As we all know, after the founding of the People's Republic of China, China was poor and white, bicycles were called foreign cars, and matches were called foreign fires. Except for some handicrafts, even most of the most basic daily necessities cannot be manufactured.
The domestic handicraft industry from the Qing Dynasty to the first Western industry impact for more than 100 years, the national industry in the difficult tortuous development, but has never come out, a little better daily necessities and most of the machinery and equipment have to be imported from the West.
If you want to import with our own yuan, you can only use international hard currency such as the US dollar or the German mark or the Soviet ruble at that time.
How can I have foreign exchange? At that time, it did not attract much foreign investment, and could only export good things in China. In the beginning, agricultural products and primary raw materials such as coal and **, or handicrafts such as knitting and embroidery, were exported.
First, opening up needs to meet both domestic and foreign conditions
Twenty years ago, when I was in college, my teacher told us why Premier Zhu Rongji wanted to carry out drastic reforms to readjust China's economy into an export-oriented economy like that of Southeast Asia.
At that time, the intensity of reform was not insignificant, the reform of the tax system forced the local government to vigorously develop the manufacturing industry, the reform of state-owned enterprises gave up the protection of many industries, so that they faced the impact of foreign investment, the reorganization of inefficient state-owned enterprises laid off tens of millions of workers, and vigorously promoted the WTO accession negotiations and made no small concessions.
We now feel that joining the World Organization is a sure way to make money and not lose money, but in the early days of joining the WTO, what brought everyone was not hope, but more panic. I am worried that the domestic industry will be completely crushed by the West, and I am worried that the complete industrial system that I have worked hard to build for decades will be shattered.
At the time of WTO accession in 01, the aftermath of the Asian financial crisis in '97 had not yet passed, and the risks brought about by opening up made everyone feel uneasy. It sounds alarmist now, but at the time it was a real concern, and more than 20 years ago, the industrial gap between China and the West was too great. To this day, India does not dare to participate in the large-scale free ** zone, lest its fragile industry be destroyed by other countries.
There are all kinds of institutional ills in India, including the inability of large landlords to complete land reform and large-scale land acquisition, the stubborn resistance of a large number of inefficient state-owned enterprises to opening up, and the high labor costs caused by strict labor laws, forcing everyone to open small workshops for production.
Exporting foreign exchange to earn foreign exchange and engaging in an export-oriented economy is not something that can be done if you want to, first of all, the West has to open up its technology and market to you, otherwise it will be blocked for a long time like Iran and North Korea, and you will not be able to open up if you want to.
Even if the West is willing to open up the market, for example, like India, the West has always been very tolerant of him, and the technology is willing to be transferred, and high-tech ** is also willing to sell to him, but to engage in an export-oriented economy, it is necessary to carry out a thorough restructuring of its own economy.
It is necessary to improve the efficiency of the manufacturing industry, and it is also necessary to have the ability to balance the interest groups of various industries in China, because these protected industries will definitely be strongly impacted in the early stage of opening up.
Fortunately, China has caught up with the era of the West opening up to us, and has enough authority to complete the reform of domestic state-owned enterprises and the opening up of various industries.
Second, the credit of the local currency is insufficient, and the credit of the US dollar must be relied upon
Then the question arises, why do we have to engage in an export-oriented economy at such a large cost? Can't you develop yourself behind closed doors? History tells us that it certainly doesn't work.
* Although the reform and opening up in the 10s, due to the fact that it did not join the world organization, during that time China's economy did not rely much on foreign affairs, but it will face a very serious problem, that is, inflation and economic recession repeatedly alternate.
The reason is very simple: at that time, the industrial production capacity of the whole country was so large, if you work hard and quickly to make large-scale investment, it will bring huge investment demand, and even when the Three Gorges Dam was built, nearly 1 3 deputies to the National People's Congress did not approve of it. They are worried that a major project like the Three Gorges Dam will change the country's economic balance and pull up inflation.
In the first decade, although everyone's living standards have improved relatively quickly, the whole society is facing a huge problem, that is, inflation has been lingering. As long as there is large-scale investment to expand the size of loans, it will not be long before inflation will come up.
At that time, China's economy was too small, and inflation immediately rose as soon as there was too much investment, and there was no housing market-oriented reform at that time, and there were not many channels for everyone to spend money to maintain and increase their value.
At that time, everyone experienced a long period of poverty, and the desire to consume was very strong, and we all felt that Westerners were spending more with less consumption, but everyone didn't know how crazy the post-60s and post-70s parents were spending money.
The monthly income may be less than 100 yuan, and they save money just to buy a TV to watch and a radio to listen to.
After the Cultural Revolution in the eighties, it can be said that all walks of life in the country are facing a vigorous development situation, no money to go to the bank for loans, ** also facing huge construction pressure, no money directly to the People's Bank of China that is, ** bank loans.
