SCIO briefing on China's economy in January and February

The State Council Information Office (SCIO) held a press conference in Beijing on Monday to provide information on China's economic performance in January and February. March 19, 2020

Phoenix TV:

Director General Mao, you just mentioned that we should still strive to achieve annual development goals and tasks. What are the specific goals and tasks? Were you referring to the targets of doubling 2010 GDP and per capita income by 2020? Do you think that considering the current situation, it would be advisable to reduce the economic growth target for this year? Thank you.

Mao Shengyong:

Building a moderately prosperous society in all respects was the first of the Two Centenary Goals set at the 18th CPC National Congress. It remains a solemn commitment made by our Party and must be realized. However, the concept of a moderately prosperous society in all respects has profound connotations. According to my personal understanding, the most important thing now is still resolutely winning the battle against poverty. General Secretary Xi Jinping recently made an important speech which we should earnestly study. He mentioned ensuring that the current 5.51 million poor people are lifted out of poverty according to existing standards and that poverty relief is a quality goal that should satisfy public demand and withstand tests of history and practice. Second, it is now very important to continue to consolidate gains in epidemic prevention and control. We should accelerate the resumption of production and living order and strive to return economic operation to a track of healthy development. All policies, including fiscal, monetary and employment policies, should serve these development goals.

As for annual development goals, we still need to reference the Report on the Work of the Government at the "two sessions." Once the goals are set, all people of the country will strive to achieve them. Thank you.

China Media Group:

We noticed that investment in fixed assets is constantly decreasing and that the sales area and volume of commercial housing are also declining. It was recently announced that housing price growth rates in 70 large and medium-sized cities in February are steadily falling. What is your opinion of the drops? Will the housing market stay cold? How will this affect the overall national economy? Thank you.

Mao Shengyong:

Thank you for your question. On real estate, I think the policy is very clear. First, the prohibitions on real estate speculation have not changed. In recent years, we have constantly strengthened and improved real estate regulation and control policies, implemented differentiated policies for various cities and enhanced key responsibilities of cities. In past few years, the real estate market has remained generally stable, especially in terms of stabilization of land prices, expectations and housing prices. 

Second, it is still clear that development policy on real estate should promote high-quality development. It is not the realm for short-term stimulus policy.

Third, regarding investment, China's perspective of areas and space for investment is quite large and includes manufacturing, infrastructure and other areas. Next, we should continue to increase policy support for investment. For example, recently, 23 departments issued suggestions and measures to improve consumption quality and expand consumption capacity. We also need to increase the effectiveness of investment which includes investment in relatively weak areas, promotion of industrial upgrading and strengthening areas of weakness in public service including the emergency response system. The areas and space for investment are huge. Our next step is not only to strengthen effective investment, but also to improve consumption quality and expand consumption capacity. We should make better efforts at the intersection of promoting consumption and expanding investment to maintain the overall stability of our economic operations. Thank you.


South China Morning Post:

Recently, new infrastructure such as 5G and the industrial internet has become a hotly discussed topic, which is expected to become the driving force for economic growth in the rest of the year. Does the National Bureau of Statistics have a comment on this? Is there a forecast for the scale of investment in new infrastructure? Is it able to keep China's economy in a reasonable range? Thank you.

Mao Shengyong:

Thank you. We have seen many recent online discussions on this matter. The core of this issue is the basic orientation of next-step macro policy. To support epidemic prevention and control, including supporting affected enterprises, we recently introduced a series of policies and measures that have already achieved favorable outcomes. To better hedge against the impact of the epidemic including external risks and challenges, we will increase the adjustment of macro policies in the next step. For active fiscal policy, we should seek greater effectiveness. For prudent monetary policy, we should be more flexible and appropriate. We should further strengthen the employment priority policy, which is a basic policy orientation. From the perspective of fiscal policy, we need to further reduce the burdens on enterprises and promote tax cuts and fee reductions. Over the past two years, we have made great efforts to reduce taxes and fees. This year, we will continue these efforts including the reduction of fees, reduction of energy and gas costs and other areas. The monetary policy has the same goal. To provide targeted assistances for enterprises, we should maintain reasonable and sufficient liquidity and strive to reduce loan costs.

Another perspective is domestic and external demand. As of domestic demand, we need to expand consumer demand and investment demand. The two "wheels" should align with each other. There is still much space for investment, including many weak areas that require industrial upgrading and technological progress and some inadequate areas in public service. All of these need greater efforts in the future. We should work hard at the intersection of expanding consumption and investment to achieve better results. If we can better leverage private investment, the results will be better. Therefore, we believe that expansion of investment and consumption should happen simultaneously.

Second is external demand. Although domestic demand is our central driving force, we should actively consolidate external demand. We should further strengthen the reform and opening up, actively consolidate foreign investment and trade, stabilize the foundation of foreign investment and trade and stimulate the vitality, dynamic and potential of microeconomic entities. In future reform and opening up, we need to keep moving forward with greater momentum.

In a nutshell, we must pay attention to both domestic and external demand and reinforce the foundation of external demand. Domestic demand is the key driving force, but neither investment nor consumption can be tailored exclusively to domestic demand. The fields and space of investment will be more focused on eliminating weaknesses and strengthening potential, promoting industrial upgrading and enhancing the level and capacity of supply. Thank you.

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