Chapter 9 Chapter 8 People Oriented: The focus of the next thirty years is "enriching the people"

How to reduce unemployment and improve economic efficiency?From the Keynesian theory and the Phillips curve, one is the problem of unemployment, and the other is the problem of inflation.China's unemployment rate is already rising, while the stock market and property market are rising. Will this constitute a factor of stagflation?From the perspective of aggregate supply, how should we adjust the macro-policy structure and reduce the unemployment rate to improve economic efficiency? Liu Wei: The stock market and real estate market are the prices of an asset product. They are relatively microscopic and cannot constitute the stagflation of the entire economy for the time being.From a macro perspective, stagflation is the parallel increase in the general price level and the unemployment rate.The general price level and macro issues are not about a certain product such as the stock market or the property market.Because the situation of stagflation is very complicated and it is very difficult to choose macro policies, we must now consider: first, whether the effect of this round of stimulating growth will be manifested as soon as possible to increase employment.If it appears faster, it means that the recovery is better (even if there is inflation), and the "cost" of our policy U-turn will be greater, so we have to tighten the macro policy to control inflation; second, if This round of policy continues to bring little growth, and the unemployment rate is not low. Once inflation comes, we dare not spend a lot of money to control inflation, because the pressure of unemployment is too great.Therefore, the choice of this round of macro policies and the effect of stimulating growth are crucial to the improvement of future economic efficiency.To control stagflation, economic efficiency must be improved. At this time, special consideration should be given to the efficiency of this round of stimulating economic growth.

Because the key to stagflation in the future is the increase in costs, including labor costs, land costs, prices of capital goods, and prices of production inputs (coal, electricity, oil, and upstream inputs).Especially here, on the one hand, the prices of capital goods and scarce goods are increasing; on the other hand, the key is whether the efficiency of people's control and use can be improved.The key to stagflation is cost-driven, that is, costs are rising, but output is not suppressing it.Therefore, we must particularly highlight the efficiency of stimulating economic growth. The better the technical content and input-output ratio, the less likely it is to stagflate in the future.At present, the efficiency is really worrying, including some projects that were banned and restricted in the past, and now they are launched one after another because of maintaining growth.This is a recent problem and understandable.This is a means to deal with the crisis in the short term, but it cannot be done in the medium term, otherwise it will form a new round of subprime mortgages and low efficiency.Therefore, the central government has made great changes in the macro-control this time, which is called "maintaining growth, expanding domestic demand, and adjusting structure".Structural adjustment is not on the demand side, but on the supply side, not in the short term but in the medium and long term.Structural change is a function of efficiency improvement, that is, due to the improvement of efficiency, the speed and degree of efficiency improvement are different among departments, regions, and enterprises, so that their competitiveness in the growth of the national economy is different, and then in the national economy. There will be structural changes in the status and influence of the economy, including regional structure, industry structure, and enterprise structure.

So structural changes are the result of improved efficiency.Due to the difference in efficiency improvement, the structure of the national economy has also begun to change, and efficiency improvement is based on technological and institutional innovation, both of which are mid- to long-term matters, unlike stimulating aggregate demand, where measures are effective immediately .Adjusting the structure and improving efficiency from the perspective of aggregate supply requires changes in technology and systems. Therefore, it is necessary to connect the short-term and mid-term tasks, and integrate demand management and supply management, aggregate expansion and structural adjustment, speed improvement and efficiency improvement. Good connection.This is the fundamental way to avoid stagflation in the medium term while effectively maintaining growth and expanding employment.The near-term threat is mainly recession, and the medium-term is mainly stagflation.To control recession is to stimulate aggregate demand, but to control stagflation is not a problem of total volume, but a problem of supply, which requires structural changes and efficiency, so as to reduce costs.It is easy to destroy something, but difficult to build it.It is indeed understandable that we focus on achieving phased tasks and solving major contradictions, but it is easy to destroy something, but it is difficult to build something.

