SCIO briefing on national economic performance in 2014
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E-mail China.org.cn, January 20, 2015
China.org.cn:
According to the Central Economic Work Conference held at the end of last year, China will continue to dissolve the risks signaled by high leverage and economic bubbles while advancing measures to raise economic quality and efficiency. Can you tell us what effects these anti-risk mechanisms and measures can be seen to have had from the data released today regarding China's economic performance last year? Thank you!
Ma Jiantang:
China not only sustained its economic growth and adjusted its economic structure but also prevented possible economic risks. Scholars and financial institutions are always divided over the idea of economic risks, but it is generally recognized that economic risks have lurked in the restructuring of the real estate industry and the ballooning of local government debts in China for a certain period of time.
These risks have drawn great attention from the central government, which issued a guideline that lists "sustaining growth, stimulating reform, adjusting structure, improving livelihoods and preventing risks" as the tasks of its economic work in 2014. As a result, hazards in the two sectors have been eased by overall efforts across the country. Take the real estate industry for example. The new round of adjustment initiated in the first half of last year caused a downward trend in housing sales and prices. But the data for the fourth quarter of last year show some positive signals in the housing market because of a number of loosened marketing and financial policies that have eased restrictions on home purchases and loans. Housing prices started to drop at a slower rate in 70 large-and-medium-sized cities in December in particular. The prices in the first-tier cities stopped declining yearly. The decline in the volume and revenues of housing sales both slowed in the fourth quarter of last year, particularly in December. Sales in first-tier cities underwent a year-on-year growth in December. Shouldn't that prove that the housing market will run more smoothly without a certain number of government interventions?
In regard to the risk posed by local government debts, the central government took lots of measures to clear and calculate these debts. We need to know the exact size of the debts before taking measures to prevent risks from them. The old debts are allowed to be replaced by new ones with lower interest rates, but the most important thing is to "keep the front door open while shutting the back doors." Generally speaking, the local government debts are still under control.
All in all, great achievements were made last year not only in sustaining growth, stimulating reform, adjusting structure and improving livelihoods, but also in preventing economic risks. The caution required in the fiscal and financial sectors to prevent potential crises should be as significant as that demanded in the economic areas where efforts to rein in downward trends have been made. Ceaseless efforts should be made to prevent and control the risks threatening the sustainable economic development of China. Given such circumstances, we'll never use full stops but rather commas in our discussion of battling potential financial risks. Thank you!
Guo Weimin:
Mr. Ma has provided us with a lot of important information and explanation that will probably help us a lot. Thank you, Mr. Ma, and thank you all! That's all for today's press conference.
Ma Jiantang:
Thank you all! Have a Happy Spring Festival and I wish you all the best in the coming Year of the Goat!
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