The opening ceremony of China Concrete and Cement-based Products Industry Convention 2018 hosted by China Concrete and Cement-based Products Association (CCPA) was held in Changshan, Hunan Province on December 1st, 2018. At the second part of the opening ceremony, CCPA invited Chen Daofu, the associate director of Finance Department of Development Research Center of State Council to make a keynote speech entitled as “Macroeconomic Control, Policy Coordination and Expectation in Economic Transit”. Green, smart, innovation, high quality, one belt one road initiative became the most frequently used key words during the Convention.

Mr. Chen started with the global economic and political situation and made a general judgment on the Chinese and global macroeconomic circumstances. In the global aspect, gap between rich and poor is getting bigger. Anti-globalization steps on the political stage. Old-fashioned meritocratic system is being challenged. Changes in economy, regulations and technology have brought major and profound changes to production capital, social systems, technology and business models. In China, due to the lack of energy to expand capacity, the entity economy is forced to transform from traditional business model. The manufacture industry has been well adjusted but is still under vast pressure to step down. The macro and micro economy have apparently deviated from expectation. The middle-size and small-size enterprises are quitting the market so that the market is concentrated towards macro enterprises with the profit rate number being improved. The negative impact by internet economy has been fully released. The rate of consumption over Gross Domestic Income is relatively large. 

In the first three quarters of 2018, part of the macroeconomic data had a relatively large deviation from expectation. Consumption contributed 78% of the total GDP, but the accumulated number deviated at a relatively large scale from the same time last year. Accumulated enterprise benefit differed from the same time last year. The growth rate of investment in the fixed assets is prone to decline, which conflicts with the high growth rate of equipment investment. This phenomenon indicates that the macroeconomic control becomes less efficient. The pull effect of enterprise benefit over manufacture investment becomes less efficient and takes longer time to show. Enterprises become less active in investment expansion. Fiscal expenditure multiplier decreases. The credit transmission channel of monetary policy doesn’t work well so that it is hard and expensive to finance. Consequently, a relatively large deviation is observed between the reality and macroeconomic expectation.

Lastly, Mr. Chen introduced the general approaches to make policy design and macroeconomic control, and to minimize the deviation between reality and expectation. He said the key factor is economic structure adjustment, as well as operation path and policy implement. Macroeconomic control means to create and nurture an energetic environment under specific economic structure. In the process of management for daily operation, during crisis and transformation period and during policy design, attentions should be paid to ethics risks and the bearing capability. Emphasis should be put on the importance of capital constraint and public credit. Balance between market and non-market approaches should be attained through comprehensive maneuver of market classification, market control and administrative means. Expectation management should be conducted through specific polices and reform including social security, taxation and finance, etc.