In the context of "crisis" and "recovery", will there be a series of problems such as violating the basic principles of scientific development and delaying reforms in the name of maintaining growth? Liu Wei: These are two questions.Growth issues are just macro goals and policy orientation issues, while social issues are divided into growth issues, development issues, and system issues. The institutional issue is whether the economic crisis will have an impact on China's economic reform.This crisis is the biggest and most profound crisis in the West in more than a century, and it is also the crisis that the West has had the most profound impact on China.Essentially speaking, it poses an extremely profound challenge to the economic system of the Western world, and its impact on China's system reform is also unprecedented.From the point of view of the institutional evolution and policy evolution of the Western economy, there is always a difference in economic philosophy, that is, the debate between the two camps of economic liberalism and state rational interventionism.Beginning with the bourgeois industrial revolution, economic liberalism is classical economics with the background of the British industrial revolution.British classical economists advocated economic liberalism, called "invisible hand", which is the most typical example.The point of view at that time was mainly to overcome two things, one was the feudal and autocratic regime, that is, the bourgeois revolution; the other was in terms of policy, it was actually the anti-French Mercantile School.Before the British Revolution, the Mercantile School advocated intervention, believing that the source of wealth comes from international trade, so the country is the biggest driving force for wealth, and the country must be the leader.At that time, the British Chancellor of the Exchequer proposed a series of financial protection measures and a state-led international trade policy, which was later called mercantilism.

Therefore, the British industrial revolution actually announced the end of the era of the commercial revolution. It advocated economic liberalism and opposed both feudal autocracy and the previous policy of French state intervention.There was a history of more than 100 years before and after, and finally economic liberalism won.It was a victory over both feudalism and mercantilism.This is the first stage.In the second stage, in the middle and late 19th century, with the rise of the second wave of world powers, Germany and the United States gradually emerged.However, their industrialization was later than that of Britain and France, and they could not advocate free competition when they started in the 19th century, because their capital power was weaker than that of Britain and France, so they had to pursue national protection.The German historical school and the American institutional school proposed at that time that the state should intervene, so Germany has always emphasized the will of the state.At this time, they raised doubts about economic liberalism, and the idea of ​​state interventionism began to take shape, but it did not occupy a dominant position.

However, the great crisis from 1929 to 1933 showed that there was a problem with the spontaneous freedom of the market, and the Keynesian Revolution emerged, and state rational interventionism began to appear, replacing the position of British economic liberalism in the history of thought.This is the third stage.In the fourth stage, after decades of World War II, stagflation appeared, Keynesianism gradually failed, and neoliberalism came into being.After the 1970s, throughout the West, new economic liberalism revived, emphasizing property rights issues and free market competition, because they felt that state interventionism also failed sometimes, and the problems were even bigger.This is the fifth time that economic liberalism has encountered new challenges and new doubts.After the crisis, everyone is reviewing that there is a certain problem with free competition. In 1999, the United States abolished the "Glass-Steagall Act" (i.e. the "Banking Act of 1933") and passed the "Financial Services Modernization Act". for functional regulation.

This is a change in the regulatory system, and it has also led to the dilemma of excessive innovation of financial derivatives and an immature regulatory system, which is also a major reason for the financial crisis out of control.In this crisis of the 21st century, we will also usher in a new institutional revolution.Especially in the financial derivatives market, excessive bubbles and excessive transactions have caused various problems in the market, such as information asymmetry, fraud, morality, speculation, constraints and so on.This shows that in the current economy, developed markets have the defects of developed markets.Since this crisis is the biggest crisis in more than a hundred years, it will lead to another major change and rethinking of Western economic theory, but the theoretical change has its lag and will not happen immediately.And the impact of this crisis on China's system may also be unprecedented. Most people are concerned about its impact on China's economic growth. In fact, it has already affected system issues, and the impact is more far-reaching than growth issues.Because China is in a special historical period of reform, that is, the historical process of marketization, the crisis may have a great impact on the direction of China's economic reform in the future.This significance is not trivial.

Instead of increasing savings, social security may have reduced savings.Right now, people are making all kinds of theories about what's wrong with China's economy.I agree with your point of view: the root causes of the domestic economic crisis already existed, and the US financial crisis only made things worse.Based on your observations, where are the problems in the domestic economy? Bai Chong'en: That's right, for China, the financial crisis just made things worse.Issues with external demand are beginning to have an impact, but we also have big problems with internal demand.It is mainly manifested in the bubbles in two asset markets, namely the securities market and the real estate market.At the beginning, the stock market fell from more than 6,000 points to more than 1,600 points. This is obviously a bubble. Even if there is no financial crisis, it will burst, and the same is true for real estate.Why is there this bubble?May have the same roots as the financial crisis.The U.S. money supply is too loose, and we are also loose, and China's exchange rate is not so flexible, we always follow the U.S. monetary policy.This problem is more serious because when China's currency is not flexible enough, many people want to take advantage of the opportunity to appreciate, so a lot of hot money flows in.In the medium and long term, even if these two bubbles do not burst, domestic demand is far from sufficient.

