In 2021, China's GDP growth continued to be at the leading level in the world, achieving a good start in the 14th five year plan. But what cannot be ignored is that the risks and challenges facing China's economy are increasing, and there is a certain downward pressure on the economy. The central economic work conference held at the end of 2021 put forward for the first time that "China's economic development faces the triple pressure of demand contraction, supply shock and weakening expectation". The 2022 government work report once again emphasizes that China's economy will still face the challenge of "triple pressure". Why does the "triple pressure" persist, whether the "triple pressure" will increase further in 2022, and how to deal with macro policies to achieve the expected GDP growth target of about 5.5%. These questions have aroused widespread concern from all walks of life and need to be studied and answered. Short term and medium and long term causes of "triple pressure" In the short term, the "triple pressure" in 2021 is closely related to the continuous spread of the global epidemic, the complex and volatile international situation, the sharp rise in international commodity prices and other factors. The core performance of "demand contraction" is the slow recovery of domestic demand in consumption and investment. The slow recovery of consumer demand is mainly due to the difficulty of effectively improving the income growth of low-income groups under the influence of the epidemic, and the median growth rate of residents' per capita disposable income continues to be lower than the average growth rate. The slow growth of investment demand is mainly dragged down by the decline in the growth rate of infrastructure investment and real estate investment. "Supply shock" is mainly due to the increased production constraints and rising production costs of enterprises under the influence of multiple factors such as the sharp rise in international commodity prices and tight energy supply, which is prominently reflected in the sharp rise of industrial producer ex factory price index PPI. The "weakening of expectations" mainly stems from the weakening of the expectations of micro individuals such as residents and enterprises for future economic growth in the environment of weakening the driving force of global economic recovery. In the medium and long term, the persistence of the "triple pressure" is mainly due to the continuous pressure faced by China's economy in recent years at the three levels of economic stability, economic structure transformation and long-term economic growth. "Triple pressure" is essentially the further continuation of "three-stage superposition" pressure. Before the outbreak, the central economic work conference in 2019 had clearly pointed out that "China is in a key period of transforming the development mode, optimizing the economic structure and transforming the driving force of growth. Structural, institutional and cyclical problems are intertwined. The impact of the" superposition of three phases "continues to deepen and the downward pressure on the economy increases". Specifically, the medium and long-term reasons for the "triple pressure" mainly lie in three aspects. First, the rising debt pressure leads to weak consumption and investment demand, which is an important medium and long-term reason for the "demand contraction". Over the past 10 years, China's macro leverage ratio has been rising faster, especially in the residential sector, which has increased significantly from 27.9% at the end of 2011 to 62.2% at the end of 2021. Under the pressure of high debt, residents and enterprises have to use a larger proportion of funds to repay debt, which has a significant crowding out effect on consumption and investment, resulting in "demand contraction". Secondly, in the process of economic structure transformation, the inflection points of the supply of production factors such as labor, capital and energy appear one after another, which is an important reason for the medium and long-term "supply shock". The rising cost of production factors at the supply side will be a pressure and challenge that China's economy will continue to face at this stage. It is also a stage that China must go through in the process of changing from the extensive production mode relying on low-cost advantages to high-quality development mode. Thirdly, as China has been in the process of transformation of growth power in recent years, the traditional growth power such as capital and labor has weakened, while the new power such as total factor productivity and human capital has not yet taken shape, and the potential growth rate shows a downward trend. This has led to a decline in the expectations of residents and enterprises for future income growth and profit growth, which is an important medium and long-term reason for the "weakening of expectations". Three new changes may take place in the "triple pressure" in 2022 "Triple pressure" will persist under the influence of medium and long-term factors, and the main performance will be different in different periods. The "triple pressure" in 2021 is mainly reflected in insufficient domestic demand on the demand side, rising production costs on the supply side and weakening expectations of economic growth. Three new changes may take place in the "triple pressure" facing China's economy in 2022, which needs attention and prevention. In terms of "demand contraction", while the driving force of domestic demand growth needs to be improved, the growth of external demand will be under pressure. In 2022, although China's consumption and investment demand will improve, and the consumption and investment data of the first two months have also made a "good start", it is difficult to reverse the lack of driving force for domestic demand growth. Residents' consumption will still be restricted by multiple factors such as income growth and debt pressure. Although the growth rate of investment will be supported by the rebound in the growth rate of infrastructure construction investment, the impact of the decline in the growth rate of real estate investment will gradually increase. From January to February 2022, the new construction area of houses decreased by 12.2% year-on-year, which means that the downward trend of investment growth in real estate development will be further accelerated. At the same time, the foreign demand with high growth in the past two years will decline in 2022, mainly due to three factors. First, the momentum