Article/Jia Kang of China Economic 50 People Forum
At present, China's economy is still facing serious supply constraints and supply constraints, which is a substantial supply side innovation that we must solve in the deepening of reform. China needs to resolve constraints through comprehensive institutional reform, unleash economic and social potential and improve the vitality of economic growth.
Deepening reform must start from the supply side At present, according to the concept of "new normal" used in all aspects, "new" in economic operation has clearly become clear, but "constant" has not yet been achieved. It is necessary to complete the bottoming in operation, connect with "growth quality improvement" after the whole economy has stabilized, and form a medium and high-speed growth platform as long as possible. In order to deal with the problem of "transformation and optimization of power mechanism" in the new stage, we need to consider "how to fully release the potential and vitality of microeconomic entities", and pay attention to correctly grasp and improve the environment and mechanism on the supply side of the entire economic system. The dynamic mechanism released by releasing new demand is naturally linked to the creation of "new supply". We also see in the document of the "13th Five Year Plan" that the central document has refined such a very clear understanding. We also consider how to drive upgrading and development on the supply side from this perspective.
In terms of the cognitive framework, we first emphasize that "macro-control with Chinese characteristics must focus on rational supply management", which has been emphasized in the past. We are the largest developing country and the largest dual economy in the world. In order to solve the problems of agriculture, rural areas and farmers, we need to actively and steadily promote agricultural industrialization on a vast territory, in coordination with new industrialization, rational urbanization and equalization of basic public services. Therefore, we must implement the measures of helping the poor and tackling the difficulties in building a new socialist countryside and integrating urban and rural areas, which need a lot of support from the supply side.
China's regional differences are still huge in the development of these years. It is necessary to effectively implement a series of strategic intentions of regional development determined by the central government through reasonable overall coordination, appropriately increase the transfer payment of the central government, control regional differences, and achieve coordinated development. Strive to achieve the goal of "building a moderately prosperous society in all respects", and provide a series of public goods and public services in terms of people's livelihood. In particular, we should implement and address the green development problem under the challenges of environmental contradictions that have become apparent.
In order to effectively promote the transformation of the mode of economic growth, we must unswervingly follow the path of creating a new country. In the process of economic and social transition, we have no choice but to support comprehensive reform. We still need considerable input of supply side factors in terms of necessary transition costs, national defense construction, etc.
These are in front of us. On the basis of summing up experience, the macro policy mix we have formed at the current stage should adhere to clearly work at the supply side. For social security, regional coordination, independent innovation, energy conservation and consumption reduction, ecological protection, deepening reform and other issues of "agriculture, rural areas and farmers", we should increase the input of factors, promote the innovation and improvement of mechanisms, This kind of supply management is the support condition for strengthening the weak links in our economic society, increasing the effective supply and sustainable development in the national economy, and it is also the objective need of environmental construction to stimulate the vitality of micro entities and enhance the power of economic development.
The efforts made in this regard will only improve rather than worsen the overall supply and demand balance, will only help maintain the "sound and fast" development situation, and will not contribute to the next period of inflation and economic overheating.
Now, the main contradiction in China's economic downturn is the deflation that everyone is already worried about. At this stage, only by paying special attention to the effective supply of such differentiated treatment, can we enhance our comprehensive competitiveness and development momentum in the international competitive environment. Therefore, supply management must be placed in a long-term perspective, and more emphasis and optimization must be put on it.
As a large developing country in transition, we should pursue the modernization of "catching up - catching up" and coming from behind. We used to rely more on the "late development advantage", but now we must strive for more "first development advantage". Such a big thinking orientation must be correct and surprising. While fully respecting the decisive role of market players, we consciously combine aggregate demand management with structural supply management in terms of government functions, In particular, rational supply management is regarded as the internal requirements and an important part of the "13th Five Year Plan" and the medium and long-term plan.
Why China should deepen reform from the supply side
Second, we emphasize that, Attach great importance to the three "national conditions".
The first major constraint of national conditions is that under the constraint of huge energy, environment and space pressure of half wall pressure type, we have the "Hu Huanyong Line", which has long been defined in terms of population density, vehicle space density and energy space consumption density, and is still very distinct in real life, half wall pressure type resource energy consumption and environmental pressure.
The extensive development of China's economy and the coefficient of density increase formed at the stage of extraordinary peak are superimposed on the basic national conditions of the half wall pressure type, plus the basic energy "coal based" determined by our national resource endowment conditions, and it is impossible to change the unusual environmental pressure of the basic state of "coal based" for a long time, This has led to the prominent contradiction faced by China's "upgraded" economy and sustainable development, which is the superposition of our basic energy endowment structure in the "high pressure zone" and "high pressure stage".
