Rational and Precise Implementation of Macro-Policies

The year 2020 was an extraordinary one in China's history. It was a year when China faced a grave and complex international situation and arduous tasks in domestic reform, development, and stability, especially in response to Covid-19. Confronted with these challenges, the CPC Central Committee, with President Xi Jinping at its core, commanded the overall situation and maintained a strategic resolve to pursue progress while ensuring stability. The central authority focused on coordinating containment of Covid-19 with economic and social development based on accurate assessments of the situation and meticulous planning, adopting combinations of well-conceived and targeted macro-policies in areas including government finance, currency, employment, industry, investment, consumption, environmental protection, and regional development. These were aimed at market entities and delivered government funds directly, helping to maintain security and stability. Having struck a balance with China's wider policy goals, a powerful synergy was created between macro-controls and deeper reform. Thanks to these efforts, in addition to achieving significant success in containing Covid-19, we have kept employment and economic fundamentals stable and taken greater strides toward high-quality growth. 

China's new development phase presents unprecedented challenges and opportunities for China, but the latter outweigh the former. Given the strong leadership of the CPC Central Committee led by President Xi Jinping, and the evident institutional strengths of Chinese socialism, there are still many conditions that favor China's economic and social development, such as its rich experience in implementing macro-policies and its honed ability to respond rapidly and effectively to internal and external risks. As a result, China has the confidence and ability to identify opportunities amid crises and create new prospects for economic and social development in its new stage of development. 

Precise and effective implementation of macro-policies is the key to a thriving economy. If we are to complete the economic tasks and objectives set by the central authority, we must adapt to the changes and new requirements posed by the new development stage and understand how major economies operate. 

As the first year of the 14th Five-Year Plan period, 2021 is of unique significance in China's modernization drive, posing the formidable yet important task of ensuring economic work is done well. In light of this, we need to implement the new development philosophy and establish the new development model adapted to the new stage, with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as our guide and adhering to the theme of progress amidst stability. This requires us to systematically consolidate and expand upon our success in containing Covid-19 and in economic and social development and to better coordinate development and security, all while upholding high-quality development, deepening supply-side structural reform, achieving reform and innovation, and meeting people's growing desire for a better life. We will also spare no effort to ensure stability on the "six fronts" (employment, the financial sector, foreign trade, foreign investment, domestic investment, and expectations) and guarantee the "six priorities" ( job security, basic living needs, operations of market entities, food and energy security, stable industrial and supply chains, and the normal functioning of primary-level governments). As long as the central authority's decisions and arrangements are thoroughly carried out in all aspects of economic work and the rationality and precision of macro control constantly improves, the 14th Five-Year Plan is sure to get off to a good start. 

Enhancing the composition of macro-policies to achieve rational economic growth 

We shall ensure macroeconomic policies are consistent, stable, and sustainable and continue with a proactive fiscal policy and prudent monetary policy to support our economic recovery. We need to raise the quality and effectiveness of our proactive fiscal policy to make it more sustainable and maintain moderate expenditure. Our prudent monetary policy should be pursued more flexibly, precisely, and rationally to enable increases in M2 money supply and aggregate financing to keep pace with nominal GDP growth and stabilize the macro-leverage ratio. Meanwhile, it is essential that we constantly improve the composition of our macropolicies based on real-life conditions through strong monitoring, forecasting, and early warnings of economic operations and preparatory research on policy options. Greater efforts will be made to manage expectations, interpret and publicize policies, and respond promptly to public concerns so as to boost the confidence of market entities.

Tourists shopping at the Sanya International Duty Free Shopping Complex in Hainan Province, October 5, 2020. With the duty free experience as its theme, the complex combines food and drink, entertainment, leisure, and shopping all in one space. To create a new development dynamic, it is essential to promote domestic demand as a key strategic goal, and to link the growth of consumption with the improvement of people's life. PHOTO BY XINHUA REPORTER GUO CHENG 

A container ship slowly docks at the Dapukou Container Terminal of Jintang Section in the port of Zhoushan near Ningbo, night of December 15, 2020. It is the first ship on the terminal's newly added line – the ZIM West Africa line. Facing a shifting global landscape, China has maintained firm commitment to expanding opening up, easing access to its market, and improving its business environment. China's efforts to become more open have injected powerful momentum into its own development as well as recovery of the global economy. PEOPLE'S DAILY / PHOTO BY YAO FENG 

Highlighting industrial policies and pursuing innovation-driven development 

In addition to building on our strengths, we will focus on shoring up weaknesses that have choked industrial development and making breakthroughs in core technologies in key fields. We will crack down on monopolies and unfair competition to consolidate the fundamental position of competition policies. Furthermore, we will implement targeted measures to promote industrial transformation and upgrading, rebuild our industrial foundations, integrate the development of advanced manufacturing with modern services, foster clusters of strategic emerging industries at the national level, and promote the digital economy. 

