Question: Some local governments have already planned for post-epidemic economic stimulus plans. What suggestions do you have for the Chinese government in terms of internal and external economic recovery?
Chan Kung: Stimulus plans are inevitable, and it should be the first thing that a local government to have in mind, and there is insufficient financial resource in China. We can assume that at the central level, the possibility of using monetary policy tools is very high. When fiscal policy is concerned, as financial resource will be wanting, so not much of it will be of use.
The NDRC can also relax on the projects. Actually, NDRC controls state-owned banks.; these banks listen to NDRC, not the central bank. The NDRC 's future actions are of substantive significance. It is estimated that some funding policies will be introduced and become the most important part of post-epidemic macro-stimulus.
In the field of technology and industry, not much can be done, as many are things that have been long and overdone in the past. Even if some measures in this field are introduced, it is likely that the market will not respond well to it, and such measures cannot play a substantial role in stimulating economic growth. What can be done is probably in a few areas, such as hydrogen society, biomedicine, and urban renewal, which are relatively new and indeed promising.
In terms of macroeconomics, the focus of the policy is expected to change. It will change from fully concentrating on production to both production and consumption. This is due to economic growth and safeguarding the basic framework of social stability. In other words, this is to expand space and room for SMEs. Without consumption, under the economic growth of less than 6%, China's economic growth cannot be stabilized. It is necessary to give equal weight to production and consumption as the key transformation.
Social science, culture and health should actually be the focus of China's economic development in the future. In the past, only one "science" was valued, for the sake of production. In fact, this epidemic has clearly shown how social and education are vital as the key to improving the quality of the people and a guarantee for long-term economic growth. We can only assume that the future policy will only give a bit more considerations to these aspects, and there will not be sudden drastic changes. This change is not easy in China, although there may already be many people who advocate or agree for that.
In terms of import and export, it is estimated that in the future, it will mostly be a process of trial and testing, and it will be difficult to achieve great performance. The results of the U.S.-China trade war still need to be digested. Foreign investors were already facing uncertainties in the past, and after the epidemic, they would lose their confidence and inevitably they would relocate to other places if they. However, there are always foreign investment coming in and out, and foreign capital in the financial industry will still come in tentatively to see how open China's market is.
