and dialogues between the premier and the experts and entrepreneurs that took up the next 1/3, in which he asked many follow-up questions. It was then concluded by summary remarks by the premier.
Secondly, the premier has a good grasp of information on both macro and micro levels from many different channels, including symposiums [like this one], and routine research, such as inspection tours of enterprises.
My deepest impression is that, when communicating with us and the representatives of entrepreneurs in the relevant industry, the premier was familiar with the specific problems and difficulties of the industry, and understood some of the key issues. People may worry that the leadership has failed to understand the specifics of the current situation, but in fact, he has a very deep understanding of the situation in all walks of life.
Third, the relevant departments have actually grasped some information of the situations, and have been studying the roll-out of specific measures to address them. The press release mentioned that the premier stressed that introduced policies should produce effects early on and be intensified when appropriate. The ones that have been introduced should be put in place as soon as possible, and those that are clearly intended to be launched should be brought forward as far as possible, and new plans should be studied and prepared at the same time.
Now some sudden factors are beyond expectations, the relevant departments are actively studying specific solutions. In fact, the State Council executive meetings have introduced specific measures, which are precisely in response to the new situation and changes in the past month or two.
The press release about the symposium also mentioned a variety of issues, such as guaranteeing the orderly operations of major transport networks and ports, studying targeted measures to serve truck drivers, alleviate the difficulties of freight operators and reduce logistics costs. In fact, [issues mentioned] targeted the emerging problems in the Yangtze River Delta, the Pearl River Delta, and land transport.
The press release also mentioned that we should not miss the farming season to ensure good spring production, and do a good job to ensure the price stability of agricultural products, especially special varieties.
In fact, senior leaders have already been informed of many problems, and are already studying the introduction of measures. If food is not guaranteed, it is a big risk. So the so-called stabilizing growth is mainly about stabilizing employment, stabilizing prices, and so on. Stabilizing prices is to stabilize food prices, energy prices, etc.
Fourth, there was also a very deep feeling that the primer encouraged everyone to speak the truth. Our participation in the meeting is mainly to talk about problems, to propose countermeasures, not to talk about achievements.
Helping the government make scientific decisions
NBD: The premier's symposium invited 市场机构专家 experts from market players to participate. What role do you think experts from market players can play in China's economic operation?
Dr. Guan: Firstly, the internal research institutions of government departments mainly serve their own departments, while the research of market players is oriented to the public and has obvious objective and neutral properties, so they are positioned differently.
Secondly, market-oriented institutions can absorb high-quality talents according to incentives and constraints of the market mechanism. Market-based institutions need to have experts who either have market influence and are recognized in the market or have policy influence and unique insights into the policy. In this way, the institution will reward them with considerable market-based compensation. But it does not mean that there is no quality talent in the government sector. In fact, many of them [working in the government sector] have 家国情怀 a strong sense of devotion to family and country.
Third, market players are close to the market and know more about the laws and specifics of market operation or about a particular segment, and many non-governmental experts have been doing special research in a niche area for a long time. The government's wide openness [to the experts] can help it make better decisions.
Fourth, at the front-line operational level, market players can provide feedback on whether a certain policy is practical and feasible, and how much positive and negative impact it has on the industry, thus providing assistance to policy formulation from the other side. Government departments have the advantage of knowing more about the policy, having a more comprehensive knowledge of the situation, and having a higher standpoint. However, since they are not in contact with specific businesses, they can seek the opinions of experts from market players in the operational aspect.
Therefore, the research of market player experts is a supplement, not to say that it can replace the decision-making research of government departments, but to help the government weigh the pros and cons from more dimensions and make more cost-effective policy arrangements.
Government departments and market players have their own strengths and weaknesses in research, and listening to both will help the government make scientific decisions. I believe that research of market players will play an increasingly important role.
NBD: You have served in government departments for many years and studied the formulation of national foreign exchange policy. How do you understand the policy-making process?
Dr. Guan: Many policies are 多目标动态均衡 multi-objective with dynamic equilibrium, not only considering the problems encountered unilaterally or in a single sector, but also considering the macro needs of the country. This requires having a variety of information, such as feedback from market players to make a judgment, to minimize the probability of policy errors and reduce the cost of policy implementation.
Every policy has its advantages and disadvantages, and policymaking is about weighing the pros and cons and making trade-offs. It is difficult to imagine a policy introduced to the satisfaction of all. [Policymakers] listening to the views of market players may help them grasp the costs and benefits more accurately.
During the market consultation stage, if market situations have presented certain possible outcomes [of a policy], but on balance, pros outweigh cons, which is regarded as the costs to be paid for policy implementation, [then a policy is implemented]. [During implementation, as long as] the outcome is within expectation, then the policy has to be persistent and should avoid being kidnapped by public opinion. But if the situation exceeds expectations, then we need to adjust the pace and magnitude of policy in a timely fashion.
The press release again stressed that when formulating and implementing policies, all types of enterprises should be treated equally, with their voices heard and market expectations anchored. (Enditem)
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Disclaimer: Analysis contained in this newsletter reflects the personal views of Ginger River, not those of Xinhua.
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