By Wang Yiming, DRC

2018-7-16

Since the beginning of this year, while dealing with Sino-US economic and trade frictions and preventing and resolving major risks at home, China has maintained the stable economic performance of last year. The structure, quality and benefits of economic growth have continued to improve, and the resilience of economic development has increased. At the same time, the risks and challenges facing the economic operation have mounted up. In order to keep the stable and healthy economic development momentum in the second half of the year, we need to strengthen our confidence, maintain our strategic focus and follow the general principle of seeking steady progress so as to effectively stabilize market expectations and domestic demand by means of a host of coordinated macro-policies. We need also persist in promoting supply-side structural reform and structural deleveraging, and intensify reform and opening up, in a bid to enhance the inner economic drivers and the risk resistance ability.

First, the conditions for shifting to high-quality development are being prepared. At present, China's economic performance is generally stable, the growth rate of private investment is picking up, the old drivers are more rapidly replaced by new ones, the quality and benefits continue to improve, and the effect of risk prevention and control is remarkable, all of which have added up to the prepared conditions for turning economic performance into high-quality development.

Second, looking into the second half of the year, steady economic operation still faces multiple risks and challenges, imposing a big impact on the economic performance in the rest of the year. Internationally, the Sino-US economic and trade frictions keep escalating; and the monetary policies of several major economies are witnessing some changes. Domestically, the hidden risks are being released under the backdrop of deleveraging; and investment growth rate is diminished marked by downward pressure on the fixed asset investment. Since the new changes in economy under the domestic deleveraging is largely a result of positive adjustment, if appropriate responses are made, we can not only further advance structural adjustment and resolve risks but also propel economy onto the high-quality development track.

Third, we need to ensure moderate expectations and market demand to maintain steady economic development. In response to the major changes in external environment and the new economic changes against domestic deleveraging, the key is to build up confidence, make steady progress and coordinate macro-policies so as to effectively stabilize market expectations and expand domestic demand. We need to persist in promoting supply-side structural reform and deleveraging, and intensify reform and opening up, in an attempt to reinforce the foundation for steady and healthy economic development and boost new progress in the high-quality economic development. One, we need to properly deal with Sino-US economic and trade frictions, strengthen the assessment of the impact of economic and trade frictions on industries, enterprises and employment, and establish an early-warning and emergency relief mechanism to minimize probable losses. We need to support enterprises to open up alternative markets and promote market diversification. Two, we need to effectively stabilize market expectations. It is most important to maintain the continuity and stability of macro-policies and adopt forward-looking and targeted policy measures. Three, we need to effectively expand domestic demand, strive to stabilize employment, strengthen the re-employment assistance mechanism, stabilize and improve the incomes of residents, including low-income and middle-income earners, ensure social security benefits, and improve the consumption ability of residents. Four, we need to continue to push forward supply-side structural reform. Five, we need to stick to structural deleveraging. And six, we need to intensify reform and opening up, enforce the protection of property rights and intellectual property rights, and strengthen the government binding mechanism to fulfill its commitments.