Opinion Leader | Zhang Bin
The reform of the macroeconomic governance system for the new era mainly includes three objectives: first, to enhance the momentum of economic growth; Second, maintain macroeconomic stability; Third, promote social justice. These three objectives correspond to corresponding policy tools.
To enhance the momentum of economic growth, it is mainly to improve the level of science and technology and optimize the allocation of resources through policy tools such as business environment policies, domestic and foreign trade policies, industrial policies, infrastructure construction, etc., so as to improve production efficiency.
To maintain macroeconomic stability, we need to balance aggregate demand and supply, promote price stability and full employment, and achieve reasonable growth in labor income and corporate profits through counter cyclical monetary and fiscal policy tools.
To promote social justice, it is mainly through redistribution policies, social welfare and public service policies to improve the living welfare of low-income groups and fair competition opportunities.
In practice, it is necessary to clarify the types of problems and find the matching policy tools. Various policy objectives and tools should be coordinated and linked with each other, and should not be confused.
Conform to the changes of the new era
Improve the momentum of economic growth
The biggest difference between China's current economic growth momentum and the past is that large-scale investment will no longer drive productivity progress and economic growth. In the previous period of rapid economic growth, the main way for China to achieve economic growth was through large-scale investment in the industrial and construction sectors, which led to rapid technological progress in these fields and quickly narrowed the productivity gap with developed countries. The market-oriented reform and opening up have greatly stimulated the vitality of the private economy and made it actively participate in this process, ensuring the efficiency of this process; The government's various preferential policy environments for industrial development and investment for a long time are the accelerators of this process.
After entering the new development stage, China's industrial and construction sectors have reached a relatively high level of productivity, formed a sufficient supply capacity, fully met market demand, and the growth potential of these sectors has also declined significantly. This is a natural phenomenon after the economic growth reaches a certain stage. Europe, Japan and South Korea have also encountered similar phenomena in the same development stage.
Corresponding to the trend of declining growth potential of the industrial and construction sectors, The power source of economic growth in the new development stage will gradually shift to knowledge and technology intensive industries , such as high-end manufacturing, education, scientific research, health care, sports and entertainment, commercial services, finance, social public services and other industries. On the one hand, these industries can meet the needs of consumption upgrading at a higher income level, on the other hand, they can meet the needs of further industrial upgrading and have higher growth potential.
The common attribute of these industries is that they need more knowledge and technology input and more human capital. Therefore, market mechanism and opening to the outside world are still essential efficiency guarantees to promote the development of these new industries, but the government's policies to promote the development of new industries can no longer focus preferential policies on industrial sectors and investment fields as in the past.
To meet the needs of the new stage of development, the government's focus on improving the momentum of economic growth is to do what the market will not do, can not do, can not do The main content is to further improve the business environment, promote fair competition in the market, enhance scientific research and technological capabilities, and improve infrastructure and public services.
The central government and local governments need a reasonable division of labor: the central government should establish and maintain a unified national market, ensure a fair market environment for competition, promote basic research and major scientific research projects, and improve major national infrastructure construction; The economic work of the local government focuses on improving the local business environment, improving infrastructure and public services, and developing the local economy according to local conditions. Some local governments with financial support, management experience and management ability can take an active part in the cultivation of emerging industries. Local governments should pay attention not to overstep the boundaries, compete with the market for profits, and avoid market distortion.
Do a good job in general demand management
Maintain macroeconomic stability
At present and in the future, the main challenge of aggregate demand management is to prevent the economy from being too cold and the price level from being too low, which is determined by the characteristics of the development stage. In the early and middle stages of economic development and industrialization, the supply capacity is weak, and the economy is more frequently plagued by excessive demand and inflation. The macroeconomic characteristics are "easy to hot but difficult to cold". After the level of economic development and industrialization reaches a certain height, the supply capacity will be greatly improved, and the economy will be more likely to encounter the problems of insufficient demand and low price level. The characteristics of the macro-economy are "easy to cool but difficult to heat".
The development stage decided that the main task in the past was to prevent overheating, and the main task now is to prevent supercooling. Under the continuous environment of insufficient demand, the growth of corporate profits and residents' income is sluggish, new employment is difficult, the sense of economic growth is not strong, confidence and expectations for the future will continue to weaken, and financial risks and social instability will also increase. The harm of insufficient demand not only makes resources underutilized, but also affects confidence and expectations. Therefore, we should be highly vigilant and resolutely stop the continuous shortage of demand.
