This article was previously delivered by Wei Jianing, academic advisor of the China Association for the Promotion of Industrial Development, at the 180th Shanghai Development Salon of the Shanghai Development Research AssociationPolicy stimulus, or reform and opening up
Wei Jianing pointed out that although China's economy is facing many challenges, it still has great growth potential. The top priority is not to emphasize "promising", but to emphasize "limited" and "rule of law", rather than investing in projects, it is better to invest in consumption and social security. He also proposed that we should seize the rare opportunity of a new wave of scientific and technological revolution with digital transformation, and strive for a new round of development dividends with a new round of reform and opening up. Here are the main takeaways from his speech.
1. Three major factors contributing to the slowdown in China's economic growth
The first is the short-term factor, which is the impact of the new crown epidemic. This factor is well known and will not be repeated here.
The second is the long-term trend, the so-called declining potential growth rate. The "three major dividends" that underpinned China's rapid economic growth in the past are gradually disappearing. First of all, the demographic dividend is disappearing, and there is also an "aging"; Second, capital dividends are disappearing, the savings rate is declining in the long run, and the debt ratio is rising. At the same time, it is becoming more and more difficult to attract foreign investment. In the end, the technological dividend disappeared, copycat technology encountered intellectual property protection, and imported technology encountered the high-tech cold war between China and the United States.
In addition, from the perspective of national strategy, as Aguion said, in the process of development, if a country's technology cannot shift from "catch-up imitation" to "cutting-edge innovation", it will fall into the "middle-income trap". From the micro perspective of enterprises, as Zhang Weiying said, if they cannot turn from "arbitrage enterprises" to "innovative enterprises", they will also fall into the "middle-income trap". To sum up, a basic conclusion is:In the future, without innovation, there will be no economic growth in China.
The third factor is the disappearance of the "reform dividend". If you ask who the two economists who have contributed the most to China's economic reform, I think one is Wu Jinglian and the other is Li Yining. Why? Because what has China's economic reform done right over the past few years? The most important thing is nothing more than two things: the macro has introduced the market economy, so there is a "Wu market"; The shareholding system has been introduced at the micro level, so it is known as "strong shares". But why has China's economic growth slowed down in recent years? I think one of the important reasons is that "Lin Youwei" defeated the "Wu Market" and emphasized the promising, which led to chaos in various places; On the other hand, "Lang Guojin" defeated "Li Shares", which led to the advance of China's economy and the retreat of the people.
2. At present, China's economy is facing three major challenges
The first challenge is the recent chain of thunderstorms, which is to be expected and not surprising. In 2015, when we did the "Economic and Financial Risk Assessment for the 13th Five-Year Plan Period", we pointed out the chain reaction chain of internal and external risks, from external risks and population aging risks, to real estate risks, as well as fiscal risks, financial risks, and economic downturn and deflation risks. China Financial Publishing House, if you are interested, you can find it.
The second risk, which many of us have not yet seen, is that we are likely to be missing out on a valuable opportunity for a new wave of technological revolution. When the last round of the wave of new technological revolution broke out, because Comrade Ma Hong led the experts and scholars of the Academy of Social Sciences and the Development Research Center to speak out, on the one hand, they constantly reminded the top leaders, on the other hand, they vigorously carried out social mobilization, and launched an unprecedented discussion of the whole society, so that our country has a sense of urgency and crisis from top to bottom, and promoted market-oriented reform and opening up, so as to seize the precious opportunity of the last round of new technological revolution wave and obtain "technological dividends". It has supported the rapid growth of China's economy.
Today, digitalization is accelerating in an all-round way, and a new inflection point, large models, is rapidly emerging, and in the near future, large models will be ubiquitous. What is the value of people in the future? Only by having independent thinking and independent opinions, otherwise, all other things will be replaced by large models and AI. At present, a new round of scientific and technological revolution is surging in the world, and digital technology is rapidly iterating, so we must have a new sense of crisis and urgency. Otherwise, China risks being left behind by the new digitalization and the new globalization.
The third major challenge is whether the policies and slogans of private enterprises have fallen into the "Tacitus trap"?! In the recent period, all levels have introduced a series of new policies and measures to support the development of private enterprises, but it seems that the confidence of private entrepreneurs is still weakening, and the enthusiasm for investment is still decreasing. So I have a worry, that is, will our private enterprise policy fall into the "Tacitus trap"?
