As We Head Into The Fourth Quarter, How Can We Strengthen Policies To Stabilize Growth?
A few days ago, the National Development and Reform Commission held a symposium on some local economic situations to clearly coordinate and coordinate key tasks for this year and next, to expand domestic demand, strengthen entities, prevent risks, and protect people's livelihood. The Ministry of Commerce revealed that it is promoting the issuance of guidance to promote the high-quality development of the catering industry, accelerating the promotion of the consumption of automobiles, home furnishings, and electronic products, as well as the implementation of policies and measures recently introduced to promote the high-quality development of the automotive aftermarket.
The central government will issue an additional 1,000 billion yuan in government bonds in the fourth quarter of this year to support post-disaster recovery and reconstruction and improve disaster prevention, reduction and relief capabilities, sending a strong signal to stabilize growth. The Ministry of Water Resources and the Ministry of Transport have recently clarified the key tasks for stabilizing investment in the next stage. As investment stabilization policies continue to be stepped up and early policies continue to be effective, there is a high probability that the growth rate of fixed asset investment will pick up in the fourth quarter.
In order to cooperate with the increase in the issuance of national debt, monetary policy also needs to be further strengthened. Zhong Zhengsheng, chief economist of Ping An Securities, said that if the 1 trillion special government bonds are issued in a market-oriented manner, monetary policy may need to cooperate with the total amount operation. In order to maintain reasonable and sufficient liquidity, monetary policy must increase liquidity injection and consider appropriate "reductions in reserve requirements" in a timely manner. Monetary policy is also necessary to push real interest rates down further, and the possibility of "cutting interest rates" at an appropriate time to coordinate with fiscal efforts cannot be ruled out. This will also help alleviate the potential crowding-out effect of public investment on private sector investment.
Policies to promote consumption still need to be further strengthened
Zheng Shanjie, director of the National Development and Reform Commission, recently chaired a symposium on some local economic situations and had in-depth discussions and exchanges with the main responsible comrades of the development and reform commissions in Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia, Jiangsu, Guizhou, Shaanxi and other places to listen to and understand the economic situation in various places. , the difficult problems faced and suggestions for the national economic work next year.
Zheng Shanjie pointed out that since the beginning of this year, the economic operation has continued to recover, but we must also look at the difficult problems in the economic operation soberly, coordinate and coordinate the key tasks of this year and next, plan early and implement them, expand domestic demand, strengthen the entity, and prevent risks , protect people's livelihood, promote the continued improvement of the economic structure, continue to strengthen the growth momentum, continue to improve the development trend, and complete various economic and social development goals and tasks throughout the year with high quality.
Data recently released by the National Bureau of Statistics shows that my country's GDP increased by 5.2% year-on-year in the first three quarters, of which GDP in the third quarter increased by 4.9% year-on-year and 1.3% month-on-month. The continued recovery of the national economy has become more obvious, and positive changes have occurred in many fields. However, the contradiction between the increasingly complex external environment and insufficient internal demand in economic operation still exists.
Liu Yuanchun, president of Shanghai University of Finance and Economics, said that various data in the third quarter show that the economy is improving at the margin, and some supporting forces for sustained recovery have begun to emerge, especially new forces have begun to gather, indicating that China's economic recovery process will be further consolidated.
He believes that from the perspective of economic recovery strength, firstly, as the real estate market gradually bottoms out, the rebound strength may accelerate in the future; secondly, with the full implementation of local debt and the gradual implementation of a package of debt reduction plans, active fiscal policies Will return. Combined with the effects of a series of previous policies, the economy will continue to stabilize in the fourth quarter, and the quarter-on-quarter growth rate is expected to further increase to close to 2%.
Consumption remains the primary engine of economic growth. Data released by the National Bureau of Statistics showed that the total retail sales of consumer goods in September was 3.98 trillion yuan, a year-on-year increase of 5.5%. The growth rate was 0.9 percentage points faster than that in August, showing a continued recovery trend. In the first three quarters, the total retail sales of consumer goods reached 34.2 trillion yuan, a year-on-year increase of 6.8%. In the third quarter of 2023, the contribution rate of final consumption expenditure to economic growth was as high as 94.8%.
A report recently released by the China Macroeconomic Forum (CMF) pointed out that judging from the situation in the first three quarters, it should not be difficult to achieve annual macroeconomic targets. However, there are still some hidden dangers behind economic growth and issues that require long-term attention. It is difficult to sustain the situation where final consumption contributes 80% or even more than 90% of GDP growth, especially the overshooting expansion of service consumption after the epidemic and the consumption growth it leads, as well as the significant increase in consumption propensity when the balance sheet has not been fully repaired. , sustainability is questionable.
Policies to promote consumption still need to be further strengthened. Ministry of Commerce spokesperson He Yadong recently stated that entering the fourth quarter, the Ministry of Commerce will follow the overall arrangement of the "Consumption Boost Year" and take multiple measures to promote the continued recovery and expansion of consumption, accelerate the promotion of consumption of automobiles, home furnishings, and electronic products, as well as the recently introduced Policies and measures such as promoting the high-quality development of the automotive aftermarket will be effective and better leverage the fundamental role of consumption in driving economic growth.
Zhu Guangyao, head of the Department of Trade in Services and Commercial Services of the Ministry of Commerce, revealed at the State Council’s regular policy briefing on the 25th that the catering industry is an important area that promotes consumption, benefits people’s livelihood, and stabilizes employment. Promoting high-quality development of the catering industry is for the better It is of great significance to meet the people's needs for a better life. The Ministry of Commerce is promoting the issuance of guidance to promote the high-quality development of the catering industry. It will accelerate the high-quality development of the catering industry in terms of improving service quality, innovating consumption scenarios, cultivating development momentum, promoting catering culture, and promoting green and safe development.
It is worth mentioning that data released by the National Bureau of Statistics show that in the first three quarters, the per capita disposable income of residents across the country was 29,398 yuan, a nominal increase of 6.3% over the same period last year. After deducting price factors, the real increase was 5.9%; per capita consumption expenditure accounted for 29,398 yuan. The proportion of disposable income was 66.4%, a significant increase from 64.7% in the same period last year.
Song Xiangqing, deputy dean of the Institute of Government Management at Beijing Normal University, believes that the stamina of consumption recovery mainly comes from the continued positive development trend of the macro economy, the accelerated recovery of the real industry, and the resulting actual feelings of residents' income growth and continued income growth. future expectations. All these will effectively enhance residents' consumer confidence, thereby driving the consumer market to further pick up in the fourth quarter, thereby driving economic development into a virtuous cycle.