The hottest focus of China's economy in the second

Highlights of China's economy in the second half of the year: preventing risks, stimulating domestic demand and promoting reform

in the first half of the year, China's major economic indicators grew steadily, and the stability and gold content of economic growth continued to improve. But at the same time, investment, consumption and export are stable and slowing down. The National Bureau of statistics released China's macroeconomic report card for the first half of the year on the 16th. The main economic indicators grew steadily, and the stability and gold content of economic growth continued to improve. But at the same time, investment, consumption and export are stable and slowing down

as usual, an important mid year economic work conference will be held to set the tone for economic work in the second half of the year. In recent years, in late July, the Political Bureau of the CPC Central Committee has held meetings to analyze and study the economic situation and deploy economic work in the second half of the year

many experts interviewed by China business said that the focus of economic work in the second half of the year is to prevent risks, boost domestic demand and accelerate reform. Macro policies need to be adjusted and balanced between stable growth, structural adjustment and deleveraging, and strict supervision to cope with internal economic fluctuations and external environmental challenges

risk prevention

as the first of the three major battles, risk prevention is the focus of economic work this year. From the high-level meetings held in recent months, risk prevention has been put in the first place

Wang Jun, chief economist of Zhongyuan bank and member of the academic committee of the China Center for international economic exchanges, said in an interview with China business news that in the second half of the year, in the face of downward economic pressure and credit risk exposure, domestic policies need to be adjusted and balanced between steady growth, structural adjustment and deleveraging, and strict supervision. Prevent the superposition of many tightening policies from causing financial tension and increasing liquidity risk

the Central Commission for comprehensively deepening reform (hereinafter referred to as the Central Commission for deep reform) has focused on reducing leverage in two meetings this year. On April 2, liuxiaolei, the sales manager of cyanate chemical at the first meeting of the central deep reform commission, asked local governments and enterprises, especially state-owned enterprises, to reduce leverage as soon as possible, and strive to achieve a stable and gradual decline in macro leverage ratio; On May 11, the second meeting of the Central Commission for deep reform pointed out that the asset liability constraints of state-owned enterprises should be strengthened and state-owned enterprises should be promoted to reduce leverage

on July 2, the new financial stability and Development Committee of the State Council was established and held its first meeting to study and deploy the work related to preventing and resolving major risks, and determine the tone of future financial stability work. Judging from the current situation, there are indeed a series of potential risks in the financial field in China, such as the violent fluctuations in the stock market and foreign exchange market, and the outbreak of credit default in the bond market, which all indicate that we should not take financial risk prevention and control lightly. Lian Ping, chief economist of Bank of communications, said

in the second half of the year, the decisions on risk prevention and deleveraging at the above-mentioned important meetings will be further implemented. Wang Jun said that in addition to emphasizing the continuity and stability of policies, we also need to pay attention to the flexibility, foresight and synergy of policies, study and master the strength and rhythm of various policies, and avoid policies that are too simple and crude, as well as contradictions and conflicts between multiple policies

in particular, we should make timely adjustments to the intensity and pace of the introduction of deleveraging and strict regulatory policies, distinguish priorities, and be careful to prevent monetary and financial shocks from exceeding our current risk control capabilities. As far as fiscal policy is concerned, it can play a more active role in stimulating the vitality of market players and promoting structural adjustment, and greater tax reduction policies can be adopted to deal with the internal and external shocks in the current market clearing process. Wang Jun said

state owned enterprises are the top priority of deleveraging. Peng Huagang, deputy secretary general and spokesman of the state owned assets supervision and Administration Commission of the State Council, said at the press conference of the state information office on July 12 that central enterprises should actively and steadily carry out market-oriented debt to equity swap and mixed ownership reform in the future, continue to promote quality and efficiency improvement, and reduce leverage and liabilities through multiple channels. At present, 18 central enterprises have signed a framework agreement on market-oriented debt to equity swap of about 500billion yuan, of which more than 200billion yuan has been implemented

at the same time, external risks should be prevented. Wang Jun told first finance that in the second half of the year, foreign demand faced three major risks: first, reducing the contribution of net exports to economic growth; Second, geopolitical conflicts in the Middle East may lead to the continuous rise of crude oil prices, which may significantly boost China's PPI growth rate; Third, overseas financial markets may face severe fluctuations. The United States continues to raise interest rates, and U.S. stocks fluctuate at a high level

Xing Ziqiang, chief economist of Morgan Stanley China, told China business that at present, China's economy is resilient and the risks are generally controllable. At the same time, we can manage the pace and pace of structural deleveraging through policy pre adjustment and fine-tuning to cope with external uncertainty. In general, the resilience of the economy and the space for policy have made it possible for China to prevent risk escalation

boosting domestic demand

domestic demand has become the decisive force to drive economic growth. In the first half of the year, the contribution rate of consumption to economic growth reached 78.5%, an increase of 14.2 percentage points over the same period last year. Private investment and manufacturing investment also showed an improvement trend

