Days, the thirtieth anniversary of the Forum on Reform Review and Reflection

 Days of the Forum: Review of the thirtieth anniversary of Reform and Reflection
Sheng Hong Mao Yushi Zhang Shuguang Han Chaohua Yang Qijing at 12:56 on November 12, 2008 Institute of Economics
days is the development of democratic constitutional reform and other issues of power constraints Many people say that an intellectual or abstract demands of pro-democracy movement, and the people did not have any relationship to survive, in my opinion the reason why in the world within a system of constitutional democracy in general, especially the last two hundred years after World War II development of better, not a historical event, but with the development of modern financial system can not be separated, these two tools developed to an unprecedented level of checks and balances need to have a future, people will give the money to government officials, the need to monitor them, and finally summary of how to spend the money it spent on where are all related to the very practical problem.
Editor's note: text missing in the original form, to be added.
Sheng Hong: Hello everybody, thank you all to participate in dual Week Forum, a time when the thirtieth anniversary of China's reform and opening up, we use this opportunity to engage in a bi-weekly called the The main content is centered on the theme. before there Jinglian, Fan Gang and Zhou Qi Ren made a speech, and today we are very pleased to have the Professor Chen Zhiwu, Professor Chen Zhiwu is our day is the academic member, while he was at Yale University, tenured professor, Professor Chen's research mainly economics, particularly in the financial sector, while China's economic system of state-owned enterprises Oh great deal of research. Professor Chen's speech today titled Reform of the thirtieth anniversary of the review and reflection, not guess the specific content , but must be very exciting, now please do the speech Professor Chen Zhiwu, a please.
Zhiwu: Professor Xie Xiesheng, Professor Mao and Wang taught me such a good chance. I have to day is that several times, on days you are very much appreciated. days is that the years of China's sociology, political science, economics is very large contributions to the development aspects, I am very honored to have the opportunity to do a day then by the academic members hope to continue for days if more to do something. Today I had lecture entitled effect, I will first take a few minutes to talk about China's market reform which the understanding of the above aspects that I think should not be included.
before we talk about market-oriented reforms mainly aimed at government control in terms of, But the Chinese market over the past far more than that, but includes all aspects. because the whole society according to family kinship, friendship between economic transactions that can be achieved rapidly in the past three decades has been replaced by market behavior. here's some friends I also know that social change is also interested in the issue, with Professor Sheng overlapping areas of interest. We look at the Chinese society over the past three decades of reform will find the invisible hand of the government allocation of resources even in the price determination impact smaller, more importantly, changes in family and friendship networks play a role in promoting the rapid weakening trade, family and social networks of organizations and the role of market alternatives before the great change took place, but more by the family, family functions to achieve the transaction, the insurance function, security function, the function of mutual aid is being market-oriented, brought about by the monetary transactions between strangers to replace.
many examples in this regard, For example one day I was watching a tennis match when the Olympic line up at the door, I heard a man behind the phone, about to call a friend in Shenyang, Joe Smith, said a friend of John Doe to go to Shenyang travel, asked Zhang There is no place to live three reception, where he said you nightside not there a place to stay you, I heard in think this is a very interesting phenomenon, in the original can be implemented by the economic functions of friendship to be replaced by the market at the same time , there are many forms of non-market transactions to be. But in terms of my own words to make himself more comfortable, I will stay in a hotel, do not think my friends find a place to host a family, but also to accompany the play, we feel uncomfortable, and the other uncomfortable.
according to the original habit out is to rely on friends, I have a relative in the army which, if he knew where to travel, then we first reaction is, I am looking for someone to receive you. We prefer to spend money staying in a hotel, because the friendship network arrangements, economic transactions are not it hurt the body, but also have to repay these favors, so to say that the form of non-market transactions on the surface to save a lot of money, but actually pay the cost and cost is significant. All in all though the basis of this friendship The transaction still exists, but more and more people began to rely on such networks do not like. I sometimes go to her parents traveling abroad I will arrange the hotel for them, when they will start not too happy, but then slowly also accepted some of my friends are doing.