We feel that the accumulation of contradictions and hidden dangers mentioned in the central contradiction corresponds to this kind of practical problem. so to speak, The basic situation of China is an "extraordinary situation". More than one billion people make up the world's largest economy, and 94% of its population is concentrated in the eastern and southern half of more than 40% of its territory. The actual growth of resource and environmental pressure is definitely not an order of magnitude as commonly understood. To solve this "extraordinary situation", we must have "extraordinary measures", adjust and optimize the structure with supply management, and release growth space.
The second major national constraint is the arrival of the historic test stage of the "middle-income trap". How China can avoid this problem and successfully walk out of the potential threat of the "middle-income trap" is accompanied by a series of contradictory threats and thorny problems at home and abroad.
We have emphasized a while ago that the "middle-income trap" is an objective statistical phenomenon. We can continue to discuss it and must at least be prepared for danger in times of peace. Under the path of "gradual reform", China's institutional backwardness may form constraints, as well as various other contradictions. The superposition of these potential threats is before the decision-making layer. How to avoid falling into the "middle-income trap" is a historic test. It has a major requirement for optimizing the supply environment.
On the third aspect of the basic national conditions, we emphasize how the largest developing country can bridge the severe challenges of the "dual economy" and move towards common prosperity. In his later years, Deng Xiaoping was most concerned about whether some regions and members could become rich first and drive the common prosperity as they wished.
In real life, how to keep the regional gap between urban and rural areas, the income gap between residents and the property gap within the range that all aspects can bear has formed a serious challenge, which profoundly affects the supply environment and mechanism optimization. We have also noticed that the Central Committee's "Recommendations" in this regard more clearly emphasize how to deal with the problem of "optimizing income distribution" than in the past.
If we set out these three constraints, we should certainly do well in what we can do. Looking from the past to the future, we propose that in the "13th Five Year Plan" and a relatively long time in the future, the strategic goal should be to stabilize the economy on the "upgraded" growth platform, transform and improve the driving force of development, and then strive to overcome the "middle-income trap" after achieving the "comprehensive well-off society", continue from "catching up" to "catching up", and integrate "comprehensive governance of the party" Connect with the great national rejuvenation of "modernization" and the "Chinese Dream".
Such a strategic consideration is a goal that we think can be further expressed under the original "three steps" outlined by Deng Xiaoping and the understanding of the central government's "four comprehensives" from step to step. To be specific, with its strategic analysis, we believe that three stages can be envisaged.
From the perspective of the "13th Five Year Plan", we should promote reform and overcome difficulties in "building a moderately prosperous society in an all-round way", and strive to promote the major reform tasks listed in the top plan of reform since the Third Plenary Session to achieve decisive results;
In the ten years after the "13th Five Year Plan", we should take the opportunity to "build a bridge of reform and innovation and cross the" middle-income trap "to build an innovative country and connect with high-income countries;
In the period after 2031, we should continue to strengthen our soft and hard power to achieve great national rejuvenation. Under this framework, on the third level, we particularly emphasize what kind of opinions and suggestions we can put forward. In this regard, We propose to "lift supply constraints and relax supply constraints", which is the key to improving China's potential economic growth rate and transforming "micro potential" into "development vitality". Since the reform and opening up, China's economic development has made great achievements mainly by relying on the reform of the supply side, especially the institutional supply.
To explain the so-called "mystery of China's development", no matter how we discuss it now, we believe that the establishment of the most fundamental reform and opening up policy must be the first. This system supply has supported China's achievements in the past three decades, but the task of further deepening reform is extremely arduous.
Currently, China's economy is still facing serious supply constraints and supply constraints, which is a substantial supply side innovation that we must solve in the deepening of reform. The elements that support economic growth in the particularly long term, the so-called“ Power source ”The theoretical analysis mainly includes five aspects: labor force, land and natural resources, capital, system and innovation.
The main international experience shows that before entering the middle-income stage, the first three items (labor, land and natural resources) and capital are easy to generate and reflect more contributions to economic growth. General economies emphasize the so-called "factor input driven" in the first paragraph of the development process, and extensive development is related to this. After entering the middle-income stage, the latter two may make greater contributions to institutional, scientific and technological and management innovation, and are extremely critical. The so-called "total factor productivity" mainly refers to the new support that the latter two can give.
