Analysis of the Development of Beijing (2021)

CHAPTER 1

China’s Regional Economic Development, 2020–2021: Situation and ProspectsRegional Economic Research Group, Beijing Academy of Social Sciences

Zhao Hong, Yang Weifeng, Wang Deli, Wang Zhong, Fang Fang, He Yan and Xuli Luyi¹

2020 was an extraordinary year in the history of the People’s Republic of China. The sudden COVID-19 outbreak severely impacted China’s regional economic development. China’s economic growth fell by 6.8% year on year in the first quarter of 2020, the slowest since quarterly GDP data was first released in 1992 (CCTV news, 2020). In the face of the pandemic, the CPC Central Committee led by Xi Jinping accurately judged the situation, made careful planning and prompt decisions, and focused on pandemic prevention and control, and economic and social development. The State Council proposed “six stabilizations” (stabilizing employment, finance, foreign trade, foreign investment, investment, and expectations) and “six guarantees” (guaranteeing employment, people’s basic livelihood, market entities, food and energy security, industrial and supply chain stability, and grassroots operation), raised the minimum standard of basic old-age pensions for urban and rural residents, increased tax and fee cuts, issued RMB 1 trillion in anti-pandemic government bonds, increased the government deficit by RMB 1 trillion, and adopted targeted fiscal policies to reduce taxes and burdens for small and medium-sized enterprises. The orderly resumption of work and production was promoted against the backdrop of continuing pandemic prevention and control, and China’s economy took the lead in the steady recovery. In the first three quarters of 2020, China’s economic growth declined first and then rose, showing a clear trend of recovery. China became the only major economy in the world to achieve positive growth. At present, China’s economy is still gradually recovering. The sudden COVID-19 outbreak also had a short-term impact on China’s regional economic development. Local governments adopted targeted policies to support economic development, turned crises into opportunities, and accelerated the transformation of regional economic development drivers with the help of innovation-driven development. The task of poverty alleviation in the new era was completed on schedule, with all 832 poverty-stricken counties in China lifted out of poverty. Decisive progress was made in building a moderately prosperous society in all respects; major national development strategies were continuously promoted; a new pattern of high-quality regional development gradually began to take shape; new-type urbanization was strengthened; ecological civilization was promoted; and the concept of ecological civilization was deepened.

At present and for the foreseeable future, China will remain in an important period of strategic opportunities for development, but there will be changes in both opportunities and challenges (Communique of the Fifth Plenary Session). The progress of COVID-19 is uncertain, the global economic governance system faces severe challenges, and China’s economic development is under considerable external pressure. 2021 will mark the intersection of China’s Two Centenary Goals and the beginning of the 14^th Five-year Plan, setting us on a new journey toward comprehensively building a modern socialist country. In 2021, China’s regional economic development will present the following trends: a new development pattern featuring dual circulation and mutual promotion between China and the rest of the world will gradually take shape, with domestic circulation as the main part; economic growth driven by domestic demand will be the core of the new development pattern; industrial transformation and upgrading and regional economic integration will accelerate; new modes of regional development will be formed at a faster pace; innovation will continue to play a stronger role in driving high-quality regional economic development; and reform and opening-up at a higher level will take shape at a faster pace.