Similarly, the current function of the taxi and moving industry, is also very typical of the friendship through the past, based transactions to achieve. taxi industry and the moving industry is based on friendship before the trading function of the market to replace the form. I, Professor Sheng was also discussed more credit insurance and banking functions are also in this form. the one hand, this development has brought more results and more large financial sector, but also the structure of the family caused a lot of effects that feedback back to the value system of China has created a significant change. we discussed in the economics very little impact in this regard to be concerned , but in fact the significance of these effects is significant. Next, I mainly talk about the economy over the past three decades with regard to constitutional reform and the gradual approach adopted some of the negative impact brought about What are some of our previous reform has been emphasized that the state system, do not touch her, but it is not clear that privatization actually do something to privatization, we can not say so, across the river by feeling the stones in this way, the shortcomings of such a reform path What.
other day a friend of mine asked me the following questions, I think asking these questions are quite big inspiration to me, one problem is that half of this year, half of China's GDP growth in first half was 11.4%, many people began to worry, that if, if China's GDP growth rate to 9% in the following words may be in employment, income growth, social stability, the challenge of bringing larger. We will think, even down to 9% but it is still a very high growth rate, why do we feel the crisis of 9% the following to happen? mention this problem very well, compared to private ownership of the United States or other countries, if the growth rate of 5% will be felt soon, is a problem in China, this is the first one; second, why should the growth rate of 9% will solve the six million university graduates employment; third question, China has said that the investment-driven economic growth, no country can remain for decades as long as the investment rather than by consumption to spur economic growth. a national investment growth in production capacity after the expansion, but if no one comes to consumption of this how can long-term economic growth The sustain? It is better to answer, if China was a closed economy model of economic growth, then this can not continue three decades, or even years. production of so many things where it is going to sell? these issues are more popular problems, but they are pretty cut points. Today I will speak first question is, why is that 9% in China's economic growth rate to slow it, in our comparison with the Western economies, we should first put before the Chinese GDP growth rate divided by two, or about 1.8%. simply truth is that we talk about economics for consumption inside the family income has two main aspects, one is labor income, one is the value of the productive assets can bring in revenue. that is, wealth investments can bring in revenue. This is a normal consumption of private ownership of the national sources of family income, in other words also the people share the benefits of economic growth the way. But in China, The second channel is basically been closed, because the state system, the major means of production such as state-owned land, state-owned enterprises, mineral resources, including non-operating hospitals, universities, buildings, airports these assets as China's GDP, growth will add value, but the added value of non-productive assets in state ownership, public ownership arrangements, can not reflect the consumption budget of the family inside the formula, so under public ownership in China to share the fruits of economic growth the increase in labor income only This is a channel, and can not rely on the appreciation of assets, revenue growth, compared to Western economies under private ownership, the second channel still exists. So the two aspects of economic growth played an important role in both . In China, labor income must be growing very fast and the Anglo-American can make a comparison of economic growth. otherwise it is not comparable.
Next, I talk about why fast GDP growth, but Why slow consumption growth, the next response to this figure as a starting point to 1995, three groups of 07, in the past the process of reform and opening up, which groups the benefits most? which a group relative to the benefits to say the least?
as a starting point to 1995, total revenue growth in each group to see the results. the most top line represents the government revenue, the middle line represents the urban residents, the following lines represent the farmers.
