China's economic problems may seem to be internal contradictions, but in reality they are not. Whether it is the improvement of economic data without feeling the micro effect, or the diminishing effect of stimulus policies, it reflects that the essence of the problem lies in the choice of direction. However, this choice is not just for the present, but more likely for the next decade or even two decades. Unless there is a new round of technological revolution or the rise of new industries, the economic woes will persist.
Trust is at the heart of global economic and financial exchanges. Lacking trust, people would rather give up the opportunity to earn money than risk investing. Only an open and transparent rule of law can bring a sense of trust to people in different countries and cultures. In Singapore, for example, it has won the trust of Western countries as an international financial center by emphasizing openness and transparency and reforming the International Commercial Court, including the hiring of a large number of foreign judges.
After 1978, China achieved the goal of solving the problem of food and clothing, but it became truly prosperous thanks to its accession to the WTO. A closer look at China's GDP growth curve shows this at a glance. If transparency is reduced, it will be difficult to gain the trust of the other party, even if policies are introduced that are favorable to foreign investment. As a result, stimulus at the economic level alone seems to have a modest effect.
The importance of the private economy is self-evident. It can be said that it is the private economy that has driven China's prosperity. The private sector contributes more than 50% of China's tax revenue, 60% of GDP, 70% of technological innovation, 80% of urban employment and 90% of the number of market entities. Moreover, the private economy has the characteristics of the highest efficiency and the strongest marketization, and even the highly sought-after Huawei is a private enterprise.
However, some Internet celebrities have recently been right"Private capital"Malicious stigmatization and attacks, such as Wu Xiaoping, Sima Nan, etc. However, these entrepreneurs will not be intimidated by the attacks of these influencers, because for them, these influencers are not their customers, and their influence is limited relative to the vast Chinese market. What entrepreneurs are really worried about is the attitude of the parties behind this climate. We need to understand the real needs of private entrepreneurs, provide them with a greater sense of security, make them more willing to invest, and create value. Therefore, banning these influencers will not solve the problem, but only the superficial result. The right thing to do should be to address what private entrepreneurs need, not just educate them.
Boosting confidence and expanding consumption has been achieved through a large number of policies, but the results have not been satisfactory, and there is a gap between macroeconomic and micro feelings. There are many reasons for this, such as the scarring effect. At the root of all this, however, is the problem of distributive adjustments. Current policies and data may seem very good, but in reality only a few industries and groups have benefited. These industries are emerging industries that are highly efficient and require only a few people to generate great economic value. However, from another perspective, the fruits of economic development have not been extended to a wider range of people. We have not heard any complaints from those working in traditional industries such as tobacco, oil and electricity. Only when the broad masses of the people can fully enjoy the fruits of economic development can consumption, micro-perception and residents' confidence be truly restored. Therefore, the core issue of consumption, micro-perception and household confidence is distributive adjustment, not a purely economic one.
The essence of economic problems is not in the economy itself, but in the direction chosen. If these essential issues are not addressed, a purely economic stimulus policy will have a limited effect. Therefore, we look forward to the early arrival of a new round of scientific and technological revolution and the early rise of emerging industries. At the same time, we also need to further promote reform and opening up and remove obstacles to economic growth. These are the solutions to economic problems, not just the economic realm. Only by facing up to and resolving the issues of open and transparent rule of law and trust, the protection of the private economy, and the adjustment of consumer confidence and distribution, can we create a more stable and prosperous China.