SCIO briefing on Report on the Work of the Government
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E-mail China.org.cn, May 25, 2020
Hu Kaihong:
Thank you, Mr. Huang, for your introduction and interpretation. Let's start the questions.
CNR:
I noticed that this year's Report on the Work of the Government did not propose specific GDP targets. Why is that? In addition, how should the current economic situation in China be seen? Thank you.
Huang Shouhong:
This is one of the most prominent issues that society is concerned about. Please allow my colleague Mr. Sun Guojun to answer the question.
Sun Guojun:
Your question is uppermost in everyone's minds. Before I came here, I watched CCTV's "livestream room" program and its "ministers' passage" broadcast. The first question raised by a reporter was regarding this year's report not putting forward a quantitative economic growth target, as the annual Report on the Work of the Government usually proposes an expected target for GDP growth rate that year. Of course, there have been occasions in the past when one was not mentioned.
Why didn't we mention economic growth this year? In fact, the biggest factor is uncertainty. This uncertainty comes mainly in two aspects: one reason is the uncertainty in the pandemic’s development trend. There are now nearly five million confirmed cases worldwide, and large increases of almost 100,000 new cases every day. No one can predict the next development trend of the pandemic. The other reason is the uncertainty in the world economy. The pandemic is currently the biggest factor affecting global economic activities. If we cannot accurately estimate the progress of the global pandemic, we cannot accordingly estimate how the pandemic control measures will be adjusted for each country. In the first quarter, the major global economies have experienced relatively large negative growth. Much analysis concludes that the world economy has experienced a severe recession, and even suggest that it may be no less severe than the Great Depression in the 1930s. The economies of all countries are in great uncertainty.
Not setting a specific target for economic growth this year does not mean we are ignoring economic growth or letting economic growth decline. There is a very important sentence in the report, which reads "ensuring stable economic performance is of crucial significance."
At present, there are two aspects that need to be underpinned by economic growth. First, this year, we must give priority to stabilizing employment and ensuring living standards, win the battle against poverty, all of which need to be underpinned by economic growth. Based on the empirical data of previous years, one percentage point of growth corresponds to about two million new jobs. From the perspective of poverty alleviation, there are nearly 30 million members of the labor force who are impoverished and working away from their hometown. Labor income is an important source of income for many rural residents and an important path to poverty alleviation. If there are difficulties attaining employment, people will also have difficulties receiving income, leading to a whole range of problems related to consumption; thus, growth is critical. Second, economic downturns often lead to the emergence of certain risks. For example, in finance and other fields, new potential problems and risks may emerge during economic downturns. Take financial resources at a basic level as another example: If there is no growth in the economy, there will then be difficulties in financial resources, leading to a series of chain reactions. Therefore, ensuring stable economic performance is of crucial significance.
We have paid a great price for our efforts to prevent and control the COVID-19 pandemic. In the first quarter, the economy posted a negative growth of 6.8%. But considering the health and safety of our people, this is a price that we must pay. It is a price that is worth paying. With the outbreak of the pandemic effectively under control in China and efforts to resume work and production accelerating, the whole Chinese economy is gradually beginning to recover. In April, the industrial growth was at 3.9%, and the growth in electricity consumption, electricity generation and rail freight volume turned from negative to positive, which is a positive sign. Although some indicators, such as total retail sales of consumer goods and investment, were still declining, the rate of decline is slowing down. All this shows that the policies we implemented previously, such as cutting taxes and fees, supporting finance and providing assistance to enterprises to stabilize employment, have paid off.
The report sets out a number of policies to be implemented in the next phase of the year. For example, the fiscal policy focuses on spending money to stabilize employment and ensure people's wellbeing; the financial policy focuses on protecting market entities; the employment and social security policies focus on unfailingly meeting the basic living needs of our people. I believe that with the implementation of these policies, the economy will gradually stabilize and recover. The base of the economy will not have any problems this year, and the people's wellbeing won't have any problems either. Thank you.
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