China's macroeconomic policy is facing readjustment and revision

According to a report released on May 18 by the National Development and Strategic Research Institute of Renmin University of China, the macroeconomic data in April will lead to readjustment and revision of China's macroeconomic policies, and the continuation of the previous "six stability" policy should be the basic starting point for policy formulation in the next stage.

Data from the National Bureau of Statistics show that in April, the national consumer price (CPI) rose by 2.5% year-on-year, 0.2% higher than last month; the value-added of industries above scale increased by 5.4% year-on-year, down by 3.1 percentage points from March; the total retail sales of social consumer goods increased by 7.2% year-on-year, down by 1.5 percentage points from last month; and the export growth rate was -2.7% year-on-year and the former value was 14.2%. From January to April, the national fixed assets investment (excluding farmers) increased by 6.1% year-on-year, the growth rate dropped by 0.2 percentage points compared with January to March, the private fixed assets investment increased by 5.5% year-on-year, and the growth rate dropped by 0.9 percentage points compared with January to March.

"The macroeconomic data in April provide an important window for the adjustment and revision of China's macroeconomic policies," Wang Jinbin, executive Vice-Secretary and Vice-President of the Institute of National Development and Strategic Studies, Renmin University of China, said at the meeting, "The declining PMI in April, the weak import and export data, and the rising CPI show that the domestic demand is insufficient and the external demand exists. Major uncertainties."

China's economy grew by 6.4% in the first quarter of this year. In this context, on April 19, the Political Bureau of the Central Committee of the Communist Party of China (CPC) put forward "six new articles", namely "steady growth, promoting reform, restructuring, benefiting people's livelihood, preventing risks and maintaining stability", without mentioning "six stability" - stable employment, stable finance, stable foreign trade, stable investment and stable expectations. "Six Stabilities" was proposed by the Political Bureau Meeting of the CPC Central Committee on July 31, 2018. The National Development Institute of the People's Congress believes that the continuation of the "six stability" policy in the early stage should be the basic starting point for the formulation of China's macroeconomic policies in the next stage. Through measures such as "stabilizing the stock market" to stabilize expectations and confidence, continue to promote financial supply-side reform; continue to implement active fiscal policies to strengthen the livelihood function of finance; hedge the decline of Sino-US trade through diversification of exports; continue to accelerate the real landing of the opening policy and attract foreign capital.

The NPC National Development Institute pointed out in its report that looking forward to the future, China's economy still faces seven major uncertainties. First, the variables of Sino-US trade negotiations further increase the uncertainty of external market demand. Second, whether the sustained large-scale fiscal deficit of local governments can be sustainable. Thirdly, consumption growth declined significantly in April, and the sustainability of consumption growth is uncertain. Fourthly, the growth rate of industrial added value above scale has slowed down significantly over the same period of last year, and the growth rate of industrial added value in the future is uncertain.

It is uncertain that real estate investment is used to sustain marginal investment growth. From January to April, the national real estate development increased by 11.9% year-on-year, which lasted for the first quarter. However, "From January to April, the land acquisition area of real estate development enterprises declined, and the land turnover also declined." Wang Jinbin pointed out. It is uncertain whether the increase of direct financing ratio brought about by the reform of financial supply side will be reversed. Seventh, even if the scale of social financing was revised again in May, there is still some uncertainty about hedging the problem of foreign demand.