Stable Growth Policies Effective, Annual Economic Target Achievable
Entering the fourth quarter, the annual performance of China's economy and how to achieve the expected growth target for the whole year have become the focus of attention. The recent meeting of the Political Bureau of the CPC Central Committee also emphasized the need to "strive to complete the annual economic and social development goals and tasks".
Maintaining a reasonable growth rate is very important for China's economic development. Since the 20th National Congress of the Communist Party of China, the policy level has repeatedly emphasized "promoting the effective improvement of the economy in quality and reasonable growth in quantity". Recently, the Governor of the People's Bank of China, Pan Gongsheng, also stated that China's huge economic volume needs to maintain a reasonable economic growth rate to drive employment and increase residents' income. In addition, reasonable economic growth is conducive to the transformation and upgrading of China's economic structure and to preventing and resolving risks in key areas.
This year's "Government Work Report" proposed that the main expected targets include a GDP growth of about 5%. Looking at the progress, China's GDP grew by 4.8% year-on-year in the first three quarters, with the overall economic operation being stable and basically in line with the expected targets. At present, the economic growth rate in the fourth quarter has become a key link in determining the annual economic growth rate.
The author believes that with the continuous implementation and effectiveness of existing and incremental policies, the vitality and momentum of the macro economy in the fourth quarter are expected to be further released, helping consumption, investment, and exports, the three "horses" that drive economic growth, to move forward steadily, thereby supporting the smooth achievement of the expected annual growth target.
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Firstly, consumption is expected to continue to "play a major role" in stabilizing the economy.
In the first three quarters of this year, the contribution rate of final consumption expenditure to China's economic growth was 49.9%, driving GDP growth by 2.4 percentage points. Final consumption is a lasting driving force for economic growth, and the importance of expanding consumption is undoubted. Entering the fourth quarter, a variety of policies to promote consumption have been introduced, which are expected to continue to stimulate consumption potential and promote the fundamental role of consumption in driving macroeconomic growth.
On the one hand, since the fourth quarter, various regions have intensified efforts to promote consumption, promoting the exchange of consumer goods for the old, and the role of promoting consumption has been continuously released. In addition, the launch of e-commerce promotion activities such as "Double 11" can further boost residents' consumption. In fact, the adaptability of the supply side in China's economic structure is very strong, and it can find the connection point between policy and market at the first time and evolve into production capacity; on the demand side, consumers' acceptance of innovative things is very strong, which has laid a solid foundation for the rapid transformation from innovative production capacity to innovative consumption.
On the other hand, the package of policies to stabilize growth recently released is also conducive to promoting consumption. Among them, the reduction of LPR (loan market报价 interest rate) and the interest rate of existing housing loans has reduced the burden of residents' debt, which is conducive to releasing consumption potential. From a more macro perspective, policies related to stabilizing the stock market and the real estate market are also conducive to improving residents' consumption expectations.
Secondly, government investment is expected to continue to lead effective investment.
In the first three quarters of this year, investment grew steadily, with the total capital formation contributing 26.3% to economic growth, driving GDP growth by 1.3 percentage points.Investment, especially significant project investment, has always played a very important role in China's economic growth. Objectively speaking, real estate development investment has declined within the year and has dragged down the performance of some indicators. However, as the effects of macro policies continue to be released, the construction of "two heavy" (the implementation of national major strategic initiatives and the construction of safety capabilities in key areas) is accelerating, and large-scale equipment updates are being steadily promoted, effectively supporting the stability of the investment scale.
I once read an interesting metaphor - major projects are like the crust of a sesame seed cake, and the derived market demand is like countless sesame seeds, which need each other and can be combined into a delicious cake that can be either salty or sweet.
Entering the fourth quarter, government investment is expected to continue to drive investment. Recently, the Political Bureau of the CPC Central Committee emphasized the need to issue and use long-term special national bonds and local government special bonds well, to better play the leading role of government investment. The Minister of Finance, Lan Fuan, also clearly stated at a press conference that the actual funds available for increasing government investment this year have increased significantly compared to last year. In addition, the relevant person in charge of the National Development and Reform Commission also mentioned recently that a batch of incremental policy measures will continue to be introduced and implemented, including maximizing the expansion of the fields for special bonds. These measures will continue to play the leading role of government bonds, drive effective investment, and strongly promote investment growth.
Third, exports are expected to further enhance the resilience of economic development.
In the first three quarters, the contribution rate of China's net exports of goods and services to economic growth was 23.8%, driving GDP growth by 1.1 percentage points.
Opening up to the outside world is the endowment of China's economy, and China's production capacity, which has both "beauty and research value," occupies an important position in the global industrial chain and supply chain, and is also an important manifestation of the resilience of China's economic development. Entering the fourth quarter, a series of policies introduced by the country, including tax cuts and fee reductions, financial support, and innovation incentives, are expected to continue to stimulate the development vitality of private enterprises and foreign trade enterprises, enhance their competitiveness in the international market, and promote exports.
In addition, with the transformation and upgrading of China's economic structure, the new economic momentum represented by new energy vehicles, lithium batteries, and photovoltaic products, known as the "new three," still maintains strong international competitiveness and is expected to continue to drive exports.
The movement of a great roc is not due to the lightness of a single feather; the speed of a fine steed is not due to the power of a single hoof. This year, China has accelerated the adjustment and transformation of its economic structure, and the policy level has timely strengthened regulation and emphasized the consistency of macro policies, keeping the economic growth rate within a reasonable range. At present, positive factors for promoting economic development continue to gather and accumulate, and these favorable factors will continue to promote the economy to move upwards, the structure to be optimized, and development to be better, striving to support the achievement of this year's expected economic growth target.
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