Chapter 3 Chapter 2 "4 Trillion" Rescue Market: Quantity is more important than Quality

"4 trillion" saved who?Private enterprises are the main undertakers of national employment and the hope of economic recovery.The current government bailout has obviously shifted the main force of investment to state-owned enterprises. Wei Jie: I think the government's "rescue" is like shooting a gun. When the gun is fired, it will always detonate others, because the country's "bullets" are limited.If I want to "play" investment, I need to stimulate both investment and consumption; if I want to "play" people's livelihood investment, I need to stimulate productive investment and asset-based investment, as well as consumption.However, we don't have the zoom function now, one shot is one shot, and it can't detonate others, which is very problematic.The reason is that the "4 trillion yuan" investment is basically aimed at state-owned enterprises, and private enterprises cannot get it. This deviates from the original intention of the government to start this plan.

The focus of employment protection is to protect enterprises. The key to employment is to save enterprises. The core issue of saving enterprises is to reduce corporate taxes and reduce their tax burden. When enterprises are activated, employment opportunities will increase accordingly.In this way, the product has room for price reduction, and people will buy it when the price is low, the market will open, and the enterprise will be able to survive.For export enterprises, it is necessary to increase export tax rebates and reduce or cancel export tariffs, which will stimulate the enthusiasm for increasing it, reduce the burden on enterprises, and increase profits.For enterprises that do not export, it is necessary to reduce taxes and fees and reduce the burden on enterprises.

Simultaneous implementation of the two can have an immediate effect on activating enterprises and increasing employment, and is the most effective way to solve the economic recession. Once Obama was elected, he announced the creation of 2.5 million jobs, but did not say how much GDP would increase.With regard to the "4 trillion yuan" investment plan, you strongly called on the government to target employment rather than GDP, and this view is also generally accepted.What is the basis for your appeal? Mao Yushi: In the United States, as soon as Obama was elected, he announced the creation of 2.5 million jobs, but did not say how much GDP would increase. It seems that he did not pay much attention to this point.In China, the government departments care about GDP, and the common people care about employment.If only the GDP goes up, but the unemployment trend is not curbed, it will not benefit the common people, but the officials will look good in terms of political performance and face.Of course, the two are also related. GDP growth will also increase employment, but the two are not a completely corresponding relationship. The consequences of targeting employment and targeting GDP are obviously different.Achieving GDP growth through investment in fixed assets is a visible and tangible "explicit project"; improving social well-being through people's livelihood construction is an invisible and intangible "hidden project".There are differences between the two in terms of performance.Now there is also a game of interests in government departments, and there is a trade-off between explicit projects and hidden projects.

For example, how to maximize the utility of the allocation of "4 trillion" investment?China's current total output value is about 25 trillion yuan, and 4 trillion yuan accounts for nearly 20%. This is a large proportion and we must not rely on explicit projects.At present, the concern of social security is still the urban population, and the focus should be shifted to the rural areas.Most of the urban population already enjoys public medical care, but farmers have not really enjoyed the rights and interests of public medical care, including education is also biased towards the city.There is also housing, which is purely sacrificing the interests of farmers to create conditions for urban residents to buy houses, which is an act of "robbing the poor and helping the rich".It should be taken from the hands of the rich to help the poor, but the current model is to take it from the hands of the poor to help the rich buy houses.There is no fairness or efficiency, and it breeds corruption.More and more public opinion believes that only by working hard on people's livelihood and changing the situation of the country being rich and the people poor, can the problem of domestic demand be fundamentally resolved, thereby stimulating a virtuous cycle of the economy.In the early days of liberation, the country was poor and the people were poor, but now it cannot be said that the country is rich and the people are poor, and the people are still very rich.To be exact, the country is rich now, and the common people are also rich.The real problem lies in the problem of big government and big finance. The expenditure of government departments is very large, and there is a lack of supervision.