So, The construction of growth impetus in China's new era is actually the development process of urbanization, industrialization, marketization, internationalization, informatization, and the well-known democracy and legalization of politics. From the five major sources of factors in real economic life, the hybrid power system optimized and reconstructed in accordance with the law, combined with China's current actual situation, there are obvious supply constraints and supply constraints on these elements. It is necessary to resolve the constraints through comprehensive institutional reform, release the economic and social potential, and improve the vitality of economic growth.
From this perspective, we analyze how the supply constraints and supply constraints facing China's economy call for substantial supply side reform and innovation.
From the perspective of population labor intensity, labor costs are rising and demographic dividends are declining. In terms of land and natural resources, the land system should recognize that it is characterized by obvious rigidity and backwardness, and the extensive and inefficient consumption of natural resources is also a reality that must be changed, which is increasingly unacceptable for sustainable development.
In terms of the role of capital, financial support matching the diversified financing and upgrading of the real economy is insufficient, and financial repression is quite obvious. In terms of further innovation, first of all, the main body of innovation is the person who needs innovation ability, while our education system is distorted and rigid. The driving force of scientific and technological innovation is that scientific and technological personnel should improve the material conditions, and the statistical scientific and technological achievements are also in the process of rising, but the real scientific and technological competitiveness has not gradually improved.
It should be acknowledged that, The driving force of our scientific and technological innovation is relatively weak. Many of our scientific and technological investments are entangled in the characteristics that can really produce performance, which is far from satisfactory. Just how to use scientific research funds effectively has been debated for many years. In real life, we still see the rigidity and backwardness of this mechanism. In terms of reform, from the perspective of institutional supply, it should be recognized that government functions and reform are not in place. Our institutional supply still shows various characteristics of serious lag in the real process. Time relations do not carry out specific analysis of these issues.
The new supply economics that we are committed to promoting research is, first of all, reform economics. China's reform to overcome difficulties is the same reason that the reform should be put on the key point of being able to keep up with the unexpected. The focus of our thinking is how to realize innovation and structural optimization from the perspective of "increasing effective institutional supply" in the new era of "four comprehensive" overall layout. While fully respecting and respecting the market, we should rationally build the market, adhere to the close combination of economic means and deepening reform and optimizing the system.
Five major policy suggestions for starting from the supply side
The main policy recommendations we put forward have several major aspects, which are also a set of views formed in combination with the previous analysis of power sources.
First, immediately adjust the population policy, from controlling the population to optimizing the implementation of the population capital strategy 。 They were very pleased to see that the Fifth Plenary Session was clearly announcing the further adjustment of the population policy. After the announcement of the "two children alone" policy, the Fifth Plenary Session further pushed the "two children free" policy. In the future, we believe that we can further consider adapting the population policy to the needs of the medium and long-term development of population structure in the process of dynamic optimization.
The whole idea in this regard should be to transition from "population control focusing on population within the system with planned economy" to "population strategy focusing on overall eugenics and improving population quality of the whole society", and further rewrite the population capital strategy focusing on education and improving innovation ability ".
The second major suggestion is to actively and prudently promote the land system reform, gradually establish a unified land transfer system for urban and rural areas, involving a large number of different opinions and putting forward our main opinions and suggestions. We particularly value that, in the long run, after the necessary reform measures such as promoting the circulation of rural collective land can be done, it is possible to learn from the experience of Shenzhen Special Economic Zone and finally connect to the vision of "state-owned platform, integration and classification, equity leveling, gradual unification".
In real life, the experience of Shenzhen cannot be quickly and simply copied in other places. However, based on the confirmation and circulation of land in other places as an important and critical factor of production, we should have a long-term goal and connect it to a state that truly conforms to the long-term operation of the socialist market economy with Chinese characteristics. We also put forward a set of opinions and suggestions that can be expanded in this regard.
Third, we emphasize that financial reform should be comprehensively implemented and financial repression should be actively lifted. Effectively support the real economy, and the relevant management constantly gives positive information. Central Bank [Weibo] I, as a researcher, have highly appreciated and affirmed a series of distinctive reform attitudes of the central bank leadership from a purely personal perspective.
Because it is obvious that we can not avoid some decisive and critical reform measures in our analysis of interest rate marketization and RMB internationalization. Although there are still controversies of different opinions, on the whole, we should actively grasp the trend of reform, so as to remove financial repression and truly link the reform process of financial diversification to support the upgrading of China's real economy, which is directly related to what we call "crossing the middle-income trap", To stand the test of history.
