Yu Bin: 2015 China's economic Trends and macro-policy analysis

2014 Zhongguancun Large Data day on December 11, 2014 in Zhongguancun, the General Assembly to "aggregate data assets, promote industrial innovation" as the theme, to explore data asset management and transformation, large data depth technology and industry data application innovation and ecological system construction and so on key issues. The Conference also carries on the question of the demand and practice of the departments in charge of the government, the finance, the operators and so on to realize the path of transformation and industry innovation through the management and operation of data assets.

In the afternoon of the government @big Data Forum, the State Council Development Research Center of Macroeconomic Research minister Yu Bin brought "2015 China's economic Trends and macro-policy analysis." He said that in the first transition to a new normal, the economic operation will continue to be under pressure until the new equilibrium growth point has been played out. Economic growth will remain in decline until the equilibrium level is reached. From the development of large-scale catch-up countries, the transition period in the growth phase is the end of a phase, a new phase is coming, in this process, almost all of the systemic crisis, no exception.

The following is the full text of Yu Bin's speech:

Yu Bin: Ladies and gentlemen, good afternoon, first of all, very happy to participate in today's National Research think-tank Forum, briefly on the new state of China's economy to talk about my views, since the first time this May, general secretary of the new normal use of the concept of a lot of academic discussion, a wide range of views of Let's talk a little bit about my understanding of the new normal.

China's economy grew 7.7% last year, a 7.4% increase in the first three quarters of the year, roughly the same level as the year. If we look at the state of China's economy for a longer period of time, in fact it has been 11 consecutive quarters in the three quarter since 2012, and in this 11 consecutive quarter the highest level of China's growth is 7.9%, the lowest level is 7.3%, That is, in the 11 consecutive quarters China's economic growth is in a very narrow range in the transition. From this chart we can draw the following two basic conclusions, the first Chinese economy at this stage, the growth momentum is obviously insufficient, in the past China's economic growth is often above 10% levels, in the past nearly three years of time, has never been higher than 8%. So at this stage, compared with the past, the momentum of China's economic growth has dropped markedly.

The second basic conclusion is that the policy benefit of government macro-control is obviously weakened, in the 11 consecutive quarters, the government has, in fact, taken three steady-growth policy measures, but the result is the same, a quarterly Perco rebound, each step on the accelerator, economic growth rebounded a quarter, In the second quarter, immediately again in the decline of the channel, the Chinese economy is why there are two major changes in the above? How should we look at the current state of China's economic operation and what kind of judgments and predictions will be given to the future? I want to give an analysis with a new normal.

1978 to 2012 is the 35 since the reform and opening-up, in these 35 years the average Chinese growth of 9.8%, close to 10%, 2002-2011 is Twelve-Five planning five years, in this five years, China's economic growth is expected to target 7% people, what is the actual results? China's economic growth in 2011 was 9.3%, and we expect growth to be 1.4% this year, and we expect growth to be 7% next year. At the same time, the National people into the key period of a well-off society, the party's 18 major reports pointed out that by 2020 than 2010 doubled. So, Twelve-Five per 7.8% of the growth we have to achieve the goal of doubling, Thirteen-Five of these five years.

The new normal is the equilibrium state after the economic operation crosses to the growth rate and into the middle and high speed growth stage.

Therefore, the so-called new normal is that, when the number of expansion of space no longer exist, the basic path of our economic development should be transferred to quality promotion as the main line, which is its first basic characteristics.

The second is the reconfiguration of resources from department to department. This needs to be explained. In the past we have shifted the bulk of the labour force from inefficient agricultural sectors to the efficient non-agricultural sector, which is the process of reconfiguring a typical resource between departments. In the future it should be an opportunity to reconfigure resources within the department. What do you want when there is a huge overcapacity in an industry? Should be in the market competition merger and reorganization, in the competition of the fittest, in the competition to continuously eliminate the internal inefficient enterprises, so that the production and market more transfer to the head of efficient enterprises, so as to improve the concentration of industry, improve the competitiveness of industry, improve the efficiency of industry, so the second feature, I'm talking about the redeployment of resources from departmental to departmental, to the redeployment of resources within the Department, in the past, we can see that the good enterprises are growing at a rate of 20% and 50% each year, and the poor companies are still growing at a rate of 10%, but at this stage, The development of an enterprise often means the death of other enterprises. Or the growth of some enterprises is at the expense of the death of others, which is the reconfiguration of resources within the department.

