New characteristics of China’s economic development and transformation in the new era

　　[Core Aspect] The report of the 19th National Congress of the Communist Party of China puts forward new requirements for China’s economic development in the future. The main contradiction in our society has been transformed into the contradiction between the people’s growing need for a better life and the unbalanced development. Based on this transformation, we should make clear the development focus and reform orientation of building a socialist modern power. At present, China’s economic development and transformation presents a series of new characteristics. Standing at a new starting point of development, we should adhere to quality first and benefit first, take supply-side structural reform as the main line, promote quality change, efficiency change and power change of economic development, and continuously enhance China’s economic innovation and competitiveness.

　　From high-speed growth to high-quality development stage

　　The report of the 19th National Congress of the Communist Party of China made the judgment that "China’s economy has shifted from a high-speed growth stage to a high-quality development stage", which is a new major judgment in view of the new changes in the international and domestic environment, especially the new changes in development conditions, after the economic development entered a new normal. In the past 40 years since the reform and opening up, China’s economy has maintained a high-speed growth of nearly 10%, accounting for an increasing proportion of the global economy. This is mainly because the reform and opening up has formed an institutional mechanism to effectively encourage market players and make full use of international and domestic market resources, so that the "dividend" of China’s rich labor resources and high savings rate can be fully brought into play through the continuous pull of domestic and foreign demand.

　　With the continuous impact of the international financial crisis, the development environment and conditions at home and abroad have changed, and China’s economic development has entered a new normal. First, the recovery of the world economy is difficult and continues to be sluggish, and the pulling effect of external demand on China’s economy has obviously weakened; Second, the working-age population has continued to decline, and the relationship between labor supply and demand has changed. In the past 10 years, the wage level has been rising, and the cost advantage of manufacturing has rapidly weakened; Third, more emerging economies have accelerated the pace of industrialization, used their labor cost advantages to absorb manufacturing investment and joined the world market competition; Fourth, the upgrading of the domestic market demand structure has accelerated, consumers’ demand for high-quality agricultural products, manufactured goods and high-quality services has become more prominent, and the domestic supply side has not been able to meet the changes in the demand structure well, resulting in more and more high-end demand for high-quality agricultural products, high-end manufactured goods and high-quality services spilling over to overseas markets. More and more consumers in China go abroad to purchase consumer goods and high-quality food, and go abroad to study, travel and seek medical treatment.

　　The above-mentioned changes in development conditions have made China’s original growth model, which mainly relies on factor input, external demand and scale expansion, more and more obviously restricted. We must change the mode of development, optimize the economic structure, change the driving force of growth and change to high-quality development in accordance with the requirements put forward in the report of the 19th National Congress of the Communist Party of China.

　　First, the economic growth rate may gradually drop from the high-speed growth of about 9% in the past to about 6%. Mainstream research at home and abroad shows that the potential growth rate of China’s economy in the future is generally in the range of 6% to 7%. Considering that the proportion of China’s foreign trade in global trade has reached a high level, and the original low-cost competitive advantage is being lost, and considering the conditions such as the strengthening of ecological environment constraints, and the new kinetic energy formed by innovation is difficult to make an explosive breakthrough in a short period of time, it may be difficult for China’s economy to reproduce the high-speed growth in the past. It should be recognized that it is quite good to achieve a potential growth rate of 6% to 7%.

　　The second is to change to a development model that pursues high quality and high efficiency. To realize the sustained and healthy development of China’s economy, the fundamental way out is to promote the quality change, efficiency change and power change of economic development, which needs to continuously improve the quality of products and services of enterprises and improve their operating efficiency from the micro level. It is necessary to take the supply-side structural reform as the main line, accelerate the upgrading of industrial structure and the transformation of traditional industries, accelerate the development of high-quality modern service industries, increase the supply of high-end products and services, and continuously improve added value and competitiveness. Promote the development of new technologies, new products and new formats through innovation, especially by promoting the deep integration of the Internet, big data, artificial intelligence and the real economy, and promote cross-border integration and innovation, so that the potential and new kinetic energy formed by innovation and entrepreneurship will become an inexhaustible driving force for China’s economic growth and continuously enhance the innovation and competitiveness of China’s economy.

