Liu Wei: An Outlook of China's Economic Development in the Context of COVID-19 Epidemic

Liu Wei, President of Renmin University of China

Facing up to the problem: The epidemic will exert a huge impact on China's economic growth

First of all, we must have a scientific judgment and a clear understanding of the serious impact of the epidemic on China's economic growth. The tertiary industry is the first to bear the brunt, especially during the Spring Festival, which saw a slump in consumption. Therefore, a basket of macro-economic policies to change the regulation methods are in need to promote China's economic development for "steady growth".

Seeking progress while ensuring stability: Fight to win the war against the epidemic and stabilize economic development

At the recent meeting to advance the work on coordinating the prevention and control of the COVID-19 and economic and social development, General Secretary Xi Jinping clearly put forward the requirement that: on the one hand, we should proceed with confidence to fight and win this people's war, this general war, and this blocking war against the epidemic to resolutely curb its spread; on the other hand, we should realize the economic and social development goals in an all-round way. At the meeting, Xi put special emphasis on stabilizing employment, finance, foreign trade, foreign capital, investment, and expectations (“six stabilities”).

Proceeding with confidence: All favorable conditions will foster China's economic growth

We believe the goal of economic growth can be realized from the perspective of a more macroscopic context of development. First is the opportune time that China is at an important stage of rapid development or sustained high-speed growth.

Second is geographic advantage that China enjoys vast territory, great potential, high toughness and large market size. It not only lies in investment scale as well as investment demand in capital constructions and infrastructures. With regard to consumption since 2019, the total volume of retail sales of domestic consumer goods has exceeded that of the United States, hitting about USD 7 trillion, making China the largest domestic consumption market in the world. Such a great marketing potential, especially in terms of domestic demand, has laid the foundation for China to expand domestic demand.

Last is unity of the people. Over the past 40 years of reform and opening up, our system has undergone great changes which are demonstrating the advantages of liberating and developing productive forces. China's productive forces have achieved great progress and development in years of reform and opening up, proving the advantages of China’s basic economic system.

Xi has put forward the general guideline of seeking progress while ensuring stability. "Stability" means, first of all, economic growth, which should be maintained at a proper speed since achieving balanced growth is an important basis to realize the targets of economic and social development. We need to adopt a series of macro policies, including demand and supply management, fiscal and monetary policies, aggregate and structured regulation, to ensure the "six stabilities". At the same time, we should seek "progress" by deepening structural reform on the supply side to promote technological and institutional innovations.

Therefore, although the new normal has undergone great changes and poses great challenges to us, especially the outbreak of the COVID-19 epidemic this year, which has had severe adverse effect on economic growth, we are confident of overcoming these difficulties and achieving the goals of economic and social development by virtue of opportune time, geographic advantage, and unity of the people.