Fostering a robust domestic market by expanding domestic demand 

We should unlock consumption potential by combining efforts to expand consumption with improving people's life. We should also tap consumption potential at county and township levels by rationally increasing public consumption and promoting standardized and branded services, including child and elderly care and housekeeping. By optimizing investment and giving lasting impetus to investment growth, we aim to utilize the guiding and leveraging roles of central government budgetary investment to boost the development of areas that generate high social benefits and spillover effects, in the hope of stimulating investment throughout society. In addition, we will promote the completion of major projects during the 14th Five-Year Plan, increase investment into new infrastructure, step up intercity or suburban railway construction in major urban agglomerations and metropolitan areas, and renovate old and shabby urban residential complexes. 

Using all available means to stabilize and expand employment 

We will stabilize and expand employment by stimulating entrepreneurship and innovation, leveraging the role of business startups in boosting employment, and facilitating flexible employment through multiple initiatives. To bolster targeted assistance, we will carry out regular monitoring and analysis of employment of key groups, such as college graduates and rural workers. More efforts will be devoted to offering people jobs rather than handouts and creating local employment opportunities for rural workers. Moreover, we will provide workers with lifelong multi-level vocational skills training by promoting joint participation and resource sharing, which will enhance their abilities to find jobs and start businesses. 

Stimulating the market with new breakthroughs in reform and opening up 

We will promote the construction of a high-quality socialist market economy by establishing a market system with high standards, deepening reforms on the market-based allocation of factors of production, and lawfully accelerating the development of the social credit system. Further reforms of state-owned assets and state-owned enterprises should be carried out to achieve structural adjustments and an optimal layout of the state sector. We will continue to advance market-based reforms at every competitive link in sectors such as energy, railway, telecommunications, and public utilities. To improve the business development environment in the private sector and make it more market-oriented, law-based, and global, we must ease market access restrictions, promote fair competition, and protect intellectual property rights to form a large unified market. We will continue to work with others to advance the Belt and Road Initiative, including stepping up China-Europe rail freight services. We are also actively participating in reforming the systems that govern the global economy and safeguarding national security by stressing adherence to internationally accepted rules and norms. 

Expanding regional development with major strategies 

We will continue to decentralize functions away from Beijing that are not essential to its role as the capital, apply high standards in the construction of the Xiong'an New Area, and accelerate the construction of intercity and suburban railways in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area. We will replicate and promote innovations and experiences from building the demonstration zone for integrated, eco-friendly development of the Yangtze River Delta. We will prioritize the environment and promote green development in the Yangtze River Economic Belt and advance ecological conservation and high-quality development in the Yellow River basin. We will steadily promote people-centered new urbanization, upgrade the functions of large and medium-sized cities, address the problem of housing affordability, and facilitate efforts to shore up weaknesses in county towns. 

Improving the environment through stronger green development policies 

We will continue to prevent and control pollution by reducing both pollutants and carbon emissions and mitigate risks to our ecological security. We are dedicated to fulfilling the promise of bringing CO2 emissions to a peak before 2030 and achieving carbon neutrality before 2060. China is creating a market in which companies are granted annual energy allowances and able to trade emissions. We will continue to implement our work plan on energy conservation and emissions reductions during the 14th Five-Year Plan period, including reinforcing and improving regulations on total energy consumption and energy efficiency. We will press ahead with the control of plastic pollution at every link in the chain and upgrade key industries and important fields in an eco-friendly manner. We will also boost the development of clean energy, such as hydrogen energy, and renewable energy, such as hydropower, wind power and photovoltaic power, and raise the proportion of clean energy consumption. 

Standing firm on security and mitigating risks 

To ensure stable supplies of agricultural and subsidiary products, we will strengthen the system of provincial governors assuming responsibility for food security, advance implementation of the project to produce high-quality food, enhance the protection and utilization of genetic resources, and press ahead with the development of prime farmland that is highly resistant to drought and flood. To guarantee energy security, we will make energy supplies more secure, stable, and reliable and expedite the development of systems for the production, supply, storage, and sale of coal, electricity, oil, and gas. We will prevent and mitigate financial risks, handle corporate debt defaults by making use of innovations and marketbased legal measures, and prudently promote financial innovations. 

(Originally appeared in Qiushi Journal, Chinese edition, No. 2, 2021. Shortened from the original Chinese version.)