Where does the central bank's money come from? The central bank could only print money itself and hand it over to ***, so it led to the inevitable inflation of the ** decade.
Later, it was found that this situation would not work, because relying on the first bank to continuously issue more money to maintain inefficient state-owned enterprises and some inefficient construction projects will result in inflation not coming down, and then it will lead to very serious social problems.
In view of this, Zhu Rongji was forced to change the economy into an export-oriented export-oriented economy, and the issuance of the renminbi began to be tied to the US dollar.
At that time, the exchange rate was close to one dollar to eight yuan, which means that only if a surplus of one dollar was earned, the People's Bank of China would issue an additional eight yuan yuan and buy this piece of dollars as official reserves.
Without the dollar, there would be no additional currency, and by tying to the dollar, from the late 90s, our inflation began to be controlled, because the dollar was the hard currency at that time, and all kinds of goods could be bought all over the world.
If there is a US dollar to issue RMB, then the RMB is not printed out of thin air, but is ready to be issued, specifically because of the improvement of domestic production efficiency and the reduction of production costs in order to earn US dollars, and then issue additional RMB after earning US dollars.
Since the previous production efficiency has been improved and the materials have been greatly abundant, even if the additional RMB is issued, it will not lead to inflation, so a virtuous circle has been achieved.
With the accession to the WTO in 01, our surplus has gradually increased, and the surplus of the capital account is also increasing, the so-called capital account mainly refers to foreign investors directly to invest in China to build factories.
Since there is more foreign capital, the central bank will issue more additional RMB, how to solve the inflation problem at this time? The solution is to carry out housing reform and lock a large amount of money on the house, instead of going to all kinds of purchases as long as there is money as before, and speculating on the commodities on the market.
To be sure, our last 20 years of export-oriented, coupled with real estate as a pillar industry, have made a huge contribution to the development of the national economy.
Although it has now also caused huge problems, such as serious overcapacity in foreign trade and very serious conflicts in the world's major industrial countries. Housing prices are too high to almost kidnap the national economy, and once the housing price bubble bursts, it will have a huge impact on the financial system and social stability.
Third, India also wants to cross the river by touching China
There are pros and cons to everything, as long as the pros outweigh the cons. If we don't do this in the past 20 years, we may not be much better at the stage of development and development than India, and I believe that no one wants to live the kind of life that India has.
If India had seized this opportunity to carry out reforms decisively, then the status of the world's factory may be India, and we now seem to have many obstacles to India's reforms, such as not experiencing revolution, land being occupied by large landlords, and the inefficiency of state-owned enterprises forming the protection of industries.
But more than 20 years ago, the situation between China and India was not much different, China was not necessarily much stronger than India, and India's conditions for reform at that time were not necessarily much worse than China's.
The so-called historical opportunity is like this, if it is seized, it will be seized, and if it cannot be grasped, it will not be there later, and even if India is determined to carry out Chinese-style reforms, it will not necessarily be able to achieve results.
The Bharatiya Janata Party (BJP) is also strengthening its organizational building in the same way as our party, and has also established a very complete organization from the first to the local level, and its mobilization ability is also getting stronger and stronger. India has continuously strengthened the centralization of power, and is also reforming the tax system similar to Premier Zhu's tax sharing reform, and is also establishing a unified national market, actively working to join various free trade zones, and striving to attract foreign investment.
The effect of the reform is obviously not very good, and the more it drags on in the end, the greater the resistance to the reform, especially in a short period of time at the same time at all levels, the resistance will increase exponentially, so it seems that India is very determined but the effect of the reform is minimal.
Recently, India's deficit has not narrowed, but expanded, resulting in India having to rely on exporting grain or exporting people to work in other countries, and relying on remittances from the diaspora to pay for imported goods.
4. One cannot step into the same river twice
With China's great achievements in reform and opening up in the past, India is naturally learning from China, whether it is strengthening the centralization of power, reforming the tax system, forming a unified national market, or attracting foreign investment.
The current international environment is completely different from the international environment that China faced at that time, China was facing the general embrace of globalization in the West, and felt that the global ** would help to improve the well-being of all countries, and the West had an advantage at that time, and felt that even if some low-end manufacturing or part of the mid-end manufacturing industry was ceded, it would not pose a threat to Western industry.
They have not believed that China's economy will improve qualitatively, nor do they believe that China's manufacturing industry will one day threaten their local manufacturing industry, but the current situation is that Europe and the United States in the face of China's competition began to retreat, except for a few areas still have an advantage, in most of the manufacturing industry has been occupied by China has a complete advantage.
The United States is now facing a severe industrial hollowing, and now the United States does not want to establish a separate industrial system outside of China, but to promote the return of manufacturing to the United States to realize the reindustrialization of the United States, and even snatch some high-end industries from Japan and South Korea from the European Union.