Wang Jun said that one of the priorities of economic work in the second half of the year is to actively take effective measures to expand internal demand, focusing on promoting consumption upgrading, avoiding consumption degradation, accelerating the implementation of Rural Revitalization and boosting private capital investment

according to the data of the National Bureau of statistics, in the first half of the year, the total retail sales of social consumer goods increased by 9.4% year-on-year, down 0.4 percentage points from the first quarter. The national fixed asset investment (excluding farmers) increased by 6.0% year-on-year, down 1.5 percentage points from the first quarter, and the overall growth rate showed a slowing trend

maoshengyong, spokesman of the National Bureau of statistics, said on the 16th that in the second half of the year, there are conditions to continue the steady and rapid growth of consumption. There are several factors: first, consumption itself is rigid growth; Second, the growth of residents' income has maintained a relatively rapid growth over the years; Third, the pace of upgrading the consumption structure will only accelerate and will not stop; Fourth, the import policy factors. In recent years, China has increased imports, which will promote the activity of the whole market sales and increase supply

in the first half of the year, the growth rate of fixed asset investment hit a 19 year low. However, due to the continuous recovery of bdi606 in the growth rate of manufacturing investment and private investment, the growth rate of fixed investment is expected to stabilize in the second half of the year

the decline in investment is mainly due to the drag of infrastructure construction investment. Since this year, the growth rate of infrastructure investment has continued to decline, and Hunan, Tianjin, Shanxi and other provinces have even experienced negative growth

Lian Ping said in the media that the growth rate of infrastructure investment in the second half of the year may bottom out and rebound. With the completion of the liquidation of PPP projects, it is expected that the amount and number of project libraries will stabilize or even rebound in the future, which will help stabilize infrastructure investment in the second half of the year. In addition, accelerating the allocation and expenditure of financial funds, invigorating the financial stock funds and improving the efficiency of fund use will improve the source of capital for infrastructure investment

speed up reform

Wang Jun said that in the second half of the year, we should earnestly promote the implementation of various reforms, focusing on the reform of state-owned enterprises and state-owned assets, the reform of the fiscal and tax system, especially the relationship between the responsibilities and rights of the central and local finance, which needs to be straightened out as soon as possible

Yang Weimin, deputy director of the Economic Committee of the CPPCC National Committee, said at the Lujiazui Forum recently that the slow progress of state-owned enterprise reform has delayed the supply side structural reform to a certain extent

Wu Qi, a senior researcher of Pangu think tank who has worked in large state-owned enterprises for many years, said in an interview with China business that, in a certain sense, the current reform of state-owned enterprises is indeed slow, the reform measures at the top macro level are less than expected, and there are few substantive actions at the micro level of enterprises

Li Jin, chief researcher of the China Enterprise Research Institute, told China business news that the supply side structural reform focusing on structural adjustment and the reform of state-owned enterprises are being carried out simultaneously, which is forming new dividends and directly promoting the positive growth of central enterprises for nine months. Signs of a new cycle have emerged and become more and more mature, or we should rethink the reform measures under the new cycle

in the next step, SASAC and central enterprises will continue to focus on deepening the supply side structural reform, continue to promote the adjustment and optimization of layout structure, solidly promote the implementation of various reform measures, strengthen risk prevention and control in major fields, continue to open up and cooperate with the outside world, and accelerate the cultivation of world-class enterprises with global competitiveness. Li Jin said

Liu Zhe, vice president of Wanbo New Economy Research Institute, said that under the background of increased external uncertainties, the reform focus in the second half of the year is mainly on two aspects: one is to relax the supply constraints of production factors such as land, population, capital and system, and the other is to relax the supply constraints of products. In this process, monetary policy and fiscal policy should be actively coordinated, and timely adjusted in line with new changes such as financial leverage ratio, broad monetary growth rate, foreign tax reduction policies, etc

the reform of central local fiscal relations, as the most difficult bone in the reform of the fiscal and tax system, has entered a critical stage. Gaopeiyong, member of the Faculty of the Chinese Academy of Social Sciences, said in a speech in June this year that the root cause of local debt risk is not local government debt itself, but the institutional background that causes or forms local government debt risk. This institutional background is that the central drop hammer impact experimental machine adopts a double tube structure, the financial relationship between local governments is not standardized, and the financial revenue and expenditure system of local governments is not perfect

and insiders play the role of clearing the market. People told China business that documents to prevent and control the risk of local government debt are being formulated, including the identification and resolution of implicit debt. For example, the concern of implicit debt caliber, local governments in any form of illegal or disguised borrowing outside the statutory government debt limit, are implicit debt. The regulators' recognition of implicit debt will be penetrating, with substance more important than form

Liu Kun, Minister of finance, said at the 2018 session of the China development forum that the next step is to establish a central and local fiscal relationship with clear powers and responsibilities, financial coordination and regional balance. Scientifically define the fiscal powers and expenditures at all levels, form a reasonable financial pattern between the central and local governments, control the difference in per capita fiscal expenditure of the permanent population within a reasonable range, and accelerate the equalization of basic public services on the basis of fully considering the cost factors of expenditure between regions

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