The short-term reason is that the bubbles in the two capital markets have burst, which has suppressed short-term demand; in the long run, the reason for excessive reliance on exports and investment is insufficient consumption. This is an obvious reason.The root of the problem is, why don't ordinary people consume?In the past, ordinary people were cautious about consumption because they did not have social insurance or medical insurance, and they did not dare to consume in order to prevent problems before they happened.However, I don't think this is the main reason.It now appears that the social security payment ratio (rate) is not very reasonable.Therefore, social security may not only fail to increase savings, but may reduce savings.Let's do the math.For a unit that fully participates in social insurance, the pension insurance unit pays 20%, the individual pays 8%, a total of 28%; medical insurance, the unit pays 6%, the individual 2%, and the other "five insurances" add up to about 40%.Then look at the housing provident fund. Of course, different cities are not the same. Taking Beijing as an example, the unit pays 12%, and the individual pays 12%, a total of 24%. The "five insurances and one housing fund" are about 60%.This part of the money comes from consumers themselves, and after being paid into social security, consumers can no longer control it.For example, the housing provident fund can be used as a loan to buy a house, but after buying the house, you have to continue to pay, and this part of the money cannot be used.Therefore, the disposable income of consumers is reduced accordingly.When there is no social security, residents will deliberately save and prepare for pensions and medical care; but with social security, people still have to save because their wages are relatively reduced.

For example, if a 40-year-old middle-aged person already owns a property, the pension insurance will continue to be paid for 20 years later. He does not know how much money he can get back from it at that time, and he does not regard this money as his own when he saves. , he feels that he needs to save enough money for future retirement.We expect endowment insurance to reduce consumers' savings. Now that social security has taken away this part of the money, people still have to save, which may reduce consumption.Therefore, I think that social security payments have to a large extent squeezed out the consumption space of consumers.In fact, the impact of the increase in the personal income tax threshold is very small.For example, if the threshold is increased from 2,000 yuan to 3,000 yuan, it means an increase of 1,000 yuan, while the minimum income tax rate is only 5%, which means that lower-income earners pay 50 yuan less. The impact on consumers can be said to be negligible, and The lower the income, the smaller the benefit.Social security contributions are a hidden labor tax, and the "tax" rate is very high. Compared with it, personal income tax is nothing.But social security is different, more than 60% of the share, here is the bulk.The reason why people don’t pay much attention to it is mainly because a large part of social security is paid by enterprises, and many people think that enterprise payment has nothing to do with them; but from an economic point of view, there is no difference between enterprise payment and individual payment. Both belong to the difference between the labor cost of the enterprise and the income of the laborer.If the enterprise does not have the burden of social security payment, the enterprise will increase the wages of employees.Therefore, this money is paid by the enterprise in name, but it is actually taken out of the pockets of consumers.

