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The speed of economic recovery in various regions is directly related to the effectiveness of epidemic prevention and control.
China’s economy outside the “V” shaped recovery curve
Beijing, December 30 (China Youth Daily and China Youth Daily reporter Zhang Junbin) Today, Liu Shangxi, Secretary of the Party Committee and Dean of the Chinese Academy of Fiscal Sciences, Ministry of Finance, released an investigative report in Beijing . The report describes the performance of China’s economy under the epidemic: In 2020, China’s economic performance will emerge from a “V” -shaped recovery curve, and work, production and business will resume in an orderly manner, but the economic development space is significantly different.
From October to November 2020, the Chinese Academy of Fiscal Sciences traveled to various regions to conduct special surveys focusing on “corporate costs and local fiscal and economic operations”, and organized financial data and related interviews in Zhejiang, Hainan, Sichuan and other provinces and cities. Liu Shangxi said that overall, the economies of various regions are recovering steadily, and the rebound of the epidemic in some regions cannot stop the overall economic recovery.
Data shows that in 2020, China’s economy will decline first and then rise. GDP growth rates in the first three quarters were -6.8%, 3.2% and 4.9%, respectively. By the end of the second quarter, a clear “V” shaped economic recovery trend had formed. The quarterly accumulated increase was 0.7% year-on-year. At the end of the third quarter, only five administrative regions at the provincial level in the country were still experiencing negative GDP growth.
In 2020, the speed of economic recovery in various regions is directly related to the effectiveness of epidemic prevention and control. The western region was least affected by the epidemic and was the first to achieve positive growth. At the end of the second quarter, among the 16 regions that were the first to achieve positive growth in the country, 10 were in the western provinces. In the first three quarters, Tibet, Guizhou, Gansu, and Yunnan ranked in the top four in the country’s GDP growth rate; Among them, the southwest region is the mountain of development, the GDP growth rates of Sichuan, Chongqing and Guangxi are above 2%, while the northwest region shows a certain degree of GDP growth. Due to the repeated epidemics in some provinces (Xinjiang and Qinghai), the growth rate in the third quarter has slowed down compared to the second quarter. Gansu and Ningxia have recovered better, but Inner Mongolia has yet to turn positive (-1.9%).
The eastern coastal regions and the Pearl River Delta region have strong economic resilience, which has accelerated the release of strong momentum. With imports and exports better than expected in the third quarter, Guangdong, Jiangsu, Zhejiang and other major manufacturing provinces and export-oriented economic provinces have a strong foundation and great power, effectively driving the economic growth of the economic belt of the Yangtze River and the Greater Bay Area.
One issue that deserves attention is that the recovery on the consumer side is still lagging behind on the production side. As of the end of November 2020, the annual growth rate of total retail sales of consumer goods across the country is still negative. Although the rate of decline has slowed, consumption has obviously not returned to the pre-epidemic level.
The research team found that new consumption is the main driving force behind the recovery in consumption, and all regions have benefited more or less from the development of new consumption. For example, in the first three quarters, online retail sales of above-designated size products in Anhui increased 28.7% year-over-year, and Internet meal revenue increased 60.3% year-over-year; retail sales of commodities above the designated size in Guizhou through public networks increased by 84.6%; and units above the designated size in Chongqing Online retail sales of physical goods increased 44.6% year-on-year.
Liu Shangxi said that the epidemic has become a catalyst for the adjustment of the industrial structure and the conversion of old and new kinetic energy, and the growth of new kinetic energy against the trend has offset some of the negative effects of the epidemic until certain point.
From January to November 2020, China’s software and information technology services industry continued to recover, with business revenue increasing 12.5% year-on-year. According to the breakdown of retail sales for November, mandatory consumer goods were basically stable, with a slight decrease in the growth rate, such as cereals, oils and food (7.7%), daily necessities (8.1% ); consumer optional goods that represented the direction of the improvement in consumption maintained high growth. Like automobiles (11.8%), cosmetics (32.3%), etc., they exert a significant pull on global consumption.
At present, China’s digital economy has basically formed three centers in the Yangtze River Delta, the Pearl River Delta and the edge of the Bohai Sea, and five hot spots in the Sichuan Basin, the Central China Plain, southeastern Fujian, the Guanzhong Plain, and the Shandong Peninsula. A good base for regional industrial development is the soil that nourishes the digital economy. And the digital economy, in turn, has improved the anti-risk capacity of the industrial chain under the epidemic.
“Digital technology can better overcome the spatial barrier caused by the epidemic and directly promote economic efficiency. Therefore, the digital economy contributes to the restoration of the industrial chain and supply chain, and effectively smoothes the regional business cycle.” Liu Shangxi said of the reality In terms of development, the critical points of the digital economy and the critical points of economic recovery have basically realized the overlap in distribution.
Liu Shangxi recalled that, at present, the foundations of economic recovery are not yet solid and that some deep-seated contradictions have become more prominent. The distribution of public risks under the epidemic is spatially different and the means of local fiscal coverage against public risks are also spatially different. Under the new dual-cycle development pattern, the interprovincial industrial structure, business environment, balance of supply and demand, and spatial difference of talent flow still exist, and the issue of local fiscal sustainability deserves attention.
As the economy moves into the future, the necessary fiscal policy adjustments will be necessary. The research team suggested that the government should establish a smooth exit mechanism for epidemic prevention and control policies to reduce the risk of excessive policy exit. At the same time, adopt proactive fiscal policies to fully stimulate the internal vitality of micro-market entities, combine policies to reduce taxes and fees with reforms to the social security system and the tax system, and maintain a certain intensity of spending under the premise of optimizing the spending structure. In addition, it is also extremely important to take multiple measures to resolve the hidden debt risks of local governments.
Source: China Youth Daily