Professor Lei Yi once pointed out in the book "Slices of China: 1900" that an important lesson in the last years of the Qing Dynasty was that due to the vacillation of the attitude towards foreign affairs, the Qing Dynasty finally lost its credibility.
3. How to deal with the three major challenges?
In the face of the current three major challenges, we must accelerate reform and transformation.
(1) Respond to the economic downturn with the best transformation
I agree with Lin Yifu that China's economy still has a lot of growth potential, and whether it can reach 8% is another matter, but at least it should not be as low as it is now. However, the correct prescription should not be "promising**", but "limited**" and "rule of law**".
Do the right thing first, and then do the right thing. If the general direction is wrong, the harder you try, the farther away you may be from your goal. If the rule of law environment is done well, you don't need to attract investment, and you don't need preferential policies, and domestic and foreign investors will come uninvited. Because to make money and make profits, this is the internal motivation of private enterprises and foreign-funded enterprises, and there is no need to worry about them at all levels.
The most important aspects of the business environment are the rule of law and the "two equals", namely "peaceful development" and "fair competition". What private enterprises and foreign-funded enterprises are most concerned about is the rule of law and the "two equals".
(2) Respond to the failure of macroeconomic regulation and control with policy transformation
I think, as far as China is concerned, at the momentKeynesianism may have come to an endEndThe effect of relying on ** investmentIn constantlyDecreasing。NowThe proportion of investment in infrastructure construction is getting higher and higher, but the rate of economic growth is getting lower and lower, indicating that the investment-pull effect is decreasing. Personally, I think,**Instead of goingIt is better to invest in projects than to invest in consumption, because the consumption multiplier is greater than the investment multiplier, and the investment multiplier is constantly decreasing
In 1998, the highway was built, and the economic and social benefits were good. By 2008, it was no longer possible to build any more roads, and the roads that were profitable were basically completed. So the high-speed rail was built in 2008, and it will not work to build the high-speed rail in 2018. Because in recent years, 80% of the high-speed rail has been repaired in poor areas for the old and the young, who will sit after the repair, and who can afford it? If no one sits there, how much does it cost**? Therefore, in 2020, the "new infrastructure" was proposed. However, in April 2020, I said at the New Supply Forum that the top priority is not new infrastructure, but new hospitals. If we invest our funds mainly in building hospitals and wards during the epidemic, then after the epidemic, the level of medical services will be raised to a higher level.
Compared with consumption, I think the effect of investing in social security may be better, because the consumption multiplier effect of the high-income group is relatively low, and the consumption multiplier of the low-income group is higher. You give a rich man 100 dollars, and he will save it; But if you give to the poor, he will consume it right away. What's more, it is the responsibility of the first to help vulnerable groups such as the old, the weak, the sick and the disabled. Therefore, I advocate that more money should be invested in social security, and at the same time, the social security contributions of enterprises should be reduced or exempted, so that they can free up their energy and funds to invest.
(3) Seize the precious opportunity of a new wave of technological revolution with digital transformation
How has innovation changed in the digital age? First of all, in the research and development process, the industrial age emphasizes focused thinking, which is a kind of thinking of seeking common ground. In this regard, the Japanese are monocultural and once had an advantage. However, in the digital age, what is needed is divergent thinking, a kind of thinking that seeks differences, and to put it bluntly, "finding differences". In this regard, the United States has an advantage because of its multiculturalism.
In terms of production, the industrial age emphasizes vertical integration. In the digital era, due to the reduction of information costs, the horizontal division of labor is emphasized - the modularization of parts, the standardization of interfaces, and the globalization of production outsourcing.
The above changes are due to changes in the consumption chain. In the past, in the industrial era, the shelf life of chips needed for mainframe computers and large-scale switches was at least 20 to 25 years, so the Japanese had an advantage in high-performance and high-quality chips through meticulous carving and high investment. But now, durable goods have become fast-moving consumer goods, and mobile phones and laptops mostly take two or three years to use. Therefore, Taiwanese and Koreans have found that they can produce it at low cost, in a short time, and quickly, which is the technological advantage.
In the digital age, the decision-making environment has also changed a lot. In the industrial era, vertical centralized decision-making was emphasized, so the bureaucratic system was very developed. In the digital age, the emphasis is on horizontal distributed decision-making, so team operation is very important.
