The current interpretations of the "package of incremental policies" vary, with some being superficial, others unprofessional, and some even misinterpreted. It is necessary to clarify these issues to guide all parties in correctly understanding the spirit of economic work.
Firstly, the "package of incremental policies" represents a systematic deployment at the macro level. If one interprets the press conference on October 8th purely from a technical policy perspective, it would lead to a biased viewpoint.
Secondly, macroeconomic regulation is not limited to fiscal and monetary policies. The requirement for consistency in the direction of macro policies is no longer confined to the pre-policy stage but is now applied throughout the entire process of policy formulation and implementation. This is a significant change, implying that there is much more room for correction in policy operations.
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Thirdly, when examining policies, one should not focus solely on the numbers. It is important to consider the perspective of the "policy demander" to determine the intensity, timing, and steps of policy implementation. Incremental policies will include new investments, and patience is advised.
Fourthly, one must also look at some key major moves in policy. The acceleration of the Private Economy Promotion Law will be a symbolic event; for instance, the new urbanization, with 170 million people settling down, will have a significant supportive effect on real estate, investment, and consumption, yet professional analysis in this area is noticeably lacking.
Fifthly, more incremental policies are on the way. There is reason to anticipate the strength and sustainability of subsequent policies.
Currently, the Chinese economy is at a crucial juncture. There are many interpretations of the "package of incremental policies," with some being superficial, others unprofessional, and some even misinterpreted. It is necessary to clarify these issues to guide all parties in correctly understanding the spirit of economic work.
Firstly, the "package of incremental policies" is a systematic deployment at the macro level. The press conference held by the National Development and Reform Commission on October 8th was essentially the core content studied at the State Council's executive meeting on September 29th. It was revised during the holiday according to the spirit of the meeting and presented as a comprehensive plan. Its starting point is to implement the spirit of the Central Political Bureau meeting on September 26th, proposing a policy framework for the economic sector to respond to the current situation. It should not be seen as merely an introduction to the specific work of a single department. The combination of five aspects has an internal logic: macroeconomic regulation and countercyclical adjustment are the overall requirements, expanding domestic effective demand is the main direction, increasing assistance and support for enterprises creates a favorable environment, promoting the stabilization of the real estate market addresses the greatest risk, and boosting the capital market is the key to expectations. Some policies propose directions first, followed by detailed measures from the departments responsible for implementation. Therefore, interpreting the October 8th press conference purely from a technical policy perspective would lead to a biased viewpoint.
Secondly, macroeconomic regulation is not limited to fiscal and monetary policies. China's macroeconomic governance follows a "1+2+6" framework (that is, with national development planning as the strategic orientation, fiscal and monetary policies as the main means, and employment, industry, investment, consumption, environmental protection, and regional policies closely coordinated). After policies are introduced in the financial sector, other areas must follow suit. Market observations of macroeconomic regulation often focus on analysis articles from financial institutions that are more vocal. Since the vast majority of analysts do not have direct experience in macroeconomic regulation, they tend to provide opinions limited to the financial sector's perspective. At the macro level, the issues to be considered are much more complex. For example, the requirement for consistency in the direction of macro policies is no longer limited to the pre-policy stage but is now applied throughout the entire process of policy formulation and implementation. This is a significant change, implying that there is much more room for correction in policy operations, and policy judgment and adjustment will be more closely linked with actual effectiveness.Thirdly, when examining policies, one cannot solely focus on numbers. Some policies can be quantified, while others cannot. The term "X trillion" may be vivid and appealing, and people tend to desire higher figures, but such policies have specific scopes of application, and it is not possible to only discuss these numbers at every press conference. This is because economic policies are not merely a game of numbers. There is a rhythmic discourse that deliberately uses numbers to raise expectations and then frequently claims "not meeting expectations." This is actually a tactic to collude with short-sellers, manipulating the market through emotional fluctuations for profit. It is essential to discern such tactics. Of course, policymakers must also consider market sentiment and determine the intensity, timing, and steps of policy implementation from the perspective of "policy demanders." We believe that the increment will definitely include new investments, and "X trillion" will certainly be there. However, some may still need to go through legal procedures, so everyone should be patient and not be easily swayed by the rhythm.
Fourthly, when looking at policies, one should also consider some key major moves. Some policies can directly mobilize huge funds, while others, although not involving investments, are invaluable. For example, regarding the development environment of the private economy, this time it was emphasized, and for issues such as "unauthorized enforcement in different places" and "profit-driven enforcement" that entrepreneurs have strongly reflected, not only were they not avoided, but it was also stated that "supervision will be carried out when necessary." This shows the central government's attitude. Next, it is believed that the Private Economy Promotion Law will be introduced more quickly, which will become a symbolic event. Its significance for the economy is no less than "X trillion." Furthermore, new urbanization is a typical issue that the official sector pays more attention to while market institutions care less about. Although the current urbanization is difficult to replicate the growth-driving effect of the past, the settlement of 170 million people will still have a significant supporting effect on real estate, investment, and consumption. This is a major move released by economic work, and professional analysis is currently significantly lacking.
Fifthly, more incremental policies are on the way. The financial sector's press conference on September 24th sounded the bugle for this round of regulation, the Central Political Bureau meeting on September 26th issued a general mobilization order, the State Council's executive meeting on September 29th made a systematic deployment, and the National Development and Reform Commission's press conference on October 8th introduced a package of policies. When looking at these meetings, it is essential to view them in sequence rather than in isolation. It can be clearly said that this is just the beginning, a general signal issued by the central government in economic work, and we will definitely see various departments introduce policies conducive to the economic recovery and improvement in line with their responsibilities. Similarly, various localities will quickly follow suit, truly turning the central government's decision-making and deployment into conscious actions in various places, and making the promotion of sustained economic recovery and improvement the top priority at present. Issues of concern to some localities, such as local debt risks, will also be gradually resolved through strong measures. Therefore, one can look forward to the intensity and continuity of subsequent policies.
Based on the economic operation in the fourth quarter, the Central Economic Work Conference in December will also make arrangements for the economic work of the following year, which is also worth looking forward to. Most importantly, next year is also the year for formulating the "15th Five-Year Plan." In combination with medium and long-term development needs, a large number of major projects, major projects, and major policies will also be launched. The close integration of short-term and medium to long-term is an important characteristic of China's economy, and the "increment" brought by the "15th Five-Year Plan" will be an important support for the stable and good development of China's economy in the next step. Economic work should also be analyzed and grasped from such time nodes to analyze and grasp trends.