The third is the change of speed benefit to quality benefit, we observe the course of the past more than 30 years, as long as the economic growth of more than 10%, all of our industries are profitable, Central local revenue growth can reach 20%, or even more than 30%, but once the economic growth has declined to less than 8%, For example, the Asian financial crisis in the 90 's and the international financial crisis of this century, when the economic growth is below 8%, all of our industries will lose, central and local government finance will be negative, we call it the speed-efficiency model. In the future, China's economic growth will generally remain stable at around 7% levels, if the profit model is still a speed-efficient enterprise, obviously this is unsustainable, when the economic growth rate at a lower level, we have to pass the vision of quality benefits to achieve business can be profitable, financial sustainability, risk can be prevented, A range of goals for employment improvement.

Of course, from this picture we give the new normal also can give another analysis and judgment, why? We looked at this picture, and when we first started taking the economy off, we are very backward, we have a big gap with developed countries, you just go abroad to take a walk to see, you know what you should do when you come back, when we are very backward, in fact, there are a lot of economic life is a decisive thing, We need to do it. We have to build more high-rise buildings and build more airports, which is the time we need to complete in economic life, and we play the role of government more. What role does the government have? is a person a business can not complete the task, the government can use the resources of the whole community to complete this task, is to concentrate resources to do big things. When we are very backward, compared with developed countries, we have a large gap, economic life is faced with a large number of decisive role we need to complete the time, we more play the role of government, can speed up the catch-up process can reduce the shortest time, you can achieve the development of extrusion type, is said to complete the same task developed countries need 20 years 30 years 50 years, but we China can be compressed in 10 years to complete, because in the past, economic development is more to play the role of government, the market in the allocation of resources is only a basic or reference role.

Well, now the question is, when we go through the past 30 years of rapid catch-up, we compared with developed countries, the gap is significantly reduced, you pull Beijing to the international metropolis to compare, there is no obvious difference, many of our industries have reached the global technological forefront, at this time, There are a lot of uncertain risks in economic life, so in the same field there are 10 companies in the competition, then who will be eliminated who will grow? This is not the government, said around a product, we have 10 different innovative ideas, then what kind of innovative ideas can be successful, and the market recognized it? Again, this is not the government's decision, it needs to be tested by the market, so when we have been chasing the past more than 30 years, when many of our industries have reached the forefront of the world's technology, at this time, we should be more to play the role of the market, not the role of the government. So plenary decided that the role of the market in the allocation of resources from the basic role of the past, the rise as a decisive role. Plenary said so, so that the market in the allocation of resources play a decisive role or better play the role of government. Some entrepreneurs asked me, the market to play a decisive role still better play the role of the Government, as a business whether we listen to the market or listen to the government? In fact, Plenary decided to say that it is better to play the role of the Government, not more, in the economic life, I think to reduce the government's blind intervention in economic work, blind intervention in the market, in many cases the government does not play a role is very good to play a role.

Look at this watch, this is a table I just made recently, this year, the direct bank of China has surpassed the U.S. as the world's largest economy, if we use the exchange rate for the 2013, China's total economy is equivalent to 55% of the United States, China's per capita GDP is equivalent to one-eighth of the United States, is secondary, We say that China is now in the midst of a critical period of structural transfer, how to adjust the structure, how to turn the way, we simply look at the comparison between China and the United States can draw the conclusion that consumption rate is the proportion of GDP, the final consumption of two parts, one is the government consumption is a resident consumption, we only look at the final consumption rate of residents, China has a huge difference from the United States, which was also the last time the State Council's executive meeting adopted three major measures to encourage consumption in six major sectors to boost consumption's role in boosting growth. China is now the fastest growing consumer market in the world, in the future, China will certainly become the world's largest consumer market, which is of course the need to implement the so-called three measures put forward by the State Council executive Conference is to reform income distribution to improve labor remuneration, so that people can consume, have the ability to consume, the second is to improve the social security system, Let the people dare to spend, the third is to improve the consumption order, so that people do not let the overseas to buy things, in China he is willing to buy things, good, this is the first aspect of our significant gap.

