China last month wrapped up a key economic conference that aimed to chart course for the country’s economy in 2020, a crucial year marking the completion of the country’s 13th Five-Year Plan and the building of a moderately prosperous society in all respects.

Chen Yuyu, applied economics professor with Peking University’s Guanghua School of Management, offered his own interpretations of the signals sent from the meeting.

According to estimates from various institutes and economists, the Chinese economy will maintain a growth of around six percent, and it is very likely to keep above six percent. However, Chen stressed that the figure itself is not that important compared with the country’s abilities to overcome both short-term economic problems and long-term issues that hold back economic growth through reforms.

STRUCTURAL, INSTITUTIONAL, CYCLICAL ISSUES

The meeting highlighted six major economic tasks set for 2020, with “unswervingly putting into practice the new concepts of innovative,coordinated, green, open and inclusive development to promote high-quality development” listed at the top. According to Chen, this is crucial for the country’s economy to maintain growth amid short-term difficulties and is also in line with the policy of deepening supply-side structural reform that has been long underscored.

Chen highlighted part of the statement released after the meeting saying that China is at a pivotal stage of transforming its growth model, improving its economic structure,and fostering new drivers of growth amid intertwined structural, institutional and cyclical problems. Under the influence of these problems, China faces rising downward economic pressure.

“That is an accurate analysis of the country’s current economic situation,” Chen said, adding that it will help the country map out more flexible and pertinent measures to reduce potential risks. Consequently, a series of problems emerging over the past few years need to be addressed, including overly fast growth of debts. Such measures include reduction of tax and fees, improvement of business environments and the release of negative lists, along with proactive fiscal policies and flexible, steady monetary measures.

“If the Chinese economy doesn’t encounter new risks and the world economy isn’t plagued by new conflicts and worse downward pressure, all these measures will effectively guard China’s economy against the downward pressure resulted from intertwined structural, institutional and cyclical problems,” said Chen.

MORE REFORM MEASURES

According to the statement, the country will unleash development potentials that have been dormant so far through deepened reforms. Calling it an exciting wording, Chen noted that China usually started with low standards and poor environments and can only through deepened reforms can it figure out effective ways to improve and progress in a given situation.

“Reforms will help eliminate the parts that are incompatible with the country’s economic development and unleash potential for its hundreds of millions of citizens to actively pursue better living,” Chen said, adding that more reform measures will be introduced in the new year to cope with short-term problems and maintain the Chinese economy’s long-term vigor.

Chen cited further reform of state-owned enterprises, strengthened legal framework to protect and boost privately-owned businesses and better opening-up among possible upcoming reforms that will see to fairer treatment of foreign businesses in China and better support of the country’s medium- and small-sized companies.

“These measures will make the Chinese economy more inclusive and sustainable, and its development will more directly benefit ordinary people,” said Chen, adding that China, while consolidating deleveraging achievements amid financial risks over the past several years, will also address some “structural deviations” emerging during the process in 2020.