　　The third is to accelerate the market-oriented reform that is conducive to the market to play a decisive role in resource allocation. In pursuit of high quality and high efficiency, we must persist in giving full play to the decisive role of the market in resource allocation and reduce the government’s intervention in market resource allocation. It is necessary to further deepen the reform of the economic system, adhere to the orientation of marketization, speed up the construction of a market economic system with effective market mechanism, dynamic micro-subjects and moderate macro-control, give enterprises greater autonomy in investment and management decision-making, give full play to and stimulate the innovation power and creativity of market subjects, improve the efficiency of enterprise resource allocation from a micro perspective, and lay a foundation for improving the efficiency of resource allocation in the whole society from a macro perspective.

　　Building a modern economic system is a strategic goal.

　　According to the report of the 19th National Congress of the Communist Party of China, China’s economy has changed from a high-speed growth stage to a high-quality development stage, and it is in the key period of changing the development mode, optimizing the economic structure and transforming the growth momentum. Building a modern economic system is an urgent requirement for crossing the barrier and a strategic goal for China’s development. Building a modern economic system is a brand-new expression, and its main connotation is:

　　First, adhere to quality first and benefit first, take supply-side structural reform as the main line, vigorously promote quality change, efficiency change and power change of economic development, and strive to improve total factor productivity. After nearly 40 years of reform and opening up, China’s GDP has ranked second in the world, and the production scale of more than 220 major industrial products ranks first in the world. However, the problems of low quality and efficiency and weak growth momentum have become increasingly prominent. To change this situation, we must aim at improving quality and competitiveness, give full play to the decisive role of the market in resource allocation, encourage scientific and technological innovation and entrepreneurial innovation more effectively, accelerate the upgrading and efficiency improvement of traditional industries, improve the quality of products and services on the supply side, better meet the upgrading of domestic consumption structure, and achieve a higher quality and level of dynamic balance between supply and demand.

　　The second is to speed up the construction of an industrial system in which the real economy, scientific and technological innovation, modern finance and human resources develop in coordination. Accelerating the development of the real economy is an important task of building a modern economic system and the focus of economic development. We should focus on the real economy, accelerate the construction of a manufacturing power, and take the road of coordinated development and mutual support among the real economy, scientific and technological innovation, modern finance and human capital. In this process, it is necessary to strengthen the supporting role of scientific and technological innovation in the real economy, especially in advanced manufacturing, and give full play to the role of the state in basic research and applied basic research in technological innovation; Strengthen the service function of finance to the real economy, and provide efficient, convenient, reasonable and diverse financing services for the real economy, especially direct financing services such as venture capital and equity investment; Strengthen the cultivation of human capital and provide more labor with higher professional quality and skills for the upgrading of the real economy.

　　The third is to speed up the construction of a market economic system with effective market mechanism, dynamic micro-subjects and moderate macro-control. Effective market mechanism is to improve the socialist market economic system, focus on improving the property rights protection system and the market-oriented allocation of factors, and achieve effective property rights incentives, free flow of factors, flexible price response, fair and orderly competition, and survival of the fittest. This is the necessary institutional guarantee for achieving high-quality and high-efficiency growth. The vitality of micro-subject means to respect the dominant position of enterprises, continue to deepen the reform of commercial system, fully implement the negative list system of market access, implement the autonomy of enterprise management decision-making, deepen the reform of state-owned enterprises, support the development of private economy, and cultivate more world-class enterprises with global competitiveness. The core of moderate macro-control is to innovate and improve macro-control, give play to the strategic guiding role of national development planning, and improve the coordination mechanism of financial, monetary, industrial and regional economic policies. When implementing macro-control, the government should conform to the laws of the market, grasp the boundaries and relations between the government and the market, and do not be absent or offside, so as to better play the role of the government.