At present, the main body of wealth creation is the people. If the people are not rich, the country cannot become rich.But the proportion of the rich is too disparate. From the perspective of the distribution of GDP, the country is distributing more and more, including taxes and monopoly state-owned enterprises. The profits are getting higher and higher. Not enough to get land from farmers.Now it is necessary to expand domestic demand, reduce the country's distribution, and increase the distribution ratio of the people, such as tax cuts.In addition to tax cuts, the focus should be on increasing privatization of state-owned enterprises and reforming monopoly sectors and industries.For example, railways have low efficiency, large waste, poor service, and the integration of government and enterprises.Civil aviation and railways are different, and the service of civil aviation is much better; even railways are not as good as roads, because roads have competition, so the service has been greatly improved.Railways are not much different from 30 years ago.The problem with the railroads is a monopoly problem.Railway monopoly is hard to avoid because there are tracks.Whoever owns this track has the monopoly right, unless another track is built.Similarly, the power grid is also a monopoly, unless the network is repaired in addition, it can compete.From the perspective of resource allocation, if one network is enough, building another network is a waste of resources, which may be the case with electricity.But for the railway, the railway is not enough, we hope to attract private capital.

What are the risks of the "4 trillion" bailout?Mr. Zhang, you are a senior economist. You have supported and participated in China's economic system reform for a long time, and you have profound thoughts on the domestic economic situation.Based on your observations, where do the current problems in China's economy mainly come from? Zhang Zhuoyuan: I think there are two main reasons.First of all, China has indeed developed too fast in recent years, and the ultra-high-speed economic growth is unsustainable; second, external shocks, the deterioration of the world economic environment, and the natural problems of China's export-oriented economy have in turn affected the country.The superposition of these two factors has resulted in a decline in domestic economic growth.I remember that as early as 2004, I said that China's economy was a bit overheated, and problems would be exposed sooner or later. Since the second half of 2008, China's economy has been facing an imbalance after more than five consecutive years of ultra-high-speed growth. In addition, the impact of the international financial crisis has become more and more severe, and the economic growth rate has declined significantly. The GDP growth rate in the fourth quarter fell to 6.8%. , In December, electricity production and consumption, import and export trade, fiscal revenue (November) even showed negative growth.Judging from the current situation, the trend of economic contraction has not yet been contained.

We have seen the practice since the founding of the People's Republic of China and the 30 years of reform prove that double-digit growth, especially consecutive years of double-digit growth, is not sustainable, even if there is no financial crisis. With such a high dependence on exports, it is obvious that there will be a correction.In addition, the environmental and resource costs of exporting too fast are too high, so the country has also adjusted its policies in time: expanding domestic demand and maintaining growth.When the "4 trillion" investment was just proposed, some people worried whether this was drinking poison to quench thirst or fighting poison with poison.With such a huge investment, will there be new inflation in the second half of the year?Zhang Zhuoyuan: In fact, inflation is not the main problem. The most worrying thing now is to use further excess capacity to control the current excess capacity.I think it is easier to expand investment demand, but it is particularly difficult to expand consumer demand.The policy put forward by the Central Economic Work Conference is correct, with expanding domestic demand as the main approach, transforming the mode of economic growth and adjusting the structure as the focus and main direction of attack; and reform and opening up as the driving force, improving people's livelihood as the starting point and end point, these All are correct.

The main problem now is that it is risky to rely on expanding investment to maintain growth. If the investment is habitually mainly invested in "iron public infrastructure" (railways, highways, infrastructure) and some heavy chemical industries, it may cause a new round of production capacity. excess.Now it seems that the central investment projects are more reasonable. There are many projects to improve people's livelihood. This kind of investment can help improve consumption levels, but local investment projects are hard to say.Reports revealed that some high-energy, high-energy, resource-intensive (high energy-consuming, high-pollution, resource-based) projects that were considered unavailable in the past are now being considered for relaunch.This may form a vicious circle, seeking to use a new round of overcapacity to overcome the original overcapacity, resulting in the predicament of continuous self-circulation of "adding more noodles when there is too much water, and adding water when there is too much noodles" that was common in the planned economy period in the past.Once local investment gets out of control, the central government may not be able to do anything about it in the end.Isn’t it the loose macro policy now? As a result, Chinese banks issued 1.62 trillion yuan in new loans in January, more than double the amount in the same period last year.There are signs that some borrowers may have funneled cash into speculative markets rather than the real economy.Many investors believe the surge in the Shanghai Composite Index in 2009 was partly due to loan money being funneled into the stock market rather than being used for operations that could improve China's economic outlook.This is terrible!