As for the low-end industry, it is estimated that it is not willing to be deployed in India, but directly moved to North America to be deployed in Mexico and the southern United States to form industrial support.
In view of the current international situation, it is impossible for the West to sincerely help India achieve industrialization, but only to use it as a means to contain China.
Even if the West wants to help India industrialize, they do not have the ability to do so, because industrialization requires a lot of infrastructure construction, and even if India overcomes many obstacles and realizes large-scale land acquisition, the infrastructure construction of Europe and the United States is still inadequate, because they have basically not launched large-scale infrastructure projects in the past few decades.
If the experience projects are handed over to them, the money may be spent, but the work has not been completed, and in the end, it is possible that the orders for these infrastructure projects will flow to China, which will increase China's foreign demand in disguise.
Even if they want to transfer the low-end industries to India, it is impossible, because most of the low-end industries are now in China, and it is impossible to smoothly transfer these industries to India without China's cooperation.
Even if many factories are invested in Europe and the United States, it is easy for you to get in, but it is not so easy to get out. It is not so easy to remove machinery and equipment, to remove skilled workers and engineers, there are no young engineers and no young skilled workers in Europe and the United States, these engineers and skilled workers are already Chinese.
Fifth, India will only take advantage of small advantages, and will not have great wisdom
If India does not turn its face with China, in order to win over India and balance the ** deficit with India, China will also transfer some industries to India, and will also help India build infrastructure.
In normal bilateral relations, the international relationship needs to be roughly balanced, and India has a long-term deficit between China and India, which is certainly not sustainable. In order to balance the deficit between China and India, either China is interested in buying some Indian goods, but India does not have much for China to buy.
The other is to increase the export of capital to India, for example, to provide loans to India to help India build infrastructure, or to require India to open up investment facilities to invest and set up factories in India, so that although India has a deficit in the current account account, India has a surplus in the capital account from China, and India may achieve a balance as soon as the two projects are added up.
Before 2020, the relationship between China and India was actually moving in this direction, and China had also reached the stage of exporting capital and infrastructure capacity to the outside world, because of the overcapacity of China's construction industry.
At least some of the dollars earned from India will have to flow to India so that it can be balanced, so that India has more purchasing power to buy more Chinese goods in the future, and the two countries themselves have dealings with each other, so that business can be sustained.
China's goods and machinery and equipment are cheaper and easier to use than those sold in the West, which is equivalent to helping India save valuable foreign exchange, we know that India's foreign exchange has always been very scarce, it is said that if this development continues, needless to say, another ten years of development, Sino-Indian relations will rise to a new level, border conflicts are also very likely to be controlled, and even through peaceful means to resolve border disputes.
It is a pity that India was instigated by Trump, thinking that joining forces with the United States could bring down China, force the manufacturing industry to leave China, and make India the new world factory, but their ideas are very good but they underestimate China's strong organization and mobilization ability, and instead of letting them succeed, Sino-Indian relations have deteriorated extremely.
At home, we are constantly reflecting on whether we should help these hostile countries to build new infrastructure, or whether we should invest in these countries, and whether the infrastructure construction may be used by them for military purposes to increase their border advantage.
Even if it goes to India to invest, for example, although Xiaomi made money at the beginning, the money cannot be brought back to China at all, but it is confiscated by the relevant departments of India in various names.
For such an unfriendly country, the investment risk is so great, then we will carry out normal foreign affairs with him, and do not invest.
Even some sensitive equipment to the outside world, we can't sell it to him, if he has to buy it, just buy it from the West, and would rather make less money than increase the risk for himself in the future.
The annual deficit between China and India is hundreds of billions, and more than 20 years ago, the amount between China and the United States was 100 billion US dollars, which shows that India's deficit is very large.
Now that China and India are in this situation, India has no way to ask China to make capital investment in it, even if it boycotts Chinese goods, it is useless, and later it was found that it cannot be replaced at all, and if you don't buy from China, you have to buy from other countries, and there is not so much foreign exchange.
As for the long-term imbalance of India's economy, how long his purchasing power can last, it is not a question that we should consider, it can only be said that it is not easy to make money from Indians, it is not easy to earn money from Indians, it is a year to earn money, of course it is a good thing to have money to earn, no money to earn proves that India's economy is extremely weak, and it is even better that there is one less fierce rival in the southwest.
India has not been able to develop for so many years, not without reason, this country does not have a grand strategy at all, if we are India, it must be a bet on both sides, or if it bets, it will be 100% invested, just like when the Soviet Union sent troops to North Korea, it fought particularly beautifully, won the respect of the Soviet Union, and got more than 150 engineering aid.
India can neither completely turn to Europe and the United States to let Europe and the United States support it at any cost, nor can it have the ability to ride the wall on both sides and take benefits from both sides, the consequence is that China only makes money from him and does not invest in him, and Europe and the United States only fool him and do not invest in him, so that India's road to industrialization is still far away.