　　Deepening supply-side reform is the fundamental solution.

　　Deepening the structural reform of supply side is the key task of building a modern economic system, which is the fundamental solution to the structural problems existing in the supply side of China’s economy.

　　The contradiction between the irrational supply-side structure of China’s economy and the failure to meet the upgrading of domestic demand structure is more prominent. In recent years, the supply-side structural reform with the emphasis on de-capacity, de-inventory, de-leverage, cost reduction and short-boarding has achieved positive results, but overall, the supply of high-quality products and services in China still does not meet the requirements of demand upgrading and refinement, and the industrial competitiveness needs to be further improved. Therefore, we must focus on the real economy, especially the manufacturing industry, take improving the quality of the supply system as the main direction, continue to deepen the structural reform of the supply side, improve the quality of the stock supply, and expand the high-quality incremental supply.

　　It is necessary to encourage all walks of life to carry out quality improvement actions and continuously enhance the quality advantage of the economy. Accelerate the development of advanced manufacturing and modern service industries, cultivate a number of world-class advanced manufacturing clusters, and promote China’s industries to move towards the middle and high end of the global value chain. Focusing on the middle and high-end consumer demand, we will cultivate new growth points and form new kinetic energy in the fields of innovation-led, green and low-carbon, sharing economy, modern supply chain and human capital services, promote the deep integration of the Internet and the real economy, and give better play to the integration and innovation effects of big data, cloud computing, artificial intelligence and the real economy. Support the optimization and upgrading of traditional industries, aim at international advanced standards to improve product technology, process equipment, energy efficiency and environmental protection, improve product quality and added value of traditional industries, especially strengthen high-end manufacturing capabilities in the fields of basic processes, basic materials and basic components. In addition, we will continue to strengthen the construction of infrastructure networks such as water conservancy, railways, highways, water transport, aviation, pipelines, power grids, information, logistics, etc., strengthen the interconnection and convergence between infrastructure networks, and give full play to the integrated service effect and support for the real economy.

　　We must continue to adhere to de-capacity, de-inventory, de-leverage, reduce costs, make up shortcomings, optimize the allocation of stock resources, and expand high-quality incremental supply. It is necessary to improve the real estate control measures and optimize the supply structure of the real estate market. Further measures should be taken to reduce the overall debt leverage ratio, especially to effectively control the debt risk of local governments. In terms of making up the shortcomings, it is necessary to strengthen the prevention and control of the discharge of important pollutants in key areas and focus on solving outstanding environmental problems. Further improve the long-term mechanism for poverty alleviation, adhere to precise poverty alleviation and precise poverty alleviation, complete the poverty alleviation goals and tasks that have been clearly defined, and achieve poverty alleviation and poverty alleviation. In addition, based on the long-term, we should strengthen the short-board construction, including insufficient innovation ability, inefficient financial services, imperfect social security system, insufficient maintenance of unified market and insufficient accumulation of human capital, invest resources, improve systems and mechanisms, and prevent short-board from becoming a constraint to sustained and healthy economic development.

　　Entrepreneurs are the main force to promote supply-side structural reform, revitalize the real economy, and also promote innovation and development. We should better stimulate and protect entrepreneurship, stabilize entrepreneurs’ long-term expectations, and support entrepreneurs to innovate and start businesses, so that they can be rooted in the long-term development of China’s economy. High-quality development is inseparable from high-quality workers. It is necessary to increase the cultivation of human capital, build an army of knowledge-based, skilled and innovative workers, promote the spirit of model workers and craftsmen in the whole society, form a glorious social fashion of labor and a professional atmosphere of Excellence, and improve the economic and social status of ordinary workers. (The author is Xu Lin, director of China City and Small Town Reform and Development Center)