What is the root cause of the lack of demand?What is your opinion on the next trend of China's economy? Will the "five pairs" thinking be more effective? Ai Feng: This economic crisis is different from the one in 1929. It is an economic crisis that broke out due to problems with the US economic model in the context of globalization.The American economic model is advanced consumption, and the entire nation is advanced consumption.Americans borrow more money from banks than deposit money in banks.The US government is the richest government in the world, but it is also the government with the most debt.Earn 500 and spend 1,000, can it last?China's problem is insufficient domestic demand, and the root cause of insufficient demand is the dual structure of urban and rural areas.The purchasing power of farmers in our country is too low, and urban-rural integration should be used to change the dual structure of urban and rural areas.This problem has existed for many years, and this financial crisis forces us to change this situation as soon as possible. In this sense, the financial crisis is also a good thing.Insufficient demand is mainly due to insufficient consumption in rural areas. In 1998, I proposed to the central government a proposal to speed up urbanization, which was later included in the document of the Third Plenary Session of the 15th Central Committee, specifically pointing out that rural areas should not only solve the problem of agriculture, but also solve the problem of stimulating the national economy.Because China's main problem is to become a country that focuses on domestic demand, rather than a country that relies too much on foreign trade.The most urgent task for Chinese farmers is to increase cash income, so urbanization must be promoted.In the past 20 years, China's urbanization model has also been problematic. It is almost equivalent to the surplus labor force going out to work. In fact, most of them are still farmers when they look back.Ai Feng: That is not called urbanization.The strict meaning of urbanization is that farmers become urban residents, their families must live in cities, and their production and consumption patterns must be urbanized.The only way to increase farmers' income is to reduce them.In the long run, it is necessary to adopt a "one-to-two" policy, integration replaces dualism, and dualism must be changed.The concept of urban-rural integration has been put forward a long time ago, but the policies in these years have been intermittent and not connected, and there is no awareness of integration in all aspects. For example, the two slogans we proposed to build a new socialist countryside and county economy are not connected.In fact, in building a new socialist countryside, the focus should be on developing the county economy. Building villages and allocating funds for road repairs will not play a big role.We know that the county seat is the junction of urban and rural areas. It has industry, commerce and service industries, and can also directly contact the countryside.If the county economy develops, it can be used as a breakthrough to solve the problem of urban-rural integration relatively quickly.It is impossible for a big city like Beijing to solve the problem of urban-rural integration.The low income of farmers is due to low labor productivity.The yield per mu of our good wheat can reach 2,000 catties, which is already very high, but why are farmers still poor?Because of the lack of land.The yield of Australian wheat is 150 catties per mu, why is it still exported?Because its per capita arable land area reaches 2,000 mu and its labor productivity is high.It means that if the number of farmers is not reduced, the production efficiency will not be improved, and there is not much demand for agricultural employment, so it must be transferred out.After urbanization, the scale will be formed, and then there will be a large number of county-level industrialization and modern commerce. Without agglomeration, there can be no modern commerce, and there is no tertiary industry in the countryside.Now the large village system is also the idea of ​​centralization and scale. In terms of economic model, in the past few years, China's economy has been mainly driven by investment, especially government investment.Driven by investment, a lot of manufacturing energy (capacity) will be generated.After the production capacity has increased so much, it is necessary to rely on the export market to drive the continuous rise of the entire Chinese production chain, and provide sales channels for manufacturing factories in this way.But there is a problem. How can the past economic growth model rely so heavily on exports and investment? Chen Zhiwu: In the past decade or so, many people, including the National Development and Reform Commission, have called for it. To change the status quo of economic growth over-reliance on investment and over-reliance on exports, adjustments must be made.Of course, one of the key reasons why the economy has been developed through continuous investment, infrastructure construction, and production capacity expansion in the past 30 years, and economic growth has been continuously achieved, is that the expansion of the market brought about by globalization has made Chinese products Sell ​​to all over the world.But now, under the background of the global financial crisis, we have discovered that this export growth is not unlimited and cannot continue indefinitely. Today, it is becoming more and more difficult to increase the share of overseas exports. To sum up, in order to achieve long-term sustainable growth, China's economic growth model must be changed. Specifically, the following two reforms must be carried out. The first is, of course, the reform of democratic constitutionalism, which is the necessary condition for the most direct restriction of taxation power, restriction of the unlimited expansion of government control power, and more transparent supervision of the fiscal budget process. The second is to inject the remaining state-owned assets, including the equity of state-owned enterprises, into 32 national equity funds.One is the national national equity fund, which injects the property rights of the remaining 138 state-owned enterprises and state-owned enterprises affiliated to the central ministries and commissions.Then, the shares of this National Equity