a government's financial revenue (not including land use rights to sell, do not include extra-budgetary income, only income taxes and various fees) The second group is the urban residents, and the third group is the farmers. If we take 95 years after a tax reform starting point, then the three groups in the 95-year income levels normalize (standard) to a hundred, and then make a cumulative annual growth calculations, the overall state tax revenue is turned over 5.7 times, especially in the past two years, much faster accelerated. The cumulative growth of urban residents in the past 12 years, per capita disposable income increased by 1.6 times, the income of farmers increased by about 1.2 times average annual revenue growth rate, the Government average annual growth rate of disposable income 16 disposable income of urban army and the average annual growth of 8% and 6% of farmers, the average annual GDP growth rate was 10.2%, we can see that in the past 12 years, only the Government's financial growth rate is more than the growth rate of GDP. farmers, only about half of GDP growth. to the last year, the three parts of the total sum of income, government revenue about one-third of total income. urban residents and farmers can be two-thirds of the total disposable income. < br> I am more interested in how to economists concerned with the economic terms easier to understand how to be a way to convert the image to answer to revenue growth in the case of increasing the size of government, changed the angle of measurement, in accordance with the ordinary people of different historical periods of each of per capita income as a measure of the unit. the state's fiscal year revenue divided by an ordinary year, the disposable income, so you can let us know, in order to support the country's tax revenue and about How much disposable income of ordinary people a year. First of all for everyone to see the case of the Qianlong period, and then with 07 U.S. federal government's fiscal revenue to make a comparison .1766 Kangxi period of years, the tax year of the Qianlong court is 49,370,000 ounces of silver, according to Beijing at that time the average worker earns in a year, almost 24 ounces of silver a year, so commuted, then the court of Qianlong 49,370,000 ounces of silver a year, equivalent to 2,050,000 ordinary craftsmen annual income of Beijing, that is 205 million a year income to Beijing to support artisans expenditure .2007 Qianlong, the U.S. federal government tax revenue of 2.5 trillion dollars, which 2.5 trillion, equivalent to 85 million Americans last year's income.
Here we look at the Chinese government over the past three years the scale of change in financial circumstances, from which we can see why people incomes far below the growth rate of GDP growth rate.
in 1978, the reform and opening up, the Government fiscal revenue is equal to 300 million urban residents thirty million a year in disposable income, with the eighties the market, urbanization and privatization, development, self-employed with business space, which ten years, to 1995, when The Chinese government has reached the minimum size. when revenue is one hundred and fifty million of disposable income of urban residents. In 90 years after the tax reform, the decentralization of the right to tax to the local government and provincial governments, as long as local governments and the central government reached an agreement for the new local government taxes, or adjust the existing tax rate of .2007, 50,001 one hundred billion yuan of fiscal revenue, equivalent to 370 million urban residents in one year's disposable income. No matter is still 78 years to make a comparison with the U.S. federal government or the Qianlong period, compared to state-owned enterprises even without considering the income and capital gains, only tax revenues by fiscal dominance view, now is indeed the scale of the Chinese government than the history of Government at any time to be a large scale.
year with net income of farmers as a reference number, in the last year the figure was 1.23 billion net income of farmers. After reading many of my friends would say that number, plus all the farmers in the not with 1.2 billion, did you say that? This is a total problem of how to divide the cake is that the income of farmers 800 million less than the government a lot. not here requires 13 million farmers to give up their spending, to support the Government's expenditure, but rather that we put the entire country's income as an integer, and then how to divide the three groups. Looking back 78 years when the Almighty State tax revenue is equivalent to 850 million a year net income of farmers; 96 years time to reach a minimum point, as long as 300 million 8 million a year net income of farmers can support the Government's fiscal revenue, after that, straight up the data.
back to the beginning of the problem, the development of democratic constitutional reform and other power constraints, a lot of people say that an intellectual or abstract demands of pro-democracy movement, and the people did not have any relationship to survive, in my opinion the reason why in the world within a system of constitutional democracy in general, especially the last two hundred years after World War II the development of better, not a historical event, but with the development of modern financial system can not be separated, these two tools developed to an unprecedented level of checks and balances need to have a future, people will give the money to government officials, the need for them monitoring, the final summary of how to spend the money it spent on where are all related to the very practical problem. more practical example is that no matter how Qianlong period, no limit government power, but the harm to the people and the damage is very limited, at most, 2.05 million in Beijing is to the income of migrant workers squandered, and now far more than this number, and the most extreme case is the 1.23 billion people, income is squandered. The balance of power and the power structure importance of the term is no longer an abstract question but rather pockets of the masses.