In the enterprise sector, the industrial age is mainly the most competitive sector. The Japanese have found that in the digital age, there is more competition for innovation. Because after aging, the market is shrinking, if the enterprises are going to fight for the best, in the end, all the enterprises will die. Therefore, the Japanese are now studying how to improve the quality of the product, and only by relying on innovation can we increase the added value and improve the quality of the product.
In addition, the innovation model has changed a lot. In the past, it was a Xi in Japan that the products that the company was developing should maintain a certain time distance between the products that the company was developing and the products that the company was developing. However, this step-by-step R&D model has now encountered this kind of exploratory disruptive innovation in the United States, and some people have not even finished college, so they drop out of school and go to the sea to start a business, as long as there is a good idea, venture capital rushes up, and soon the product is out, this kind of disruptive innovation defeats Japan's step-by-step development innovation.
Finally, there is the change in corporate culture. The industrial age emphasized discipline and neatness.
1. Uniform work clothes. In the digital age, the emphasis is on loose atmosphere, freedom and casualness, and personalized clothing. Only with a relaxed atmosphere and a marketplace of ideas can there be a willingness to innovate and new ideas.
(4) With a new round of reform and opening up, strive for a new round of development dividends
In the face of the current risks and challenges, if we can force us to accelerate a new round of reform and opening up, we will be able to win new development dividends. According to our research, there are at least a few such bonuses to be obtained.
First of all"Competition Policy Dividend".。At present, due to unfair competition, there is not only a loss of efficiency, but also a loss of fairness, but also a loss of welfare. We have calculated that the loss of welfare due to unfair competition can account for 228%。If we can promote competition policy and achieve fair competition, we will be able to increase GDP by 15 to 2 percentage points.
Secondly, if you canPromote the reform of state-owned enterprises, we can get the dividends of risk mitigation.
The first is to use the national railway reform to resolve the debt of high-speed rail. In that year, Japan carried out the reform of the national railway, split a national railway into seven companies, and restructured it to go public, which not only solved the problem of debt and business deficit, but also improved economic efficiency and improved service quality. Therefore, if we promote the reform of the national railway and introduce a competition mechanism, we can solve the debt risk of high-speed rail.
Second, it is necessary to use the reform of state-owned commercial banks to resolve financial risks. China's enterprise structure and financial structure are just the opposite, the enterprise structure is dominated by private small and medium-sized enterprises, while the financial structure is dominated by large state-owned banks, and structural dislocation will inevitably lead to misallocation of resources. If the commercial banks are denationalized, they can use the funds exchanged for state-owned shares to resolve financial risks and dispose of non-performing assets.
The third is to promote the reform of local state-owned enterprises and resolve the risk of local debt. We have been studying local government debt since 2003, but because we have not carried out institutional reform, the result is that the local government debt is getting bigger and bigger. If we promote the reform of local state-owned enterprises, we can use the revitalized local state-owned assets to resolve the risk of local debt.
Finally,Promote the "promotion of democracy and national promotion".to achieve the "layout adjustment dividend". It is to set up an evaluation committee in the National People's Congress, let the State-owned Assets Supervision and Administration Commission bring the data of state-owned enterprises, let the Federation of Industry and Commerce take the data of private enterprises, and evaluate industry by industry - where private enterprises can use very low cost, high efficiency, and do very well in the field, state-owned enterprises will resolutely withdraw, what to withdraw? I don't mean that we don't want state-owned enterprises, but that we should let state-owned enterprises do things that private enterprises can't do and can't do well—only in this way can we really play an important role in state-owned enterprises. That's why my proposal is called "democracy and national promotion", so that you can get "layout adjustment dividends".
Looking back over the past 40 years, there is a basic experience, or a basic law, that is, whenever we encounter economic difficulties or economic crises, we must first emancipate our minds, and through the emancipation of our minds we will promote reform and opening up, and through reform and opening up we will promote economic growth. In 2018, he made two speeches, one in Beijing and one in Guangdong, saying that it is necessary to "re-emancipate the mind, deepen the reform, and grasp the work again". If we can achieve a new round of ideological emancipation, we will be able to promote a new round of reform and opening up. If we can promote a new round of reform and opening up, we will be able to bring about new economic growth, and China's economy will be able to achieve a medium-high speed, move towards a medium-to-high-end, and achieve modernization and common prosperity at an early date. *
*Shanghai Development Research Association).