Third-generation ratio is that the tertiary industry to increase the value of the proportion of GDP, China compared to the United States, the gap is very clear. Although the value added of China's services in 2013 accounted for more than secondary GDP, we have a big gap compared with the US. If only in the field of industrial manufacturing, we face serious overcapacity, in the service sector or the life of the service industry have a huge increase in space, the third indicator is the agricultural labor ratio, is engaged in agricultural production of the labor force accounted for the proportion of the current agricultural labor force in China One-third, We have invested one-third of the labor force in agricultural production, creating an increase of less than 10% of the total GDP, the low income level of agricultural farmers, the widening gap between urban and rural areas, which is inevitable. When we invested one-third of our workforce in agricultural production, China is still the world's largest importer of agricultural products, the United States has invested 1.6% of the labor force, the United States is the world's largest exporter of agricultural products, in agriculture, in fact, we are from the machine, modernization, we achieve the scale of machine efficiency is very remote, We look at this picture, the National Bureau of Statistics announced yesterday the CPI, PPI, blue This picture is the CPI, 1 to October this year, the increase is 1.0%,ppi October negative growth of 2.7%, CPI and PPI3.8 a percentage gap, on the one hand, the factory price of industrial products to October is 33 consecutive months of negative growth, facing severe deflation, but on the other hand, in the consumer goods sector, we are facing 2% to 3% of inflationary pressure. Why? You see the fluctuations over the past two years are generally consistent, but now there are obvious deviations, and I think the problem is in agriculture. When Labor supply and demand changed and labor costs rose sharply, in the industrial field, the machine was explored as early as 10 years ago, and large-scale equipment renovation was used to reduce labor costs, but in the agricultural sector, until now, is still a small family-oriented production mainly dependent on labor input, when the labor costs have risen sharply, the production costs of agricultural products, agricultural products, and because the weight of food in the CPI more than 30%, so when the price of goods continue to decline, But in the consumer goods area we still face inflation, this is also the last one months, Plenary encouraged the industrial and commercial capital to go to the countryside, engaged in the farming industry suitable for enterprise management, to change the current family-owned small-scale operation mainly rely on the labor force input mode of production. Many enterprises have no way out in the industrial field, in fact, there are huge development opportunities in the field of agriculture.

Well, give a summary of the following two aspects. In the process of the first transition to a new normal, economic operation will continue to be under pressure until the new equilibrium growth point has been played out. Before the equilibrium level is reached, economic growth will always be in the process of decline, so this year's economic growth is facing a lot of downward pressure, next year is no exception, is the same, we expect the growth phase of the middle and high income should be lower than the current one hundred points, only after the 1% fall is completed, China's economy is likely to achieve stability. In the macro policy we need to stick to the bottom line, the so-called bottom line is not a systemic risk, this is the bottom line, on the premise of vigilance against short-term shocks, the economic fluctuations in the small range, in 2015 China has the conditions to fight for about 7% growth rate.

From the development of large-scale catch-up countries, the transition period in the growth phase is the end of a phase, a new phase is coming, in this process, almost all of the systemic crisis, no exception. Are we going to have a systemic crisis, we think that in essence, both the economic crisis and the institutional reform can achieve the same result, that is, it will trigger or promote the development of economic structure changes to adapt to the new environment, can achieve the same results. But the economic crisis it is a market error correction, its impact or shock of the intensity of a large, costly, but institutional reform, it is in the risk awareness of the active adjustment, we know where we are in the field of problems, what we need to make adjustments, how to adjust, But the problem is that it's hard to reach consensus and implement it, a lot of people ask me, Plenary made a decision for a year, we did not observe the major reform, we said that the reform into the deep water period is to say that it involves deep-seated labor, it entered a critical period is said, the past easy to change all the changes, leaving the hard to change are the tough, This reform also involves the adjustment of interests, that is, in the process of adjustment, some of the interests will inevitably be lost, who is willing to lose their own interests? When the reform enters into the crucial period to enter the deep water period actual benefit adjustment, reached the consensus and pays the implementation to be more difficult. Therefore, a new round of reform in China has actually opened a race for reform and crisis, I think plenary the decision to deepen the reform comprehensively and put forward concrete reform directions and measures in a series of important fields, if we can make breakthrough progress as soon as possible in the reform of some critical areas and key links, I think this will be successful in avoiding systemic economic and financial crises. Conversely, if we fail to make breakthroughs in key reforms in some major areas, we may need a systemic crisis.

In both of these, I am confident of reform and I believe that in this game, reform will be able to achieve a breakthrough and win, so that we can maintain China's economy at 7% or even relatively low level of stability, so that our catch-up process can be sustained, not interrupted. The above is my basic understanding of the current situation of China's economy can also be said to be the new normal, I have just said that the academic community is not conclusive, a lot of discussion, if we watch the news this evening, I believe that the central Economic Work Conference may give some new understanding of the new normal. The above is my personal point of view. Not necessarily. For reference only. Thank you.

(Responsible editor: Mengyishan)