In addition, I would like to say recently about the New Left, New Right, the old left, old right disputes, discussed in China over the past three decades No reliable legal system and democratic political circumstances, economic growth is not still very high up, so some people say there is no constitutional democracy and economic development of any relationship, some of the article describes some of the reasons I will not repeat, I want to emphasize that With the reform and opening up, the development of constitutional democracy is already irreversible, because more and more money concentrated in the hands of the Government, if the lack of constraints in this area, bringing the problem out of hand.
just mentioned the income of government, the public and the distribution between urban residents is a picture of how to, the following I highlight some aspects of the stock, that is, the configuration of asset structure is generally how to, and here I will mainly Government relative social comparison, as we will when the income gap and other issues, often to focus on the social distribution of income between different groups in the situation I was among the country's wealth and social configuration. I give a few figures One is to the end of 06 when, according to Ministry of Land and other resource agencies to do some estimates, the value of all land and resources is about 50 trillion yuan, Li Rongrong, other October 2007 of a bar, in 2006 the country has over one hundred and nineteen thousand state-owned enterprises. we usually may be more concerned about is the 150 central enterprises, but in addition to local governments outside of central enterprises have a greater number of state-owned enterprises, add up the numbers. all in a state-owned enterprises with assets plus a 29 trillion yuan, on average each of the assets of state-owned enterprises was 2.4 billion. state-owned land plus the assets of state-owned enterprises combined total of 79 trillion yuan This is the case of the end of 06. Last year, the Government can go back and see how much money spent, in addition to the financial budget of 510 million outside the land and if we assume the annual appreciation rate of state-owned assets and the GDP growth rate is the same, 11.4% is 79 trillion times, probably a little more than 9 trillion, with the formal financial and tax sum, then, is nearly 15 trillion trillion yuan, 1.6 trillion exclude the profits of state-owned assets (this is the concept of a flow ) so the state can spend the money last year, about 15.7 trillion yuan, divided by 25 trillion of GDP, then the proportion will be higher. we look at the national wealth is how people in the government allocation Oh, by the end of 2005 the town released under the Development and Reform Commission value of the gross assets of 10.6 trillion (not including the value of the assets of farmers), I generally estimate a little, the assets of Chinese society today, 76% of wealth in the hands of the government control, 24% is in private.
This estimate may be contrary to the impression with us, because we feel that the privatization of state-owned enterprises, privatization in order very fast pace, arguably China's social assets of the wealth should be more biased in favor of the society rather than government. but in general or some changes, but for 98 years of government market-oriented reforms, so that we at least let everyone have a piece of real estate as part of the assets, now share the wealth of people might even less than this quarter. This one in the private and public distribution of wealth between the structure of the negative impact of many. The assets of the state as the owner of wealth, China needs over the past three years, when rapid industrialization, played a very large positive effects. than India, we will find an interesting difference between the eighties and nineties, India was mainly private ownership economy, but India's capital market is not very developed, so in the past ten years, even if the Indian government wants to rapid development of industrialization, it is difficult, because India is not a public state, so can not focus on public resources to the hands of the government speed up the rate of resource allocation, while private ownership not as developed as the United States, so India has neither a developed capital market, and no concentration of resources brought about by the public convenience would be more difficult for industrial development; in China, although it can not quickly develop the capital market, but in the past three decades under the general public, if you want the transport network, infrastructure development, there is still some facilitate investment. This may be another benefit to the present the past three decades, the benefits may be greater than the disadvantages. we always rely on strategic investment and development in economic development, economic development and that sometimes equated with economic construction, when a production capacity (Production Capacity) to reach a relatively high level, when to go to economic construction and economic development equated to date. Economic construction is the concept of a production rather than consumption concept. Some time ago, and Mr. Sun Dawu has had contact, he built a large chicken factory, a large production lines, he said the biggest problem now is not the expansion of production capacity, and his line can support all started after the thirty million chickens, and now The problem is consumers can not keep up. This means that China has full use of the past three decades the industrial revolution over the past two years to bring the benefits of the development, production capacity reached the level of total surplus, this time also the government to monopolize the production of assets, then the final to China's domestic demand will inevitably rise in no way. I also wondered recently, we are talking to China's industrial structure transformation, too much weight on the heavy chemical industry, producing too much pollution, resulting in too much waste, This is also stressed that more teachers here are the development of tertiary industry, as well as changing the development model, relying on domestic demand to stimulate economic growth, remember these are very tight relationship between the capitalists and the state, because when the state the right to control the allocation of resources when the second will be money in the investment industry, said before Mr. Sun Dawu appear enlarged production capacity to consume these things that no one situation. Recently I alone in advocating the privatization to be true as soon as possible, frank In fact, I know it is unlikely, because China does not appear when the economic crisis, the government's state-owned assets to the best of all is the property of all enterprises owned by the SAC to the national interests of a fund is the fund, this Fund's average were divided into 1.3 billion for the privatization in the nationals, this is the last chance for all people to share the results of a whole people, or surface that has been made in privatization, but will back you can not accept. I say the main reason is the appreciation and consumption of assets linked to the budget equation, so that the wealth effect can be returned to the people the last time.
