Zhang Jun looks forward to China s economy in 2024

Mondo Finance Updated on 2024-02-01

**: Fudan Development Research Institute.

Professor Zhang Jun is currently a senior professor of liberal arts, dean of the School of Economics, and director of the China Center for Economic Research at Fudan University

The first economic work conference held not long ago comprehensively summarized the economic work in 2023, and at the same time deeply analyzed the current economic situation, and also systematically deployed the economic work in 2024. Professor Zhang Jun, Dean of the School of Economics of Fudan University and Vice Dean of the Fudan Development Research Institute, was invited by the special program of the "Xinhua Zhice" Sike Annual Conference to interpret the spirit of the ** Economic Work Conference and look forward to the next journey of the economy in 2024. The following manuscript is edited based on the interview with Professor Zhang Jun for readers' reference.

Q1: The national work policy orientation has always attracted the attention of all walks of life, what are the policy signals that deserve our attention at the ** economic work conference?

Zhang Jun: This ** economic work conference reflects the comprehensiveness of policies. Why? At different stages of development, the policy focus is different, and the first economic work conference is very obvious that it is hoped that at the level of policy implementation, it will make flexible adjustments in a timely manner according to the changing situation, and the supply side and the demand side should be combined. Specifically, we need to combine the policy of demand management with the reform of the supply structure. In this process, "breaking" and "standing" should be well dialectically unified. In the absence of being able to completely "establish," we should not be in a hurry to "break," and "breaking" and "establishing" should be well combined, and the same should be true of "stability" and "progress." At the same time, investment and consumption should also be organically integrated. This actually puts forward higher requirements for localities, localities at all levels and relevant departments at the level of implementing macro policies. There is only one goal, that is, to stabilize the current economy, especially in the future, the momentum of economic recovery must be maintained.

Q2: The economic development in 2023 is a year to withstand external pressure, but also a year to overcome internal difficulties, in 2024 our confidence and confidence come from?

Zhang Jun: In 2024, the economy has experienced a special period in the past three years, and the growth rate has been greatly affected. But in the past three years, the potential has not changed much, and the potential in all aspects is still there. Therefore, the most important thing is that some of the policies and requirements formulated by this ** economic work conference can be implemented. In the end, how to release the potential, the most important thing is, of course, to rely on changing policies, so this ** economic work conference specifically mentioned non-economic policy factors, in the future, should be included in the main front of economic recovery, which is quite important. In previous Politburo meetings, it has been said that it is very important to have the stability of expectations now, and at the same time to maintain the continuity of policy in terms of time, and not to change policies too often, which would disturb everyone's expectations. There are also some social, political and other policies just mentioned, and try not to interfere with the process of economic recovery.

Q3: This year, there is a hot word called new quality productivity, from the first economic work conference, what is the status of scientific and technological innovation in economic development? In the process of gradually promoting the economic rebound, what difficulties and challenges do we have to overcome?

Zhang JunToday, we face more challenges, both internally and externally. The external challenges are now very clear, there will be friction with the best partners at the beginning, and finally it will become the first war, and it will become a competitor, which is difficult to change, and there is a high probability that it will change the global pattern. What can we do? We have to adapt to this pattern. For example, now it is necessary to increase the overseas export of production capacity and encourage private enterprises to go overseas. I think in the next five years, ten years, or even longer, China's overseas production layout should reach new heights. Internally, it is still necessary to intensify structural reform and promote the marketization of China's economy. This new driving force is not only the manufacturing industry, or the industries represented by the new quality of productivity, but also the modern service industry.

Therefore, how to promote the economic structure from over-reliance on manufacturing to high-end manufacturing and modern service industry to promote each other? On the one hand, it is necessary to lay out the production chain in the world through the continuous expansion of overseas direct investment; Internally, it is necessary to promote the continuous improvement of the marketization level of the economy through institutional reform, so that the allocation of resources depends more on the market than on intervention. At the same time, in this process, market players can see the potential of the service industry, and the opportunity to make profits through the development of high-end service industry is increasing, then there will be more resources to invest in the modern high-end service industry.

Q4: In the course of the dialogue, we have mentioned openness and foreign trade, how do you view the current situation of China's foreign trade?

Zhang Jun: Recently, the think tank in Washington was the Peterson Institute for International Economics, and they organized economists to do a study. According to the study, China's share of all U.S. imports has fallen by nearly 7 percentage points from 17 years to the present. Then these 7 percentage points are down by an average of 1 point a year. Intuitively, we can come to the preliminary conclusion that the United States implements a high tariff policy on the so-called strategic products and technologically complex products that China exports to the United States, so of course it has an impact on what China exports directly to the United States. However, China has substitution (its own export) through a third party (export), and this third party needs to import a large number of parts from China in order to export more to the United States, and then assemble them there, which is equivalent to a direct export to indirect export, in fact, China began to transfer a large number of production capacity overseas, especially in Southeast Asia and Latin America, and then directly invested. This trend is likely to continue for quite some time.

Q5: In addition, what are the favorable factors for the development of China's foreign trade and the attraction of foreign investment? Judging from the first economic work conference, what opportunities can be seized for our enterprises?

Zhang JunIn fact, after 45 years of reform and opening up, many enterprises, especially those that have grown up after the reform and opening up, may have experienced the second and third generations of development. Today, it may be normal to look back and see that the best of our expansion has passed. Because economic development has experienced an era of acceleration and then began to slowly decelerate, and now it is time to start the first stage. In this case, most enterprises, now the first to have a global vision, there are many future growth points in the overseas market, on this basis, the domestic economic development has reached such a height, (so at least in the market environment) must get out of the involution state, to focus the main energy and resources on what they do best. In this case, I feel that I should concentrate on my main business. Now the country has put forward the words "specialized, special and new", which I think is particularly good, which actually represents how to concentrate the best wisdom, resources and talents in these fields in the fields most needed for economic development. Therefore, it may be that for entrepreneurs, experiencing such a big change is actually our education. We need to open our horizons and return our attention to our main business, so that the company can be evergreen.

Q6: For multinational companies that have been rooted in China for a long time, including those who have a wait-and-see attitude towards China, can you analyze the current China policy, including the market opportunities they face?

Zhang Jun: It's actually quite complicated. Because it is not easy for us to distinguish whether the international companies that have withdrawn from China are because they are no longer competitive, they no longer have an advantage in the Chinese market, or something else. Because there are many local companies that are better developed and he is facing a lot of competitors, he may need to reconsider another part of the world, such as Southeast Asia, India, and other places. I think this is very normal, but we do see that many large international famous multinational companies that have been deeply involved in China for decades are still making additional investments, and most of the FDI growth reported by the Bureau of Statistics should come from such companies that have been deeply involved in China for decades, and they have decided to continue to invest in China. As long as we keep the door open and we can improve the business environment at home, even if these companies may encounter interference from other regions such as the United States or the European Union, I believe that they will still break through all kinds of resistance and participate in China's future development. In this context, I very much agree with our recent practice of unilaterally exempting many countries from visas. If we extend this approach to attracting foreign investment, that is, there are actually many areas that can be unilaterally opened up, so that a large number of high-quality products will enter China and improve our welfare. Therefore, I think that in the current situation, we take the initiative and unilaterally do some opening-up, which is still very beneficial to our future economic development.

In 2023, China's economy will forge ahead in the midst of climbing and overcoming obstacles, and the picture scroll of 2024 is about to begin. Let us strengthen our confidence, forge ahead, and make new and greater contributions to the building of a strong country and the great cause of national rejuvenation in an all-round way with high-quality development results.

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