Li Daokui: China's Economy Is Expected To Usher In A Stable Recovery In The Late 13Th Five-Year.

China's economy is expected to be " The 13th Five-year "Ushered in"

Li Daokui, director of the China and world economic research center of Tsinghua University, said at the "China and world economic forum" sponsored by the center, although China's economy is still facing many risk factors and problems in the current and future period, some factors even accumulate and expand. But only through a series of reforms and adjustments, especially The structural reform of supply-side And the basic system construction, China's economy is expected to usher in a stable recovery in the late 13th Five-Year, and the potential for economic growth in the next 10-15 years is still considerable.

Li Daokui believes that in the medium to long term, we need to promote and implement the following five reform measures:

First, reform of investment and financing mechanism. In recent years, the gap between fixed asset investment growth and social financing scale has gradually widened. In 2015, the growth rate of fixed asset investment dropped to 10%, a new low in recent years, while the scale of social financing increased by 12.4%, while the former was 2.4 percentage points lower than the latter. Now, the government has launched many long-term and basic construction investment projects. These investments are promoted by state-owned enterprises. Most of these projects rely on short-term loans provided by banks. This has crowding out loans from private enterprises, especially small and medium-sized enterprises, which has promoted the cost of bank loan financing, and the problem of time mismatch is not sustainable. In 2015, state-owned enterprises accounted for 48% of the total loans of domestic enterprises, while private enterprises accounted for only 38%. State owned enterprises must be encouraged to diversify their financing methods, such as issuing long-term bonds, so as to reduce their reliance on bank loans and release bank credit.

Second, we must speed up the reform of the mechanism of entry and exit. For some competitive areas, we should reduce trade barriers, reduce the monopoly of state-owned enterprises and stimulate the vitality of enterprises. For enterprises with backward products and poor efficiency, the government should pull out the respirator, let these enterprises withdraw or restructure, on the one hand, lighten the financial burden and promote production capacity on the other hand. For enterprises with general efficiency and heavy burden, the government should dare to "wean" and allow enterprises to compete in accordance with the logic of the market and win the fittest. At the same time, we should highlight the role of "advanced models".

Third, promote the reform of the labor employment system. Although China's aging population has increased in proportion to the total population in recent years, the average quality of the workforce, including education level, life expectancy and health level, has been improved. We believe that the effective labor supply in China will increase year by year in the next ten years, taking into account the healthy working life of the workforce and the average level of education. In order to make full use of the potential demographic dividend brought about by the enhancement of "effective labor supply", we should push forward a more flexible retirement system, so that employees and enterprises can negotiate together to determine the retirement time and retirement protection, so that labor resources can flow fully.

Fourth, implement the policy of natural migration and public service supporting. China has huge market Moreover, there are great differences in the level of development and resource endowments in different regions, which makes China have more unique advantages in developing countries than Japan, Korea and other small economies. Taking Jiangsu and Anhui as an example, the per capita GDP of Jiangsu in 2015 is as high as 88085 yuan, while the average GDP per capita in Anhui province is only 36176 yuan. The inequality and regional convergence effect of inter provincial development will become a major growth point for the future economy. The government should promote the reform of household registration system and urbanization, and guide the labor force to move from backward areas to developed areas. In addition, the government should be more flexible in supporting infrastructure and public services in areas with large economic vitality and fast growth.

Fifth, market-oriented mechanism will lead to orderly bankruptcy reorganization of non-performing loans. According to IMF's recent report, the bad loans of China's banking industry reached 7% of GDP, and the main source of non-performing loans is corporate bonds. If the average repayment period of non-performing loans is 3 years, this means that every year the total amount of social financing equivalent to GDP2.3% should be filled to cover bad debts without bankruptcy reorganization. China's annual total social financing is equivalent to about 25% of GDP. That is to say, if we can not deal with bad debts effectively, 9% of the annual social financing will not be used rationally, and it will lose 0.6% of the GDP growth rate, which is extremely unfavorable for China's economic growth. The marketization mechanism should be used to guide the orderly bankruptcy and reorganization of non-performing loans, so that new social financing can be more effectively circulated into competitive industries.