have dominated the government's control of property and the structure of the data I will not say, and I still talk about to continue to focus on maintain the system of state ownership of the negative impact of what. just talked about, an arrangement the government control great wealth and the other is most of the wealth of the family to master, these two arrangements arising under the final Finally, the needs of the industry and the industrial structure will be very different, because the control of wealth by the people, any economic growth, income growth brought immediately into consumption-related industries and the development of light industry, which is the structure of demand (Demand Structure), and the allocation of government control of wealth and power, the sure to bring more capital goods (Capital goods) demand, which is why we see more Chinese GDP growth, infrastructure needs of the more. So In both cases, the ownership structure of demand brought about are very different, the arrangement of private ownership, easier to light and have the opportunity to develop the tertiary industry. These two requirements under private ownership will be more , and heavy industry in the state system will be more under the system requirements, this is not a coincidence, the Soviet Union, Eastern Europe, when the planned economy in general tend to cause heavy chemical industry as well. ownership structure brought about by the different Demond Structure differences will affect the industrial structure.
I think 97-98 years when the Asian financial crisis in China, as more consumers to adopt the proactive fiscal policy, the state spend more money to stimulate consumption and to reverse the crisis and played a great role in today's global economy because the U.S. subprime mortgage crisis and other reasons more and more depressed, China is not the same approach can also be used for China's economy thriving? this certainly does not work, you know, a lot of 97,98 years highways and other infrastructure investment to bring a better return on investment, conducive to the growth of exports after accession to the WTO, when can play a significant role. But today we know that public transport has done better, and again for this talent received more return on investment will become increasingly limited, so the way to the Asian financial crisis to the subprime crisis are facing today can not be used again. So I would recommend the state-owned property assigned to each of the people who make income a relatively large base of growth, allowing China's export-oriented shift of domestic demand-driven. This allows the consumer income I have said the second approach, so that citizens become property owners by the proletarians, the last of China's economy will bring about a fundamental transformation of the positive impact.
in fixed asset investment in China in recent years, the proportion is increasing year by year, but the contribution of investment to economic growth is not the same increase, you can see the efficiency of investment is becoming less and less .
Next, I talk about why if the Chinese economy maintained a growth rate of 9% of the labor force to solve the employment problem, in fact, building the country in pursuit of employment, if the maximum, it does not need to do other changes. such as tightening of monetary policy now allows small and medium private enterprises can not hold. You may think of is to support employment growth to break the inflationary pressure will reduce the credit. Indeed, if the pursuit of maximum employment, even if the size of credit and fixed assets does not change the size of the case, the structure of fixed assets, an adjustment made to create many employment opportunities, it still can cause a large positive effect, which is Professor Mao said in the past a little more.
above the table for everyone to see the state-owned fixed assets reflects the investment in fixed assets investment in the ratio of private enterprises, 90 of the latter when the former is three times the maximum when the ratio to 5.6 times in 2006 is 4 times. If we look at the configuration structure of the employment situation created by what?
Figure 6: Comparison of new jobs is a private enterprise
above the annual number of job creation. above the convex line of response to state-owned enterprises The number of new jobs created, 8 years later until 2006, annual state-owned enterprises have lost several hundred thousand to several million jobs, 98 years after the reform of state-owned enterprises, state-owned enterprises lost 2 million jobs since .98 Although state-owned assets increased investment in fixed assets, but it will bring new employment opportunities have not increased. So from the perspective of maximizing employment opportunities, the fixed assets in the years between the state-owned and private enterprises in the configuration of the structure is exactly reversed . So I do not think we should increase the investment in fixed assets, or to loosen credit, but should make some structural adjustments, can still create many job opportunities, so whether it is monetary policy or credit policy, not to mention the pretext of solving the employment problem out, but should work on structural adjustment.