The key to managing aggregate demand is to make full use of standardized monetary and fiscal policy tools. There are many factors that trigger the insufficient demand, which may be the sudden decline of external demand, the bursting of asset price bubbles, or the unsustainable debt. No matter what the trigger factor of insufficient demand is, it will form a continuous fermentation and vicious circle between declining income, declining expenditure and credit crunch. The key to breaking the situation of insufficient demand is to break this vicious circle. International and domestic experience shows that, As long as counter cyclical policies are in place and market expectations are changed by forces that exceed market expectations, we can get out of the situation of insufficient demand.
Monetary policy should play the role of policy interest rate in regulating aggregate demand as much as possible. The policy interest rate is the most powerful, flexible and accurate countercyclical policy, and it is also the most important and commonly used policy in countercyclical regulation in the world. It should be noted that whether it is the RMB exchange rate, capital flow or banking operation, the most fundamental support or China's economic fundamentals. Improving economic fundamentals by reducing policy interest rates is a more fundamental support for exchange rate, capital flow and banking operation. If monetary policy is based on the principle of "we are the main body", we should give priority to moving out of low inflation and improving economic fundamentals.
Fiscal policy should play the role of counter cyclical policy, make good use of government credit, and increase expenditure through low-cost borrowing. At present, the growth rate of China's fiscal revenue is slowing down, especially the growth rate of local governments' comprehensive financial resources is slowing down more obviously, which brings difficulties to the growth of government expenditure, and it is difficult for government expenditure to play a counter cyclical role. In this situation, The government needs to support the growth of government expenditure by expanding debt, and truly play the counter cyclical function of fiscal expenditure. We should learn from the lessons of past stimulus policies, avoid high cost and short-term financing from commercial financial institutions for public and quasi public government investment projects, and give more play to the financing support function of policy financial institutions for infrastructure construction.
Let migrant workers live in cities
Promote social justice
There are still more than 180 million rural migrant workers in China. Most of these people are unlikely to return to work and live in rural areas, but at the same time, it is difficult to really settle down in the city where they work, and to enjoy the social welfare security and various supporting public services in the city. Cultivating this group of migrant workers from rural areas into new citizens and new middle-income groups, making the lives of hundreds of millions of families change dramatically, is the aspiration of the people and a great promotion of social justice.
China has been in the middle and late stage of industrialization, and has the ability to let rural migrant workers settle in cities and enjoy urban life. Rural migrant workers need to rely on "two legs" in terms of housing security, basic education and medical services, and social welfare security. On the one hand, it encourages and supports social capital investment by lowering the access threshold, and uses market spontaneous forces to meet demand; On the other hand Expand the supply of residential land in the metropolitan area, improve the infrastructure and public services in the metropolitan area, and give appropriate subsidies to newly arrived or low-income families.
In the long run, the settlement of rural migrant workers in the workplace will not bring greater public financial burden. Rural migrant workers settling down in cities will promote the economies of scale and consumption capacity of cities, and improve the tax base. Whether from the past experience of China or from the international experience, more people living in cities bring about rapid growth of financial expenditure and income at the same time, which does not affect the sustainability of public finance.
In the new development stage, many traditional views of things cannot keep up with the development of the new era, and many traditional practices that once played an important role in the past are no longer applicable, which requires us to deepen reform. At the same time, it should be noted that people have inertia and society has inertia. It is difficult to change traditional ideas and practices in a short time. In the process of promoting reform, we cannot rely on all fields to complete the reform overnight. The pragmatic approach is to find the main contradiction of the problem, make breakthroughs on the point, and lead from one point to another. The gradual reform model and the reform pilot zone model in the past reform process of China followed this kind of reform wisdom and made great achievements.
The reform of the future oriented macroeconomic governance system is a systematic project. In the process of promoting the reform of the macroeconomic governance system, we need to ensure the right direction, and we also need to distinguish priorities according to the macroeconomic environment at that time. Improving the driving force of economic growth and promoting social justice are structural reforms and long-term challenges. Long term efforts will be effective. Achieving macroeconomic stability by improving the level of aggregate demand is an urgent challenge in the near future, and if the policy is strong enough, it can achieve immediate results.
Source: Learning Times
(The author of this article introduces: Senior Researcher of the China Finance 40 Forum, former Director of the Global Macroeconomic Research Office of the Institute of World Economy and Politics, Chinese Academy of Social Sciences)
