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[Noticias de La Gran Época el 17 de marzo de 2021](Epoch Times reporter Lai Yiqing reported from Taipei, Taiwan) Liu Mengjun, researcher and director of the Continental Economic Institute of the Chinese Academy of Taiwan Economics (17th) stated that the fourteenth five- The annual plan seeks stability, innovation and transformation. For the first time, the strategy of “expanding domestic demand” was proposed, but the CCP faces many inherent challenges, including the disappearance of China’s demographic dividend, weakening productivity growth, and rising debt risk.
On the 17th, the Chinese Academy of Economics held a “Seminar on Reform Prospects and Development Trends in Mainland China During the Fourteenth Period of the Five-Year Plan.” The so-called “XIV Five-Year Plan” refers to the XIV Five-Year Plan of the Communist Party of China.
Liu Mengjun pointed out that the CCP’s “XIV Five-Year Plan” pursues stability, innovation and transformation, and its “internal cycle” and “dual cycle” strategies have the opportunity to unleash its economic growth momentum, but at the same time Right now, the CCP faces four great internal challenges.
First, the demographic dividend disappears and total demand is insufficient. Liu Mengjun pointed out that since 2012, China’s workforce has gone from growth to contraction. According to the China National Information Center, the average annual decline in the number of the workforce during the period of the “XIV Five-Year Plan” is about 0.3% and will drop to 885 million in 2025. people.
Furthermore, China’s total population will enter negative growth between 2025 and 2030. Liu Mengjun noted that insufficient total demand will lead to long-term economic stagnation. Along with the recovery of the dependency ratio of China’s population, the problem of population aging will also accelerate.
Second, productivity growth has weakened and the potential growth rate has slowed. Liu Mengjun pointed out that China’s total factor productivity (referring to the efficiency of production activities within a certain period of time) has slowed, along with factors such as Chinese zombie companies and inefficient investment, which have led to a further slowdown in productivity growth. , from the current 4% to 2.5% to 3%.
Third, the weakening of China’s capital productivity. Liu Mengjun pointed out that before the pneumonia epidemic, investment momentum in China has gradually weakened. Among them, investment in fixed assets has been gradually decreasing since 2017; Furthermore, the data also shows that China’s domestic investment is weakening in its economic growth.
Fourth, China’s debt risks have increased. Liu Mengjun pointed out that China’s huge investment mainly comes from large-scale debt, and low investment efficiency may cause the possibility of debt default, further leading to systemic risks in the financial system. In addition, China’s non-financial sector leverage ratio continues to expand. In 2019, the non-financial sector leverage ratio was 258.7%, and the scale continued to expand, increasing to 274.5% in the first quarter of 2020.
Liu Mengjun further explained that the excessive increase in the leverage of residents will bring adverse effects such as the deterioration of bank assets, the accumulation of financial risks and the suppression of the growth of residents’ consumption.
China’s 600 million poor people become a big problem
Wu Jiaxun, a researcher and deputy director of the Continental Economic Institute of the Chinese Academy of Economics, also delivered a special address at the meeting. Wu Jiaxun said that the CCP’s “XIV Five-Year Plan” and “Vision 2035” will focus on the domestic market, focusing on domestic demand and technological autonomy; Among them, Beijing will promote new infrastructure (5G, Industrial Internet), digital economy (AI)) and emerging strategic industries (green energy, biotechnology, etc.). Wu Jiaxun said that China’s domestic demand market remains the largest in the world, but “as these industries develop, these industries will also become more competitive,” and we should continue to watch the subsequent developments of the market.
Wu Jiaxun said that the CCP also faces four major challenges in promoting the internal cycle. First, China is now facing a shift in the consumer market, that is, “exports to domestic sales”, but said consumers may have difficulty paying for domestic products that were originally export-oriented.
Second, local protectionism. He explained that the production capacity of various industries is highly concentrated and excessive production exceeds the market burden of domestic demand, which generates fierce competition and generates unemployment; third, the gap between urban and rural rich and poor after the epidemic has widened further; fourth, after the trade war and the epidemic, it can be said that the general dependence on state-owned companies is “the country advances and the people retreat.”
Wu Jiaxun pointed out that China currently has around 600 million people who belong to the poor class. It can be difficult to integrate into the market to form an effective consumer power. This has become the biggest problem for the CCP to use the domestic cycle to boost economic growth.
Editor in Charge: Lv Meiqi #
