Definition of China’s new economic normal:

In a period of shifting growth rates, structural reform pains, and increasingly acute social conflicts, it is concentratedly reflected in the coordination with the potential growth rate and the changes in the past period. Compared with the period of high growth, the reality is a social and economic situation with relatively low growth rate. Characteristics of the new normal of China's economy:

1. The new normal of growth rate, that is, shifting gears from high-speed growth to medium-high-speed growth. This is determined by the shift in potential growth rate and also by changes in the overall demand structure of the Chinese economy. Among the various components of total demand, the contribution of final consumption to economic growth will increase, while the contribution of investment and net exports will weaken; accordingly, China's savings-investment relationship will also improve, and the purpose of economic growth will be distorted from the old normal. "Production for production's sake" has effectively shifted to "production for general public consumption". Implementing this change requires a shift from simply emphasizing making the pie bigger to simultaneously "making it bigger" and "dividing it well", and improving the relationship between residents, businesses and the government in the distribution of national income.

2. The main force for growth will shift to innovation-driven growth that mainly relies on transformation and upgrading and productivity improvement. That is, growth mainly stems from positive changes in the supply side rather than growth driven by artificial demand. This means that macroeconomic policies will shift from the past focus on demand-side management to focus on supply-side management; the mechanism of growth and resource allocation will be more market-oriented, with the market playing a decisive role and reducing the government's direct allocation or administrative control of economic resources. Intervention, which can not only improve the efficiency of resource allocation, but also greatly reduce the opportunities for corruption.

The new normal of China's economy is not only the new normal of "quantity", but also the new normal of resource allocation mechanism, that is, letting the market play a decisive role in resource allocation and letting resources play a decisive role in the market. The steering of signals is relatively more efficiently configured. This means that economic flexibility will increase in the new normal.

3. The marketization of growth and resource allocation mechanisms requires not only promoting the opening of the market internally and externally, relaxing market access restrictions on economic entities, and implementing more stringent, fair, open and transparent property rights and markets judicial protection for participants, and requires an appropriate reduction of the proportion of government income in national income distribution. At the same time, the aging population has increased demand for assets that are safe and have relatively stable returns. Improving the monetary policy mechanism requires improving the government bond yield curve. These three factors mean that the total amount of government bonds may increase significantly in the future, and the term structure of government bonds will become more diversified.

4. The new normal of macroeconomic policies organically combines the "stability" of macroeconomic policies with the "liveness" of microeconomic policies. The so-called "maintaining a strategic sense of normalcy" means maintaining policy determination, making "less fuss" or even "no fuss", and shifting from aggregate easing and extensive stimulus to macro-prudential policies with aggregate stabilization and structural optimization. This determines the monetary policy. In the future, policies may have the characteristics of combining "points and areas" and "using points to lead areas". In the process of global economic rebalancing, China will weaken China's dollar-based money supply mechanism and increase the autonomy of China's monetary policy and the credit independence of the central bank. This will determine that monetary policy operations will not be tightened and tightened like the "old normal". Mainly freeze liquidity. This shows that in the coming period, the new normal will open up new space for China's monetary policy and create positive conditions for the deposit reserve ratio to slowly and orderly reduce to normal levels.

5. The marketization of interest rates will be further deepened and the overall level of marketization will eventually be basically achieved. Changes in the interest rate determination mechanism will force the central bank to gradually abandon the interest rate management of deposits and loans. The interest rate level will be able to better reflect consumers' time preference rate, and can also better reflect the true capital return rate and risk profile of enterprises. However, affected by the decline in potential growth rate and marginal product of capital, the overall level of interest rates in China is expected to remain at a low level in the future.

Characteristics of the old normal of China’s economy:

1. Continuous rise in economic growth rate;

2. High savings-high investment is its second important feature, and also provides capital supply guarantee for the continued rise of economic growth rate;

3. The demographic dividend contributes hugely;

4. The old normal economy relies on the real estate industry The economy, finance and local finance all have a tendency to real estate;

5. Distorted national income distribution structure;

6. At the monetary level, the old normal is manifested in the form of currency While the supply mechanism is highly dollar-standardized, it is also following an inflationary path of high credit and high money supply.