Niu Wenxin: Look At The Service Industry Calmly

Although China's GDP growth in the third quarter of this year is only 7.3%, we do not think this is important. What is important is that we can not allow China's economy to be in a vicious circle for a long time and enter a virtuous circle. In my view, the so-called virtuous circle of the economy should have at least one important feature: economic growth is driven by the active investment of enterprises, especially private capital, rather than endless dependence on government investment. Now, we are not convinced of the virtuous circle of China's economy, but the overall situation is better than before, or is developing in a good direction.

To achieve a virtuous circle, the key is that China must adjust its monetary policy accordingly. Changing the past in order to achieve the goal of balance of payments, and more to shift the domestic demand of China's economy. Now we have seen good signs, but lack of adequacy. Of course, we should also understand that monetary policy adjustment is not an overnight event. We need to allow a gradual process. This is also an objective requirement.

As premier Li Keqiang delivered in his speech at the opening ceremony of the 2014 Summer Davos forum, "to look at the Chinese economy, we should not just look at the local situation, see the" single subject ", but also look at the trend, look at the overall situation and see the total score. We insist on the basic idea of interval regulation, so long as the economic growth rate is maintained at around 7.5%, a higher point and a lower point are all reasonable intervals. In particular, we should see that steady growth is aimed at ensuring employment, and the lower limit of regulation is relatively full employment. So when the outside world is interpreting China's economy, it must also switch to new thinking in a timely manner. Instead of focusing on the number of decimal places of GDP growth rate, we should pay more attention to the transformation of economic growth momentum and the transformation of economic development mode. This statement is actually aimed at the expression of "virtuous circle".

From a recent period of high-level expression, the central government's view of a virtuous circle of economy is more biased towards structure. In October 21st, Premier Li Keqiang met with the twenty-first APEC Finance Ministers delegation, saying: "it is necessary to pay attention to the growth rate of GDP, but it is biased to pay attention to the growth rate of GDP only. Because China pays more attention to structural optimization and transformation and upgrading, and it needs more quality, efficiency, regularity and sustainable growth." APEC

Premier Li Keqiang emphasized in particular. Gross domestic product Some positive and profound trend changes behind the slowdown. For example, the structural optimization led by the service industry and the acceleration of new formats has become more apparent. The impetus for reform and growth is accelerating, and the vitality of enterprises and the market is constantly being released. Employment, energy saving and consumption reduction indicators are better than expected; the regional structure has been improved, and the backwardness advantages of the central and western regions have continued to play. At the same time, Li Keqiang emphasized in particular that the "Fourth Plenary Session" is now brewing and the "upgraded version" strategy of administering the country according to law will also become a potential booster for China's economic growth.

In my opinion, Prime Minister Li Keqiang's overall judgment is right. But we need to stress that structural adjustment and industrial upgrading can not be separated from the co-ordination of aggregate policy (monetary policy). Because for a country and an enterprise, structural adjustment and industrial upgrading mean two parts: incremental adjustment and stock adjustment. From an incremental perspective, it can not be separated from new investment, and only when new investment is concentrated in a new direction, will the industrial structure change. From the stock perspective, traditional industries involve the necessities of production and life of the whole society. Although there is a problem of eliminating backward production capacity, after all, it is not just a simple elimination problem, but rather a need for upgrading and upgrading, which also requires new investment.

So we need to be sober. If there is no " new investment "New vitality", we can not have the "new economy", which is a basic economic law. What China needs is both new and elimination, and the freshmen are bigger than the elimination. Only in this way can we maintain the positive growth of GDP and have the foundation of a virtuous circle. Therefore, our policy must take into account the coordination between the structure and the total amount. This is a necessary condition for promoting the benign circulation of China's economy and also a requirement of objective economic laws.