The fourth aspect of our proposal is to take reform as a practical way to loosen the constraints and lighten the burden on enterprises' business and entrepreneurial activities and stimulate the vitality of the micro economy. There are also many suggestions involved, and the time relationship is not discussed. Everyone is paying attention to how the current social security system should be adjusted at the same time to reduce the actual burden of enterprises, from the free trade zone as a benchmark, further streamlining administration and delegating power, lowering threshold, negative list, and creating a high standard and legalized business environment, to how to raise the overall planning of basic old-age security to the whole social level, as defined by the Fifth Plenary Session of the CPC Central Committee, There are many things to do. These reforms are aimed at making efforts in the system supply through problem orientation, so as to further enable enterprises to obtain the environment and conditions of "the vast sea depends on fish leaping, and the sky is high enough to let birds fly".
We particularly emphasize the fifth aspect, namely, the implementation of education reform and innovation driven strategy. Only in this way can we cultivate high-level talents and effectively build an innovative country. The optimization of a series of mechanisms is subject to special research.
After the opinions and suggestions from five aspects, we feel that these suggestions are particularly focused on Power generation at supply end It can not be separated from the comprehensive supporting reform of our national administration, finance, state-owned enterprises, income distribution, price, investment and other aspects. So, further down, we put special emphasis on such a perspective, and put forward some suggestions on the "multi-party supporting reform".
First, we emphasize that to deepen the reform of the administrative examination and approval system in a combined way, we should also take into account the formation of a complete set of large-scale reform and multi compliance system reform. A few more words on this aspect, because we have discussed the reform from this perspective for many years, we believe that the reform of the administrative examination and approval system has involved deeper systemic issues. We should change from "reducing the number of examination and approval items" to "really making the examination and approval meet the quality requirements", and "legalization, systematization, standardization, informatization, synergy, and sunshine" It must be combined with the reform of large department system. The internal logic is linked together, and the coordination and linkage of functional organizations is imperative.
In addition to improving the degree of administrative legal system and complying with the requirements of streamlining institutions, we should expand the dynamic optimization design to meet the requirements of the present. In the future, we should start the national standardization work of administrative approval under the framework of the overall department system at a certain time. At the same time, special attention should be paid to planning first and multi regulation integration.
The whole national economic development that we are dealing with separately by different departments can be embodied in land development, urban and rural construction, transportation system, environmental protection, industrial layout, fiscal cross year planning, etc. All of them should be included in the comprehensive system of "multi compliance". This of course also requires the effective connection between the national unified administrative approval information database and the online administrative approval platform, to improve the informatization level of government officials, and to reengineer business processes.
The fees charged by the relevant departments will naturally eliminate some unreasonable drawbacks. This is a systematic project. Of course, this proposal does not mean that it can be achieved overnight, but from the perspective of the "13th Five Year Plan" and the deepening of the medium and long-term reform after the "13th Five Year Plan", we think it is necessary to further clearly outline the operational essentials of the reform. Further down, we emphasize that we should continue to deepen fiscal and tax reform and support the modernization of the government's governance system and capacity.
The approval of the central government's plan on fiscal and tax reform is a reform action after the Third Plenary Session of the CPC Central Committee. We are now very concerned about the original schedule mentioned by the central government. In 2016, whether the key points and basic things of reform can be done in line with this timetable as far as possible. In addition, we should orderly promote the reform of state-owned enterprises and promote the return and stock transfer of state-owned assets, which is also the direction of special emphasis on new supply in the past. We see that there are still many problems in this area, and we need to further clarify the logic of some basic reforms.
Moreover, we attach great importance to improving the relevant systems of income distribution and redistribution, and actively build an olive shaped modern social structure. At this stage, there are some hard bones that are particularly related to our redistribution problems that touch the pattern of vested interests, such as the direct tax in the fiscal and tax reform, how can we break through some of the original departments of transfer payment, truly systematize Systematization and rationalization have some tough reform tasks.
In addition, we attach great importance to meeting the needs of public services, optimizing the structure and mobilizing the potential, and actively rationalize the price formation mechanism. Some supporting factors need to be grasped. This year, the central government has issued a document on the reform of the power sector. The central government has clearly requested that the price reform should be further deepened. How can these arrangements be truly implemented, It is also a test for us, and it is also a matter for us to implement and promote reform by touching the pattern of vested interests.
Only by properly handling these problems can we better mobilize the so-called endogenous potential and vitality from economic interests, and promote all aspects of society to form effective investment under the guidance of price signals and price formation mechanisms. Of course, this also involves the PPP innovation of cooperation between the government and social capital that we actively promote.
(This article is compiled from the author's speech at the New Supply 2049 Strategy Roundtable)
(The author of this article introduces: Director of the Institute of Financial Science, Ministry of Finance, researcher, doctoral supervisor.)