"Street Light" is the best cop.In the United States, after the government bailout policy was passed, a series of practical monitoring measures were introduced immediately, including the establishment of an economic recovery plan transparency and accountability committee, monitoring the use of funds, and setting up a special website to announce the whereabouts of funds in a timely manner; in China, the State Council When Premier Wen Jiabao met with Chinese and foreign journalists during the "Two Sessions", he said that the new "4 trillion" investment projects have been proven, and will be fully disclosed, and the whole process will be subject to supervision.How should the government's rescue policy ensure the transparency of project approval and implementation?

Jiang Ping: We know that one of the greatest powers of the parliaments in western countries is to supervise the budget. How the money is spent, of course taxpayers have the right to know where it goes. Borrowing money from the common people (national debts, local debts) must be resolved through the parliament.The two bailout plans in the United States were passed after extensive review by the House of Representatives and the Senate.This is the greatest power it can wield over the government.Looking back at our country, the "Budget Law" is much worse. The "4 trillion" does not need to be reviewed by the National People's Congress at all. In this regard, the budget supervision of the National People's Congress is not satisfactory.

I also served as a deputy to the Seventh National People's Congress. When discussing the budget, I still adhered to the principle of confidentiality, listed a few items in general, and took them back after reading them. The 2009 budget is so huge that the Ministry of Finance has the right to increase it at any time, and the Budget Law is useless.However, despite this, the "4 trillion" investment should be transparent, and the disclosure of government information is the most important channel for effective supervision.Take the Obama administration as an example, the salaries of executives of companies that have passed the bailout are subject to national supervision, but the US company AIG distributes bonuses to its managers, which is obviously illegal.Although the financial world has its own rules, and some people say that accepting state subsidies does not mean changing their original system, you have violated the laws of the United States after all.Therefore, after there is a law, it must be done in accordance with the law. If this law is circumvented, the government has the right to get back the taxpayers' money.This requires, on the one hand, supervision by the masses, and on the other hand, the government should stop violations in a timely manner.There is a saying in the "Sunshine Act" in the United States in the early 1930s: "Street lights are the best police." Only in the case of transparency can the occurrence of crime be reduced.Doing it opaquely in the dark all the time is the most corrupt behavior. Therefore, the greatest public power now is to solve the problem of transparency.Only by addressing transparency can we ensure that public power is not used by private power.Many scholars and netizens have asked the National People's Congress to play a greater role in supervising government work, especially in the allocation and actual use of the "4 trillion" stimulus investment plan. During the "Two Sessions", Wu Bangguo, Chairman of the Standing Committee of the National People's Congress, specifically mentioned in his report on the work of the Standing Committee of the National People's Congress that the supervision of the National People's Congress is not a "counterplay" with "one government and two courts".How do you understand this?Jiang Ping: Comrade Wu Bangguo’s talk about the National People’s Congress and the government is not a “contradictory drama”. What I understand more is that in a crisis situation, I think there should be unity of thought in decision-making, unlike a two-party system or a multi-party system, where the opposition party is Deliberately picking the fault of the ruling party.But on the other hand, it is also correct for supervision to sing "opposite drama".We do not engage in separation of powers, but we do not deny the power of supervision.The highest legislation and supervision are the two major functions of the National People's Congress.There must be a division of labor and restrictions on power. Without it, corruption will occur. This is an obvious truth.Supervision is to see what problems you still have in the process of law enforcement. For example, the supervision of the "Product Quality Law" and the safety supervision of industrial and mining enterprises require you to find faults and problems from inside. From this understanding, you need to sing "opposite dramas" .