Experts explore high-quality growth in post-pandemic era
A technician checks the power supply lines at a heating station with clean energy in Weihai, east China's Shandong Province, Nov. 12. Shandong launched a campaign to promote a shift from coal to electricity for 358,400 households during its heating season in 2020. Photo: Zhu Zheng/XINHUA
Experts shed light on China's economy in the post-pandemic era, at a webinar in late October.
The webinar also celebrated the 65th anniversary of the Economic Research Journal run by the Institute of Economics at the Chinese Academy of Social Sciences (CASS).
Zhang Zhuoyuan, former director of the Institute of Economics at CASS, reviewed the establishment and development of the Economic Research Journal. He said that for 65 years, the journal has been closely focusing on the reality of socialist economic development, publishing excellent research results in economics, and promoting discussions on hot economic issues.
The conference also released the China Economic Report 2020. Huang Qunhui, director of the Institute of Economics at CASS, said that this is the first annual report written by the institute on China's economy. It examines China's high-quality economic development, especially the country's economic growth during the 14th Five-Year Plan period (2021–2025), in the context of the profound changes unseen in a century.
With regard to the global economic recovery in the post-pandemic era, a major consensus among academics is that it presents a clear K-shaped curve, said Cai Fang, CASS vice president. Within an economy, one group will quickly recover from the pandemic’s economic impact and present the upward trend of the upper half of the K; while another group will fall into a long-term economic dilemma and present the downward trend of the lower half of the K, Cai explained. A case of the K-shaped economic recovery is the United States. The pandemic has exacerbated the polarization between the rich and the poor in the country.
China's economy took the lead in recovering from the major test of the pandemic, with its economic recovery approximating a V-shaped curve. However, we must also realize that the process of economic recovery is somewhat unbalanced. This is because changes in the demographic structure have brought about a reduction in the labor force and a slowdown in economic growth. At this stage, the continuous improvement of productivity will inevitably require the reallocation of resources, which will lead to the survival of the fittest among enterprises, which is labeled "creative destruction" in economics.
The creative destruction mechanism must be supported by a sound social policy, Cai noted. During the 14th Five-Year Plan period, China needs to further improve the social security mechanism, raise the level of basic public services, increase redistribution, and avoid the subsequent impact of the pandemic on certain groups. This is the key to China's smooth transition from the middle-income stage to the high-income stage.
China is now pursuing "dual circulation," a new development pattern that smooths domestic circulation and lets domestic and international circulations reinforce each other.
Gao Peiyong, CASS vice president, said that the new pattern has been proposed because the certainty of domestic circulation is needed to hedge against the uncertainty of international circulation, as China's industrial and supply chains have been affected by the pandemic. In other words, the new development pattern is a strategic deployment proposed in light of the threats to China's economic security. The new development pattern highlights the word "safety," Gao noted, adding that the soul and core of the new development pattern lies in overall planning for development and security.
To accelerate the new development pattern, it is necessary to stabilize and expand household consumption and promote the release of consumption potential, said Ma Jiantang, deputy director of the Development Research Center of the State Council. This is an important way to smooth the domestic circulation and make use of China's super-large-scale market during the 14th Five-Year Plan period.
Specific measures include implementing a plan to expand the size of middle-income groups, and substantially increasing the incomes of low- and middle-income groups; adjusting income distribution as a strategic goal to improve the consumption ability of low-income groups; and accelerating reform of the public service sector, while constantly optimizing the social environment, Ma said.
To develop the new development pattern, we must pay attention to supply-side structural reforms, said Fan Gang, president of the China Development Institute. It is also important to enhance independent innovation capabilities, and break through key core technologies as soon as possible to lay the foundation for smoothing the domestic circulation.
Edited by JIANG HONG