Socialism with Chinese Characteristics Enters a New Era

Chapter VIII: The New Normal of Economic Development and Achieving High-Quality Development

Since the 18th National Congress of the Communist Party of China, the Party Central Committee with Comrade Xi Jinping as the core has taken charge of the general trend of domestic and foreign development, grasped the new characteristics and new requirements of China’s economic development, and clearly put forward a series of new concepts, ideas and strategies such as China’s economic development entering a new normal, adhering to the supply-side structural reform as the main line, accelerating the construction of a modern economic system, and promoting high-quality economic development, effectively leading the overall situation of China’s economic development in the new era and ensuring sustainable and healthy economic and social development. It has become an important content of Xi Jinping’s socialist economic thought with Chinese characteristics for a new era.

Section 1: Economic development has entered a new normal

Clarifying that China’s economic development has entered a new normal is a major judgment made by the Party Central Committee with Comrade Xi Jinping as the core by comprehensively analyzing the long-term cycle of the world economy and the phased characteristics of China’s development and their interaction. To plan and promote China’s economic and social development in the new era, we must adapt to the new normal, grasp the new normal, and lead the new normal as the general logic that runs through the overall development and the whole process.

1. deeply understand the scientific connotation of the new normal of economic development

Scientific understanding of the current situation and accurate study and judgment of future trends are the prerequisites for doing a good job in economic work.

In the face of the continuous downward trend of China’s economic growth rate after the international financial crisis in 2008, and the situation of “three-phase superposition” of the growth rate shift period, the painful period of structural adjustment, and the digestion period of the previous stimulus policy, Comrade Xi Jinping scientifically analyzed the new characteristics of economic development in stages, clearly pointed out that China’s economic development has entered a new normal, showing new characteristics different from the past, and providing a fundamental basis for formulating economic development strategies and policies in the new era. Economic development has entered a new normal, which is an inevitable reflection of the phased characteristics of China’s economic development. Comrade Xi Jinping used the “nine looks” to summarize the trend changes in China’s economic development. (1) From the perspective of consumer demand, consumption has changed from imitation wave consumption to personalized and diversified consumption. (2) From the perspective of investment demand, investment in traditional industries and real estate is relatively saturated, and investment opportunities in new technologies, new products, new formats and new business models have emerged. (3) From the perspective of exports and the balance of payments, the comparative advantage of low-cost exports has been transformed, and it is urgent to cultivate new comparative advantages, and the situation of double surplus in the balance of payments is developing in the direction of basic balance of balance of payments.

(4) From the perspective of production capacity and industrial organization mode, the supply capacity of traditional industries greatly exceeds demand, the problem of overcapacity is prominent, the industrial structure must be optimized and upgraded, and production miniaturization, intelligence and specialization will become the new characteristics of industrial organization. (5) From the perspective of the comparative advantages of production factors, the low-cost advantage of labor is weakening, and economic growth will rely more on the quality of human capital and technological progress. (6) From the perspective of market competition characteristics, it is gradually shifting from quantitative expansion and price competition to quality-based and differentiated-based competition. (7) From the perspective of resource and environmental constraints, the environmental carrying capacity has reached or is close to the upper limit, and it is necessary to promote the formation of a new way of green and low-carbon circular development.

(8) From the perspective of economic risk accumulation and resolution, all kinds of hidden risks are gradually becoming apparent, and the bottom line of no systemic risk must be guarded. (9) From the perspective of resource allocation mode and macro-control mode, the marginal effect of comprehensive stimulus policy is significantly reduced, and it is necessary to give play to the decisive role of the market in resource allocation and scientifically carry out macro-control. The above nine trend changes are not only the external characteristics of the new normal, but also the internal driving force of the new normal, which are reconstructing the growth model, power structure, industrial structure and factor structure of China’s economic development, and promote China’s economic development under the new normal to show growth rate changes, development mode changes, economic structure optimization, New features of growth dynamics conversion. First, the growth rate has changed, from high speed to medium and high speed.