I said already a lot, keep the following discussion some time for everyone to do, thank you!
Sheng Hong: very, very exciting, we have to sum up the reform and opening up thirty year results, summary of which is more important is the issue. Today, we Chinese people more confident, more proud, because three years has undergone enormous changes in structure of our system has undergone profound changes. This is We are the pride of Chinese people, but we always said to be calm, be sober, to see problems, very good. So in what way we want to commemorate the thirtieth anniversary of us, we need to identify problems and suggest improvements to the problem, making China's economic development, institutional reform, the long-term sustained economic miracle, this is a long-term negative responsible attitude. So I think Professor Chen talked about make sense, there are data that support, and Professor Chen also raised a question for us to discuss, then we see how this issue, there is nothing that is worth further exploration place?
to discuss the following please.
Zhiwu: Professor Xie Xiesheng, I might add that I just said the SASAC's assets if placed inside the national equity fund, according to 1.3 billion per sub, then go because all state-owned assets is 29 trillion, per capita can have twenty-three thousand yuan, three people in the family can have seven million new wealth, new wealth tax per capita than the U.S. federal government a few hundred dollars potential driving force of the much larger, because the seventy thousand yuan is equal to one year or a year of income, boost domestic demand can indeed bring a lot of power. This is a specific concept, thank you.
Sheng Hong: I add that it Professor Chen, Professor Chen is better just described, but the actual situation may be worse than this, such as you said the value of state-owned land was fifty trillion, assuming fifty trillion by the State control, collection of rent, but is not. just your general assumption is that the state control of state-owned assets, the proceeds to get her and then distributed to everyone, the problem worse, she is nominally public, but the proceeds of public assets flow of private hands. We did a little while before the study, the national state-owned land rent is not collected. Where is it? been having used state-owned enterprises, as well as state-owned enterprises to lease land to others, rent to stay in their own hands. a lot of the benefits of state-owned land is not legitimate, a large number of scattered state-owned enterprises and state-owned sector in the hands of their rent as their income, all of the fifty trillion of assets in income is not, is a concept. I saw a Treasury paper to the oil, and said I want you to rent the land leased to others charge sales tax. What does that mean, is a recognition that the land leased to the oil rent to others as legitimate income, This is even more scary. This is what I said than Professor Chan said the situation was even worse, nominally state of things, but we all can not get. There is also the concept of state-owned enterprises, the total profit of 1.6 trillion last year billion, but not a cent to 1.6 trillion Treasury, are to remain in the management of these state-owned enterprises to dictate that. This is the name of the misappropriation of state property belonging to people across the country to certain interest groups. introduced this year a new policy of the state-owned enterprise profits to the maximum only 10% turned. I mean to say to add the state as owner of assets, but assets are not received. that is nominally public, but not really public, false public in the name of some public interest groups, blatant misappropriation of certain interests.
Zhiwu: Professor Sheng's just say that privatization is another reason, but because it should be public actually pocketed, think about the profits of 1.6 trillion state-owned enterprises and about 9 trillion of value-added and consumption growth did not bring much more of a flow of state-owned enterprises, the Ministry of Finance and other departments inside and did not change into the capital or new consumer demand, in this sense China's savings rate of 50%, and state ownership is also a relationship, just said seventy assigned to each family household consumption is bound to move up the enthusiasm. From this so much on the asset value of China can not be converted into power consumption, because the arrangement of state-owned system.
Mao Yushi: Chen's speech reveals a very important question. China's reform and opening up three decades, succeed or fail , I fail, the history is not reversible. China is 100% before the reform of the public sector, private capital is not, and now we are engaged in privatization, opening up three decades of private enterprises, performance is very good, we think that private enterprise accounted for half of the sky, but look now it is not the case, the most important part of state-owned system or. This structure answers many questions. just why China's Chen said the structure of demand is the main part of the heavy chemical industry, which is with China capital investment characteristics are ...