China 's Economy: Stimulation or Reform?
Investment dependency is a difficult problem for China's economy. In terms of institutional economics, it is a path-dependent trap. Only endogenous power to promote sustained and stable economic growth, has experienced more than 30 years of rapid growth, the Chinese market will replace China's manufacturing engine of China's economy.
Recently, an official photo of kissing approval on the network caused widespread concern and comments. May 27, Zhanjiang City Mayor Wang C out of the Development and Reform Commission door, nearly 70 billion yuan for the steel base project to pass, can not suppress the joy of the heart and just kissed the document just approved. Zhanjiang City, the project is only the tip of the iceberg, the first four months of this year, the Development and Reform Commission approved the project is 2 times last year, the occasion of weak economic growth, the injection of appropriate liquidity is necessary, but more important is the deep-seated adjustment of economic structure.
Recently, the Development and Reform Commission approved the project significantly accelerated the pace of some infrastructure projects started. People doubt whether the big projects can lead to China's sustained economic growth, is conducive to the adjustment of economic structure. After the 2008 economic crisis, the opening of the 4 trillion stimulus plan, while achieving the eight goals, but the negative effects are gradually revealed, such as some low-level projects launched repeatedly, local government debt soaring inflationary pressures upward.
At the same time, the Ministry of Railways, China Banking Regulatory Commission, the Commission and other ministries and commissions to the private capital open, and guide private capital into the banking, railway, telecommunications and other monopoly industries. The core proposition of China's economic structural adjustment lies in the delineation of a line between the government and the market to realize the equal rights between the private capital and the state-owned assets.
Stimulation, or reform? Is indeed the choice facing the Chinese economy. Economic stimulus plan, looks beautiful, but for the spontaneous generation of market order may not be a good thing. Large-scale projects can boost the economy, and high-rise buildings and bridges and tunnels are visible and tangible achievements, which can attract a large number of low-end labor force. In the sluggish consumption, exports blocked the case, investment has become the core driving force of China's economy. The World Bank estimates that over the past 30 years, China's economic growth in the 6-8 percentage points from the investment, in other words, investment for China's economic growth contribution to two-thirds.
Investment dependency is a difficult problem facing the Chinese economy, has not been able to break, in terms of institutional economics, the path dependence is a trap. On the surface, investment, consumption is weak, and the deeper reason is that institutional arrangements. Because of limited investment channels and inadequate social security, residents can only deposit money in banks, while banks earn interest spreads, while also willing to lend to local governments and state-owned enterprises. Behind the investment dependency is a disguised distribution of the wealth of Chinese residents, if the money market is more market-oriented, financial suppression can be lifted, the impulse of investment will naturally be contained.
Some economists believe that China's new round of economic stimulus plan began, this round of stimulus plan will not reach the size of 2009, but according to the current project approval, there are about 1-2 trillion amount. Behind each big project are huge capital investment, the rapid growth of local GDP, official performance of the gains, therefore, local governments have irresistible investment impulses. Market economy is an invisible hand, while the big project is the visible hand of the government into the market body, although it can cause short-term excitement, but for the development of the market itself, help limited.
Fiscal stimulus itself is the form of government revenue through the form of revenue, and then re-allocation of funds, in the process there are many problems. First of all, the tax limit, how much tax is considered reasonable, the current tax burden of China's private enterprises, operating difficulties; followed by soft budget constraints, because there is no clear targets of income constraints, investment efficiency, duplication of common, Resulting in some non-repayment of debt.
Recently released economic data show that from January to April this year, in the industrial enterprises above designated size, the private sector performed well, profits of 425.7 billion yuan, an increase of 20.9%, while state-owned and state holding enterprises profit of 457.8 billion yuan, up Down 9.9 percent. Private enterprise is the center of China's economic innovation, but its operating environment, financing conditions to be far less than state-owned enterprises or central enterprises. China's economy after 30 years of catch-up, the need to enter a period of independent innovation, relying solely on large-scale investment projects difficult to achieve technological innovation and beyond. And innovation, you need to give more room for civil capital and freedom.
Although the national ministries and commissions to private capital beckons, but the investors reacted coldly. The Ministry of Railways debt, allowing private capital to enter, was suspected of paying for the huge debt of the Ministry of Railways; relax private capital restrictions in the financial sector, but mainly concentrated in rural banks, and village banks less than 150 billion of assets, compared to China's more than 100 trillion in bank assets, this is just a "teapot in the storm," it. The sustained development of China's economy, the need for private capital, private enterprises with an equal perspective, to provide a standardized platform, whether state-owned enterprises or private enterprises are an integral part of China's economy, there is no eldest son, second son or bastard, should Confidently contribute to China's economic innovation.
Only endogenous power to promote sustained and stable economic growth, has experienced more than 30 years of rapid growth, the Chinese market will replace China's manufacturing engine of China's economy. Just rely on cars, home appliances to the countryside or trade-in such short-term stimulus to the wealth stock into GDP, not a permanent solution. After the financial crisis in the United States, in addition to rescue the market, there are large-scale tax cuts to tax incentives to stimulate market vitality, two-pronged approach will help out of the quagmire of the economic crisis. The lesson of the euro zone crisis is that only rely on tightening to adjust the economic structure, may Greece and other "European pig country" into the corner of the economy.
The current Chinese economy needs a moderate financial investment and market cultivation combined with the exclusion of "stimulating the economy" concept, a gradually mature market economy has a certain degree of self-regulation and immunity, "stimulate" itself is the market distrust, Against the goal of building a market economy. The deep-seated reform of China's economy should focus on adjusting the economic structure.