The change in the speed of economic growth not only reflects the objective trend of economic growth, but also reflects the new orientation of China’s macro-control goals. Generally speaking, catch-up economic development in post-developing countries goes through three stages. The first phase usually has a faster growth rate. The reason is that the industrial space is large, it can be imitated development, the pressure on resources and environment is not large, there is abundant and low-cost labor, the base of 61* is small, and the growth space is large. In the second stage, the conditions for rapid development no longer exist, the industrial space is relatively saturated, the effect of imitation development decreases rapidly, the pressure on resources and environment increases, labor costs increase, economic scale increases, and the economic growth rate is bound to slow down. But this is not a step backwards, but a step forward, and the key task of this period is to explore new sources of economic growth by encouraging innovation, with a focus on improving quality and efficiency. In the third stage, it is close to or reaches the level of developed countries, and the economic development rate slows down and is basically stable. The reason for this is that the scale of the economy continues to grow, the industry is fine, and the new comparative advantage depends mainly on human capital and science and technology, rather than on natural resources and cheap labor. The new normal of China’s economic development corresponds to the second stage, and the change in growth rate is a natural reflection of the development stage. The second is the transformation of development mode, from scale and speed to quality and efficiency. Economic growth is no longer simply about heroes /^, and no longer simply about good or bad in terms of speed. It is not that the economic development rate is higher and the situation is “very good”; nor is the economic development speed lower that the situation is “very bad.” Economic development should focus on improving quality and efficiency, and realize that investment has returns, products have markets, enterprises have profits, employees have income, the government has taxes, and the environment has improved. Economic development relies more on efficiency improvement, including improving labor efficiency, capital efficiency, land efficiency, resource efficiency, environmental efficiency, contribution rate of scientific and technological progress, total factor productivity, etc., and gives play to the multiplier effect of data on the efficiency of other factors.

The third is the optimization of the economic structure, from mainly incremental capacity expansion to adjusting the stock and doing the same as the optimization of increment. In terms of demand structure, the role of consumer demand in economic growth has become increasingly prominent, and personalized, diversified, quality consumption, online shopping, customized consumption and other ways have developed extensively, bringing new development opportunities; In terms of industrial structure, the service industry has developed rapidly, and the contribution rate of China’s service industry to economic growth has approached 60% in 2018; in terms of urban and rural structure, the urbanization process has continued to advance, and the urbanization rate reached 59.. in 201858%;

In terms of regional structure, the central and western regions have shown strong development potential, and the implementation of regional development strategies such as the “Belt and Road” construction, the coordinated development of Beijing-Tianjin-Hebei, the construction of the Yangtze River Economic Belt, the regional integration of the Yangtze River Delta and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area has continuously expanded new space for regional development.

The fourth is the transformation of growth momentum, from mainly relying on factors such as resources and low-cost labor to relying more on innovation-driven transformation. At present, China’s scientific and technological innovation ability is constantly improving, some important fields are among the world’s advanced ranks, and are changing from “followers” to “parallelists” or even “leaders”, and the innovation of industries, products, production methods, industrial organizations, business models, management systems and other aspects continues to deepen. At the same time, the world is facing a new round of scientific and technological revolution and industrial transformation, which not only brings great challenges to China’s development, but also provides China’s development with a major historical opportunity to catch up with and surpass developed countries. Under the new normal, it is necessary to create a new growth cycle by vigorously implementing the innovation-driven development strategy, creating a new engine for development and cultivating new impetus for development.

The new normal is a new theoretical summary made by the Party Central Committee on the current phased characteristics of China’s economic development, with definite theoretical connotation and clear practical requirements, and this concept cannot be generalized and abused, let alone arbitrarily labeled on other issues in other fields. It is necessary to scientifically understand its connotation and accurately define its extension. Comrade Xi Jinping clearly pointed out: “In understanding the new normal, we must accurately grasp the connotation and pay attention to overcoming several tendencies. First, the new normal is not an event, and don’t judge it by good or bad. “The new normal is an objective state, a state that will inevitably appear at this stage of China’s economic development, an internal inevitability, there is no distinction between good and bad, we must plan according to the situation, move according to the situation, and advance according to the situation.” Second, the new normal is not a basket, don’t put everything in it. The new normal is mainly manifested in the economic field, do not abuse the concept of the new normal, make a lot of ’new normal’, what cultural new normal, tourism new normal, urban management new normal, etc., and even classify some bad phenomena into the new normal. Third, the new normal is not a safe haven, don’t attribute the work that is difficult or difficult to do well to the new normal, it seems that there is a reason not to solve it if it is pushed to the new normal. The new normal is not to do nothing, not to do not develop, not to do not want GDP growth, but to better use subjective initiative and more creative spirit to promote development. ”1