of global economic recovery has weakened, curbing external demand. Second, accelerating the recovery of overseas supply chains will weaken the substitution effect of China's exports. Third, under the influence of the high base in the past two years, it is more difficult for China's exports to maintain high growth in 2022. Therefore, the decline in external demand growth will become a new factor affecting the "demand contraction" in 2022. In terms of "supply shock", the rising cost in the field of production has begun to have an impact on the field of consumer goods, and the rising pressure of residents' living costs will increase. Since 2022, although the CPI of the consumer price index has increased by only 0.9% year-on-year in the first two months, it is mainly dragged down by the sharp year-on-year decline of pork price, which has a higher weight in CPI. The year-on-year decline of pork price in February is as high as 42.5%. From the perspective of non food CPI, the year-on-year increases in January and February reached 2% and 2.1% respectively, which has been at a high level in recent years. Among them, the travel related transportation and communication costs of residents increased by 5.5% year-on-year, and the hydropower and fuel costs related to residence increased by 3.6% year-on-year, reflecting the impact of the rise of energy and other cost factors in the production field on Residents' living costs to a certain extent. Further, from the consumer goods price index implied by the nominal growth rate and actual growth rate of total retail sales of social consumer goods, the CPI from January to February 2022 was 1.8%, higher than the same period in 2021. The increase of CPI in the whole year may continue to expand, and the pressure of price rise driven by cost can not be ignored. Especially when the income growth of low - and middle-income groups is difficult to be better boosted, the actual feeling of residents about rising prices will increase significantly. In 2022, we should pay attention to the "supply shock" in this regard. In terms of "weakening expectation", the public's expectation of economic growth has improved, but the uncertainty of asset price expectation will increase. Since the fourth quarter of 2021, with the increase of steady growth policy, the public's expectation of economic growth has improved. The outstanding performance is that the expected index of production and operation activities of manufacturing and non manufacturing enterprises continues to rise, rising from 53.6% and 58.8% in October 2021 to 58.7% and 60.5% in February 2022, respectively. However, it should be noted that under the influence of factors such as the Federal Reserve's interest rate hike cycle and the intensification of geopolitical conflict, the public's expectation of asset prices fluctuated significantly. In February 2022, the year-on-year decline in second-hand housing prices in 39 of the 70 large and medium-sized cities, the month on month decline in second-hand housing prices in 57 cities, and the sharp fluctuations in the capital market in March all highlight the trend of increasing uncertainty in public expectations of asset prices. Expectation is an important factor supporting asset prices, and asset price stability is the key to ensure the smooth operation of the economic and financial system. Therefore, in 2022, it is necessary to strengthen the prevention of the weakening of asset price expectations and the risk of sharp fluctuations in asset prices. Under the "triple pressure", macro policies should strengthen the "integration of three policies" In the face of the continuous and new changes of the "triple pressure", how should macro policies respond, so as to better achieve the GDP growth target of about 5.5% proposed in the government work report in 2022. Some views believe that monetary and fiscal policies should be greatly strengthened to cope with the "triple pressure" with more than expected policy expansion. However, the strength of monetary policy and fiscal policy should not be too strong, mainly for the following two reasons: first, too strong monetary policy and fiscal policy will exacerbate inflation expectations, so as to further strengthen the "supply shock". Second, under the background of the Fed's interest rate hike cycle and the continuous rise of China's government debt ratio, China's monetary policy and fiscal policy space will be subject to certain constraints. Excessive monetary and fiscal policies are not only difficult to sustain, but will further affect the expectations of micro subjects and aggravate the "weakening of expectations". In order to better deal with the "triple pressure", macro policies need to focus on the important causes of the "triple pressure" and make joint efforts from the three dimensions of economic stability, economic structure and long-term economic growth. In terms of economic stability, monetary policy, fiscal policy and other stability policies should be stable and effective, strive to promote the expansion of consumption and investment demand, stabilize the macro-economic market and prevent "demand contraction". In terms of economic structure, we should strengthen the use of structural policies to deal with "supply shocks". On the one hand, structural policies should focus on optimizing the structure of resource allocation, break through the blocking point of supply constraints, smooth the national cycle, and improve the efficiency of resource allocation under the tight supply of production factors. On the other hand, structural policies should also focus on improving the income structure of residents, increasing the income growth of low - and middle-income groups, and strengthening the structural support for downstream enterprises and small and medium-sized enterprises, so as to weaken the impact of "supply shock" on the economy. In terms of long-term economic growth, we should effectively stimulate the driving force of economic growth through growth policies, reverse the continuous decline of potential growth rate in recent years, and deal with the "weakening of expectations". It can be seen that in response to the "triple pressure", macro policies need to coordinate three categories of policies: stability policy, structural policy and growth policy, so as to realize the "integration of three policies" of macro policies. This will help better achieve China's economic growth target in 2022 and achieve medium - and long-term goals such as crossing the middle-income trap on schedule. (Xinhua News Agency)