In the next 5 to 10 years, three challenges need attention

  What challenges will China’s economy encounter in the next 5 to 10 years? I think there are three challenges that require great attention, and these three challenges will also bring about changes in the pattern.
  The first challenge is how to strengthen exchanges with the world economy in the context of economic transformation and continuous economic growth. In addition to exchanges of technology and talents, it should also strengthen exchanges at the humanistic level. China is already the world’s second largest economy and has great potential for economic growth. At present, there is external pressure on the level of talents and technology. How to resolve and guide such international sentiment is very important for future economic development.
  The second challenge is that after more than a decade of rapid economic growth, China’s economy needs to undergo in-depth adjustments. However, it is necessary to fully understand the unconventional policy operations adopted in response to crises or emergencies and to make a policy return. Preparation.
  For example, the 2008 global financial crisis was an important node in China’s economic macroeconomic policy. In order to stimulate the economy, a 4 trillion plan was introduced. In addition, under the impact of the new crown epidemic in 2020, the macroeconomic policy also focused on the “six guarantees and six guarantees”. “Stability”, but these policies will eventually return to normalization, and the economy needs to recuperate. A typical problem brought about by short-term stimulus in response to shocks is debt. Now that the debt ratio of enterprises is relatively high, and local government debt is also at a high level, the next step of macroeconomic policy is how to resolve these risks. Without debt restructuring, China’s economy will encounter headwinds.
  The third challenge is that with the rapid development of the economy, various social problems and social contradictions have gradually emerged. It takes time to alleviate these problems and contradictions, but it is also necessary to find a fundamental solution, that is, to find a mechanism for solving major problems.
  In my opinion, there are currently three social problems that need to be resolved as soon as possible.
  The first problem is the aging of the population. China has entered a stage of population aging. China’s 18 to 60-year-old labor force reached its peak in 2015. The aging of the population and the decline in the absolute number of laborers are a major trend that cannot be reversed, but there must be a response mechanism.
  To deal with the aging population, I think there are two main ways. One is to increase the fertility rate and subsidize the childbirth costs of women who give birth; the other is to implement flexible retirement and increase the retirement benefits of delayed retirees.
  The most effective way to increase the fertility rate is to help women who are willing to have children, especially professional women, to reduce the cost of childbirth. Many professional women worry that having children will affect their work and delay or not want children.
  To solve the problem of population aging, in addition to solving the problem of fertility, we must also consider the problem of delayed retirement. The current retirement age is 55 for female employees and 60 for male employees. However, as the overall health of the population rises, it is necessary to provide a flexible retirement system for those who are in good health and are willing to continue working.
  The second social contradiction is the economic “southern priority and north lighter”. The economy in the south is relatively active, and the population flows out from the north, including the northeast. To curb the trend of rapid economic downturn in areas where the population flows out, it is necessary to support the corresponding industries in the regions and help these regions attract industries that meet long-term comparative advantages and competitive advantages. For example, the equipment manufacturing industry in the Northeast still has development potential. This is a very realistic problem to be resolved within the next five years.
  The third social contradiction is education and medical care. In this respect, the common people have more opinions. For example, medical treatment is expensive, difficult to see a doctor, and cram schools in education are blooming all over the place. This is also a long-term work that must be reformed and sustained Increase investment in education and medical care.
  The challenges facing China’s economy have brought tremendous changes to the economic structure. The “14th Five-Year Plan” has given a new concept of economic development. What development characteristics will China’s economy have in the next five to ten years?
  China’s economy will present six new characteristics in the future.
  The first feature is that the next five years will be an important adjustment period, and the economic growth rate will drop to 5.0% to 5.5%.
  However, the economic trend in the next five years may be U-shaped, first decline and then adjust in place. By the “15th Five-Year Plan”, that is, from 2025 to 2030, the economic growth rate may further rebound.
  The second characteristic is five years of deep and large-scale industrial reorganization. As soon as the economic growth rate declines, the market will be affected. At the same time, the overcapacity in many industries is still relatively serious. Therefore, innovation, development, and greenness will inevitably occur. Industrial adjustments will inevitably occur. Many companies will withdraw and be affected by other industries. Mergers and reorganizations of enterprises.
  The third feature is that in the next five years, science and technology will penetrate into various industries and change the industrial form.
  The fourth feature is the further development of green industries.
  The fifth feature is that energy storage and energy management will become important industries.
  The sixth feature is that the next five years will see more foreign investment and trade opening agreements between countries.
  Finance in the next five years will also present six new characteristics: First, various financial ecosystems around innovation will be more active and sound, and venture capital and private equity investment will emerge further; second, debt restructuring will be the top priority In the next five years, company bankruptcies and debt defaults will continue to occur, and debt asset management companies will also emerge; third, long-term debt will increase, green carbon reduction, green infrastructure needs financing, and the investment cycle of some projects will be long. Up to 20-30 years, a longer-term financing method is needed; fourth, government debt is more transparent, and local debt can be considered to be incorporated into national debt, which is guaranteed by finance and traded on the secondary market to help China’s economy go lightly; fifth Inflation in the United States has begun to rise, but China’s inflationary pressure is not very high. Although imported raw materials continue to rise, the overall domestic production capacity is still relatively surplus, and the pressure transmitted from PPI to CPI is not large; sixth, the number in a broad sense Currency will appear, and all transactions will retain traces. Not only will future cash flow be networked and digital, but also a new model of efficient and transparent supervision will be formed, which is also an important development trend.
  ”2060 Carbon Neutrality” is the first time China has proposed a clear emission reduction target, indicating that the Chinese economy will start a long-term low-carbon transition model. This goal will not only drive China’s industrial transformation and upgrading, and improve its position in the global value chain, but will also exert a broader influence on a global scale through the in-depth collaboration of the global industrial chain, and set a good example for the global response to climate change. .
  How should companies respond to these new changes? I think companies need to pay attention to three things.
  The first thing is carbon reduction. Carbon reduction has been highlighted in the “14th Five-Year Plan”. Policies related to carbon peaking and carbon neutrality will be gradually introduced during the “14th Five-Year Plan” period. The process of reconciliation is also a process of industrial reshaping.
  The second thing is to manage the company’s funds. Enterprises should reorganize the capital chain and set aside a capital margin. It should not happen that the company is good, the product is very good, the market is very good, and the cost is very low. However, due to the failure to make debt adjustments in time, liquidity problems will eventually arise.
  The third thing is to seize the opportunity of scientific and technological innovation. Innovation is the primary task of the “14th Five-Year Plan”. For technological innovation, companies often think that reducing costs and transforming processes is innovation. The first important point of innovation is that companies must find new ideas for development through technological innovation. Especially in today’s digital economy era, companies must actively grasp the challenges of digital transformation. Opportunities, from a comprehensive transformation of organizational management, personnel capabilities, business operations, and ecosystem integration, to break through software and hardware barriers, find new partners, explore new scenarios, form new business formats, and create new value.