Illustration: Luo Xuan/GT

Editor's Note:

An article calling to prevent economic growth from sliding below 6 percent has sparked debate among Chinese economists. The piece was published by Yu Yongding, an academician and senior fellow of the Chinese Academy of Social Sciences. With a gloomy world economic landscape and uncertainties brought about by the China-US trade war, the Chinese economy -  with a 6 to 6.5 percent growth goal -  has been under pressure. An ebbing economic growth and rising consumer price index have placed policymakers in a dilemma. 

Economists are debating whether to defend a 6 percent growth rate with a stimulus package or apply more reform measures to the Chinese economy, which would stabilize growth at 5 percent. The side of the debate which Yu belongs to believes China's current priority should be maintaining a 6 percent growth rate with an expansionary fiscal policy and loose monetary policy. The other side argues that it is time for China to switch gears, focusing on long-term reform and changing the economic structure. 

Han Yongwen, deputy director of the China Center for International Economic Exchanges

The real pressure for economic growth is employment, and maintaining a 6 percent economic growth is vital. China's economic development has suffered from increasing downward pressure since last year. Next year, multiple pressures will mount. Therefore, stable economic growth carries more significance. If the growth rate can be stabilized next year - after speeding up the pace of reforms and adjustment - the Chinese economy will enter a level period, and maintaining this will be the key to economic development.

The state of employment will be the real pressure on next year's economic growth. Data shows that the number of college graduates will reach 8.7 million next year. Add that figure to recent graduates who have not yet secured jobs and a huge amount of job vacancies will be needed to absorb the excess labor. 

Liu Shijin, deputy head of the economic committee of the 13th Chinese People's Political Consultative Conference National Committee

There are two basic facts that people should realize about the Chinese economy. The first is that the transfer from high-speed growth to the gradual decline was due to a shift in economic growth phases - from 10 percent high-speed growth to 5 percent medium-speed growth. 

The second basic fact is that monetary and fiscal policies will not change the potential growth rate. There have been voices calling for looser monetary policy. In fact, monetary policy has already become relatively loose in recent years. 

As the current macroeconomic policy is relatively loose, adopting a stimulus policy or trying to beat the potential growth rate is like advance spending. Economic stimulus could trigger a steep drop, and China should be particularly wary of this possible outcome.

The Chinese economy has entered a medium-speed growth phase, which has a 5 to 6 percent GDP growth rate but it has not been stabilized. It could still fall by 1 percentage point in the next year or two. The pressure to maintain stable economic growth will be greater next year. 

Old driving forces for growth - infrastructure, real estate and exports - have been lacking momentum. The Chinese economy has to look for new potential thrusts for medium-speed growth if it wants to prevent a drop below 5 percent. Therefore, next year's focus should be on reforms and policy adjustment. 

Shen Jianguang, chief economist of JD Finance 

Maintaining growth at 6 percent should not be China's goal in 2020. The country has already adopted some stimulus measures, but the results have been insignificant. Policymakers have paid great attention to maintaining stable economic growth amid the current economic downturn, and have been utilizing countercyclical adjustment. 

Despite this, Chinese economic data still appears weak. But does that mean China's stimulus was ineffective? This is not the case. Without these policies, China's economic growth could have already dropped below 6 percent. 

Once the external environment deteriorates beyond expectations, maintaining a 6 percent economic growth will not only be difficult, but unnecessary. China needs to deepen its reform and opening-up, avoiding the use of strong stimulus.

Next year will be an important year for reform. It will be difficult to maintain short-term, stable growth and promote long-term reform simultaneously. If reforms obtain substantial results, together with medium and long-term benefits - even if economic growth declines to 5 percent - it will be better than 6 percent achieved through heavy stimulus. 

This article was compiled based on speeches given by Han Yongwen and Liu Shijin at the 2019 China Reform Forum on Saturday and a report by Shen Jianguang. bizopinion@globaltimes.com.cn