Gao Peiyong: Behind the current demand and supply problems are expectations.
At the end of last year, the Central Economic Work Conference proposed that in 2024, we must persist in seeking progress while maintaining stability, promoting stability through advancement, establishing before breaking, and developing more policies that are conducive to stabilizing expectations, stabilizing growth, and stabilizing employment. "The previous goal of stabilizing growth, stabilizing employment, and stabilizing prices has become the current goal of stabilizing expectations, stabilizing growth, and stabilizing employment, which shows that 'stabilizing expectations' will be an extremely important keyword in China's economic operation in 2024." Department of Chinese Academy of Social Sciences Gao Peiyong, member and former vice president, said at the "Peking University Guanghua New Year Forum" today.
Gao Peiyong pointed out that the reason why stabilizing expectations is important stems from the country's analysis and judgment of the current economic situation. He said that the economic recovery after the epidemic in the past year is different from the past - China has experienced economic recovery after the Southeast Asian financial crisis in the late 1990s, and also experienced economic recovery under the background of the international financial crisis from 2008 to 2010. However, the recovery process in 2023 is different from the previous two recovery processes and can be called "atypical economic recovery."
In the year after the epidemic, in the economic field, there were not only shrinking demand, supply shocks, and weakening expectations, but also a superposition of cyclical, structural, and institutional contradictions. Gao Peiyong believes that when various contradictions and problems are intertwined and superimposed, it can be found through mutual mapping that on the surface it is a demand problem, but behind it is actually an expectation problem; on the surface it is a supply problem, but behind it is also an expectation problem. "In other words, in the current economic recovery process, the new difficulties and challenges we face are concentrated in confidence and expectations."
He said that only when the confidence of residents and enterprises is enhanced and expectations are stabilized, can the contradictions and problems of insufficient consumer demand and investment demand be alleviated, and can the contradictions and problems originating from the two wings of demand and supply be relaxed and consolidated. Only by strengthening the economic recovery and improving momentum will there be a solid foundation and guarantee.
Gao Peiyong said that macroeconomic policy support is indispensable for economic development. At the same time, when it is noted that the main aspects of the main contradiction are issues of confidence and expectations, the fundamental solution lies in reform and relies on the linkage between reform and policy. "In layman's terms, it is necessary to use the twin engines of reform and policy to drive economic recovery and lay the foundation for institutional mechanisms to stabilize expectations."
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