Fund are distributed equally among the 1.3 billion citizens, so that the "ownership by the whole people" is truly realized, that is, the "ownership" of the whole people that has not been in place in the original "ownership by the whole people" is given to the specific "owners" apply to every citizen.Then, it can be traded just like the current public equity funds.In addition, in 31 provinces and cities, national rights and interests funds of each province were established, and the assets of state-owned enterprises in each province were injected into it. The national rights and interests fund of each province was basically based on the principle of more points for local citizens and less points for citizens from other provinces. For example, according to 6 :4 or 7:3, the provincial national rights funds are distributed to all citizens.It would be better to allow free trade in the shares of the National Equity Fund.I know, there's been talk about this program for over a year, with a lot of mixed reactions.Some people say that these national equity funds are difficult to deal with because there are 1.3 billion people.In fact, I think that at the operational level, today’s Chinese securities market and fund industry have gone a long way, and there are already about 150 million fund accounts.Therefore, since these banks and fund management companies can handle 150 million fund accounts and 1.3 billion national equity fund accounts, the scale and difficulty should be similar. When the country is rich, the next key issue is the wealth of the common people.It should be said that the high-level central government has attached great importance to the issue of domestic demand. From strategy to policy, they have spared no effort to put the start of domestic demand in an important position. Wei Jie: The main way to start domestic demand is nothing more than investment and consumption.The effect of investment is relatively fast, and the effect of consumption is relatively slow. The investment will be effective in about 6 to 9 months, that is, it will be effective in June 2009.Effectiveness means that the market has begun to pick up. For example, steel and cement may be the first to pick up in June, and other industries will pick up later, and the effect will begin to release.Consumption is relatively slow, the fastest is 9 months, and the slowest is more than one year.Therefore, the first thing we start is actually investment.I divide investment into three types: one is people’s livelihood investment, which is the investment in public goods you mentioned, such as medical and health care, culture and education, social security, and infrastructure, and the main body is the government; the second is production investment, which is investment in production, and the main body is The third is asset investment, which is investment in stocks, real estate, etc., and the main body of investment is the public.Among these three types of investment, the government can firstly invest in people's livelihood, because the government is the main body of investment.The problem is that investment in people's livelihood alone is not enough, because investment in people's livelihood only accounts for about 30% of the total social investment, and it still cannot stimulate economic growth.Moreover, although investment in people's livelihood is meaningful to economic growth of 8%, it is of little significance to the relief of enterprises and the increase in consumption. All three types of investment must be started. However, it should not be enough to rely on investment alone. In the end, it must be supported by consumption.If consumption is not supported, demand cannot be maintained.Consumption can be divided into three types: one is income-based consumption, which involves earning money for consumption.The key to income-based consumption is income. When income increases, consumption will rise; if income does not increase, consumption will slump.Raising the income of residents is the fundamental problem.The reason why our long-term domestic demand has been weak and we have been relying on exports lies in the distribution of wealth, that is, the country gets too much and the residents get too little.Therefore, tax cuts, tax exemptions, and individual tax thresholds should be raised substantially.If the distribution relationship between the state and residents is not adjusted, consumption cannot be increased and domestic demand stimulated.The second is credit-based consumption, that is, borrowing money for consumption.Like buying a house with a mortgage.Because real estate consumption mainly relies on credit-based consumption, if it cannot be promoted, it will not be able to stimulate domestic demand.The third is expected consumption.People's expectations determine consumption: if expectations are good, consumption will be high; if expectations are not good, consumption will be low.This factor is also important.Expected consumption involves the improvement of the social security system. If the social security is good and people's psychological expectations are good, residents will dare to consume; otherwise, if the expectations are pessimistic, they will refuse to consume.For example, the interest rate is being cut now, and the state has drastically lowered the deposit interest rate, and the common people are very nervous.The state can lower the loan interest rate, but it cannot lower the deposit interest rate. It can subsidize the interest rate, because the deposit interest rate is the self-protection of the common people, and lowering the deposit interest rate actually takes away the money that the common people deserve. After 30 years of reform and opening up, the country has become rich, and the next key issue is the wealth of the common people.If the common people are not rich, there will be no consumption, if there is no consumption, there will be no domestic demand, and if there is no domestic demand, they will rely on exports, which will not solve the fundamental problem. In the past 30 years, the wealth created by the country is huge, but the wealth enjoyed by the common people is a very small part, and the proportion is seriously out of balance.The core issue of economic growth of 8% is for employment, but this time it may not be so. After the central government launched the "4 trillion" rescue plan, local governments have also cooperated