Time: August 29th, 2014
Lecturer: Professor WANG Hongju
Host: Professor ZHAO Nong
Commentators: CHENG Shi, XU Hongcai, YU Chunmei

Professor WANG firstly introduced the meaning of “New Normal”. He explained the features of the New Normal of China’s economy, with a comparative perspective of the New Normal concept proposed by Mr. Mohamed El-Erian, Chief Economic Adviser of Allianz, a multinational financial services company. The New Normal for China’s economy meant the subprime high speed growth stage, and the new normal status that featured “maintaining economic growth” and “containing risks”, restructuring, new constraints of factor provision, and the needs for reforming and completing the national security governance. Professor WANG also illustrated three prospects for China’s New Normal.

By analyzing some short-term economic indicators(Coincident Index by Federal Reserve Bank of Philadelphia), Composite Leading Indicators(OECD), indexes of the real economy, and other coincident indexes of the US, Professor WANG discovered the periodical mismatch between the economy of the US and China. By employing the dynamic variants model on the comparison of the GDP, investment, and consumption of the four major economies, namely, US, Japan, Europe, and China, and calculating the common variant, the mismatch still stands. In order to deal with this mismatch, Professor WANG pointed out the following policies to be adopted to avoid the reoccurrence. The policy proposals are to achieve a growth rate that’s higher than the bottom-line growth rate by micro-stimuli while de-leveraging, to avoid decoupling with the American economy, and to suppress speculation in the property market and to speed up economic restructuring by reforms.