On July 6, the Institute for Advanced Research of Shanghai University of Finance and Economics released the 2022 Mid-Year Report of China’s Macroeconomic Analysis and Forecast online in Shanghai. With the theme of “Deepening reform and opening up with greater efforts to stabilize the economy”, the report analyzed the macroeconomic situation in China in the first half of the year under the complicated international and domestic situations such as the intensification of geopolitical conflicts, the rising risk of global stagflation and the recurrence of the COVID-19 epidemic and examined how China’s economy can cope with the new downward pressure and truly achieve the goal of stabilizing the economy in the short term and sustainable high-quality development in the medium and long term.
Invited guests included Songcheng Sheng, the former director of the Statistics and Analysis Department of the People’s Bank of China; Kaiyan Shen, Dean of the Institute of Economics, Shanghai Academy of Social Sciences; Professor Jian Wang from the School of Management and Economics of the Chinese University of Hong Kong, Shenzhen; Ting Lu, Chief China Economist of Nomura Holdings; Wenlong Li, Chief Economist of Pan-Asia Research Institute of Digital Economy and Dean of the Research Institute for ASEAN Economy; and Qiu Zhang, General Manager of Shanghai Chang Yuan Investment Management Ltd.
Professor Tian Guoqiang, Dean of IAR and the Principal Investigator of “China’s Macroeconomic Analysis and Forecast” project, and Professor Xiaodong Huang, Chief Expert of the project as well as the other members of the team attended the conference. An audience of over 18000 people from financial institutions, media, and other industries attended the conference on various platforms including the livestreaming and WeChat video of China Financial Information Centre of Xinhua News, bilibili livestreaming, and Zoom conference. The conference was hosted by Liguo Lin, Vice Dean of IAR. Yuanchun Liu, President of SUFE, gave the opening speech.
Guoqiang Tian gave a brief introduction the China Macroeconomic Analysis and Forecast Project and the 2022 mid-year report. The report covered 15 fields and industries including not only the normal ones but also digital economy, education, environment, and added new content on the welfare estimation of green finance and green transformation.
According to the estimation of the project team, under the benchmark scenario, the actual annual GDP growth rate of 2022 is about 4.3%, CPI growth rate 2.1%, PPI growth 6.4%, GDP Deflator growth 3.4%, consumption growth 1.8%, investment growth 6.2%, export growth 9.5%, import growth 5.7%, and CNY/USD exchange rate will demonstrate a wide-range two-way fluctuation around 6.8. Given the various factors affecting the forecast result and accuracy, such as policy tool variants, economic fluctuations, and incidents like the recurrent epidemic, strengthening policies, rising default risks of private enterprises, etc., the project team presented 7 different assumption scenarios and conducted simulation analysis on the adjustments to financial or monetary policies comparing with the benchmark scenario in order to achieve 5% economic growth. The team not only gave short-term policy suggestions but also medium- and long-term suggestions on reform and governance with due attention to the fundamental institutional arrangements that affect economic development. Based on the analysis of the current macroeconomic situation in China and the main internal and external risks and uncertainties, Prof. Tian discussed how China can achieve greater reform and opening up to stabilize the economy in the short term and sustainable high-quality development in the medium and long term, and mainly analyzed the misconceptions in the construction of a large national unified market and corresponding reform measures.
Then, Professor Xiaodong Huang, the Chief Expert of the project team, gave a detailed interpretation of the 2022 Mid-Year Report of China’s Macroeconomic Analysis and Forecast. He pointed out that since 2022, under the complicated international and domestic situations such as intensified geopolitical conflicts, rising risk of global stagflation and recurrence of the COVID-19 epidemic, the risks and uncertainties faced by China’s economy have increased, causing the macro economy to temporarily deviate from the normal growth trajectory in the first half of the year, confronting the economy with major risks including increased pressure on debt servicing of real estate enterprises, difficulties in the operation of small and medium-sized enterprises, rising scale of local government debt, risk exposure of financial institutions, disruptions in the supply chain of industrial chains and their “internal shrinkage and external migration”, and the occasional recurrence of epidemics, posing challenges for the realization of the development goals of the year. However, China’s economic development is resilient and promising, and the favorable factors and conditions supporting the economic operation are relatively solid, market confidence has rebounded (including business confidence, investment confidence and stock market rebound), and the fundamentals of good long-term economic development remain unchanged. Looking ahead to the second half of the year, with the effective prevention and control of the epidemic, the gradual emergence of the stimulus effect of the macro policy package and the full implementation of the “14th Five-Year Plan”, China’s economy will release its huge growth potential and the annual economic growth rate is expected to stabilize in a reasonable range.
After the report release, the guest speakers respectively commented on the mid-year report.