with the 18 trillion tracking project.Considering the great inertia of the economy, will the recent introduction of so many macro-control policies lead to overheating of the economy in the second half of 2009, and will there be worries about a new round of inflation? Wei Jie: Regarding this bailout policy, I have two concerns. One is to control local government investment in the past to prevent overheating; now it is fully liberalized and investment is encouraged, so many image projects that have no benefit may appear.Some local governments are not motivated to increase the income of residents, and are not motivated to solve social security issues, but are keen on infrastructure, because hardware construction contains power-money transactions.There will be problems when it is cold and hot. It is obvious that the GDP has increased, but in the end it leaves a lot of public goods that are not beneficial. On the other hand, due to the strong monetary policy launched by the country this time, the money supply will increase by about 17% in 2009. Issuing more currency is tantamount to depreciation, which is equivalent to imposing currency taxes on everyone, and the poor are the worst. , so I am worried that inflation will appear in China in 2012. After the outbreak of the Asian financial crisis in 1997, the goal of China's macroeconomic policy was to "guarantee 8", so a growth rate of 8% was acquiesced by the industry as the bottom line of our economic growth.In fact, for developed countries, an economic growth of one to two percentage points is already very hot, so why does China emphasize 8%, and is it not acceptable if it is less than 8%? Wei Jie: The reason why we say that maintaining growth is "guaranteeing 8" is because there is a statistic in our country that only an 8% economic growth can create 10 million new jobs. The core issue is employment.But this time it may not be, because the 8% growth rate is based on the environment where a large number of small and medium-sized enterprises survive and a large number of private enterprises, export enterprises, and labor-intensive enterprises operate.However, this time relying on infrastructure to drive employment may not be able to solve employment, and it will have little effect on increasing employment.Therefore, I strongly disapprove of the 8% formulation, and it should be "safeguarding employment, boosting domestic demand, and adjusting structure."Because maintaining growth does not necessarily guarantee employment, it is necessary to explicitly propose ensuring employment. Guaranteeing employment means protecting enterprises. 95% of employment is provided by enterprises. If enterprises have closed down, how can we guarantee employment?After the financial crisis in Southeast Asia, we relied on real estate and exports to drive an 8% growth rate, because real estate is a labor-intensive industry, and exports are a large number of labor-intensive small and medium-sized enterprises, which can accommodate 10 million employed people.But this time is different, because real estate and export companies are in crisis, so the core issue is to clearly ensure employment.We have noticed that many experts on the Standing Committee of the National People's Congress have recently put forward the idea of ​​abandoning the simple pursuit of GDP, and called for persisting in promoting industrial restructuring, eliminating outdated production capacity, and not giving up the opportunity of economic transformation because of temporary difficulties. Now we take structural adjustment as one of the policies this time. Structural adjustment should be a market behavior, so why mention it?Because we are emphasizing the government, in order to stimulate the economy as soon as possible, we must emphasize the role of the government in structure.The top ten industrial revitalization plans proposed recently are all government plans, and they do not care about benefits. The government may have invested heavily, but enterprises have not felt it.In fact, the economic growth model is bound to change under the action of the market.Under the current circumstances, the government only needs to formulate public system policies. It should not rush to the front line too much and regard itself as the main body of investment and technological innovation, otherwise problems will easily arise.Our current innovation has become an ideology rather than a corporate behavior. The result is that it is not conducive to the overall economic adjustment, and in the end it may become worse as the adjustment is made.How to survive the crisis now?We have two opposing options: one is to speed up reform, and the other is to restore the traditional system.Some people feel that we now have a tendency to restore the traditional system, which is a bit of a shadow of a planned economy. Every day when the TV is turned on, the government is bailing out the market, and it is rare to see the situation of market players. China's primary, secondary and tertiary industry outlook.What do you think of China's industrial changes in the past 60 years? Huang Guitian: I think there have been two major changes.The first change is that after 60 years of industrialization in the manufacturing industry, our manufacturing industry has entered the stage of heavy chemical processing. In the 1960s, staged changes took place.With regard to the rising proportion of the heavy chemical processing industry, everyone can know from the relevant industrial data released by the National Bureau of Statistics. Thanks to this change, the heavy chemical processing industry has accounted for more than 60% of the industrial structure since the new century, and it has continued until there is Data for the end of 2008.I speak only of my own judgment.I think this is a proud change in China's economic development over the past few hundred years or 60 years.As a big country, the periodic changes in industrial structure in the process of industrialization are compatible with the regularity in the development of advanced developed countries. This is a remarkable achievement.We started the first five-year plan in 1953 and chose the heavy industry development strategy.The era of planned economy has a positive meaning, and it has played a very important role in establishing and improving the national economic system, especially China's planning system.But this also brings a series of negative effects, which can be seen in a large number of published literature. After the reform and opening up, we gave up the artificially chosen development strategy, and the economic structure underwent major adjustments.From the late 1990s to the present, the heavy chemical industry has been on the rise. This is an insurmountable stage in the development of a big country. This is a welcome change.Another change is the secondary industry, manufacturing.The degree of substitution of production factors in the manufacturing industry has changed. We generally classify industries according to different standards and different angles.One of the classifications is to divide the industry into the so-called labor force type, capital force type, and technical force type according to the proportion of relative factors used by the industry.Has there been a change in the relative intensity of production factors in China's manufacturing industry? Huang Guitian: It has not been seen in official research or private research institutions so far.Recently, I led my research team to do a research, using clustering method and software designed by ourselves, taking 30 large industries and manufacturing industries in China from 1993 to 2007, of which 28 industries were used as samples, discussing 1993 During the time period up to 2007, the results obtained from the changes in the intensity of production factors in China's 28 major manufacturing industries show that the results of production factors have changed. In 1998, the 28 major categories were all labor-intensive, and labor accounted for a large proportion of all production factors.This is generally agreed that after the reform and opening up, China's manufacturing industry has participated in the process of globalization, and the abundant and cheap labor force has gained its relative position in the world today.According to the results of our research, since 1998, these 28 categories of manufacturing industries have gradually shifted to non-labor industries. By the end of 2007, 19 of the 28 manufacturing industries had turned into non-labour-intensive industries, and only 9 still retained the characteristics of labor-intensive industries.And this shift is changing.We all know that in the manufacturing industry, if the proportion of capital, technology, and other factors is increasing, while the relative proportion of labor is decreasing, it means that the format of an industry is changing. What do you think of this change?On the one hand, it shows that China's industries, especially the manufacturing industry, are upgrading.From the original labor force type to the non-labor force type, the capital element is replacing the labor element, which is an important aspect of the change in the industrial chain.It is the 30 years of reform and opening up to the 30 years of the planned economy era, and the 60 years from 1949 to 2009. China's industry is changing.This change is due to the rising proportion of the heavy chemical processing industry.Another change is that the proportion of non-labor-based manufacturing is also increasing, which is a remarkable achievement. In such a change, what kind of negative impact will it have on China's economic development in the future? Huang Guitian: By 2049, it will be the 100th anniversary of the founding of New China.Over the past 60 years, the foundation has been driven by a great revival, but the problems and tasks to be faced in the next 40 years are still very heavy.In the next 40 years, we will basically realize marketization.Roughly by 2020, a market economy system with Chinese characteristics will be established, and by 2030, my country will basically enter a post-industrial society. By the middle of the 21st century in 2049, it will basically reach the level of catching up with developed countries proposed by Deng Xiaoping in the early 1980s, and enter the ranks of developed countries.In order to realize the century-old dream, China's industry is undergoing positive changes, which may bring some negative effects.In the secondary industry, the proportion of production factors and labor force required by the manufacturing industry is declining, while the proportion of capital and technology is rising. This may mean that the demand for labor force in the manufacturing industry is declining.With the advancement of technology, the process of global economic integration is further accelerated, competition is further strengthened, and the substitution of capital and technology for labor may be accelerated.This may be a very important structural issue to be considered in China's economic and social development in the process of realizing its century-old dream in the next 40 years or so.How to solve it?Everyone talked about the need to vigorously develop the tertiary industry. The service industry is divided into different types, and now it may become a non-laboratory type. For example, the banking industry used to be operated manually, and factors such as modern technology are replacing the original manual operation.Alternative changes are also possible in the banking industry.For example, according to our concept, the textile industry is labor-intensive, and the food processing industry has become non-labor-intensive. Do you doubt that the textile industry will also become non-labor-intensive?The textile industry above designated size has basically realized semi-automation.The same is true of the food processing industry, such as dairy products, a considerable part of which has been fully automated.This is because the intensification of international economic competition has led to substantial changes in our industry.A considerable part of the tertiary industry is also undergoing changes.We generally say that China's tertiary industry is labor-intensive. In fact, a considerable part of the tertiary industry has also become non-labour-intensive.To solve China's employment problem, we must vigorously develop labor-intensive service industries, and the most important thing is to promote China's urbanization level.So far, China's urbanization level is less than 50%.According to the Eleventh Five-Year Plan, China's urbanization target by the end of 2010 is 47%. Only by greatly improving the level of urbanization can the labor-intensive service industry be supported.中国到目前为止，城镇化成本太高，如果不大幅度降低中国城镇化成本和体制变迁，可以用城镇化进程大力发展劳动密集型服务业缓解就业的压力。