Chapter 11 Chapter 10 "National Advancement and Private Retreat": Is it a century-old plan or an urgent solution

How did the country advance and the people retreat?Some people pointed out that although the country released the "36 Non-public Economy Articles" in 2005, the overall trend of China's economy in recent years has remained unchanged.Then, will the incidents of Tonghua Iron and Steel Group and Lingang Group affect the pace and progress of state-owned enterprise reform, and further strengthen the trend of the state advancing and the private retreating? Sheng Hong: The background of state advancement and private retreat is as follows: After mergers and acquisitions and reorganizations in the past few years, the remaining state-owned enterprises now occupy some unique fields, including scarce strategic resources, such as oil, natural gas, coal, etc.; Some are monopoly industries, such as telecommunications, electric power, civil aviation, railways, and finance.These two types of industries, due to their strategic specificity, the value of resources will rise with the scarcity of resources. The price of oil has increased many times from 2000 to now because of the increase in scarcity.This price increase, the rent contained in it, would have been obtained by resource owners, at least proportionally.In China, the resource owner is the state.But in reality, state-owned enterprises enjoy a lot of special treatment because they are state-owned. They do not pay rent, but only pay a very low fixed fee, so the part of the increase in resource prices becomes profit.The income of the management and employees of state-owned enterprises is also linked to the profit. In this way, even though the efficiency of many enterprises is very low, they appear to be very competitive because of the rent.

If the rent is paid, there may not be so much profit, and it may even be a loss.There are also some monopoly industries that can rely on monopoly high prices in sales and can make more money. This is not determined by their capabilities, but by their monopoly status.In addition, they do not pay land rent, and they also have preferential loans. Therefore, compared with private enterprises, they have various advantages.What is the essential problem of such a situation?This is a constitutional issue, not an economic issue in general, and an error produced by fundamental principles.In other words, where are the boundaries of the government, including the boundaries of state-owned enterprises?Under what circumstances should we establish state-owned enterprises?Should SOEs enter competitive industries or general commerce?Do SOEs exist for public purposes or for the benefit of SOE management and employees?Is it fair for the management of state-owned enterprises to occupy public resources but enjoy the benefits it brings?What method should be used to supervise the management of state-owned enterprises?In the case that the management of state-owned enterprises has already usurped public resources, what means can we use to return these public resources to the public authority and ultimately to the society?Finally, according to the above principles, should we establish a corresponding system so that the administrative department and its derivative "state-owned enterprises" cannot "enter" casually?This is our ultimate goal.

These are constitutional concepts, not general concepts.In my opinion, state-owned enterprises are special enterprises, while private enterprises are ordinary enterprises.It means that private enterprises can be established without explaining special reasons; state-owned enterprises are different, because there is a boundary between the government and enterprises in society. There are some things that the government can do but enterprises cannot do, and some enterprises can do better but the government does not allow them. If you do it, you will make mistakes.Also, between the two, it is not suitable for the government to do it, nor is it suitable for private enterprises, which requires state-owned enterprises to do it.Therefore, when establishing a state-owned enterprise, it cannot be established arbitrarily. It is necessary to explain the reasons for the establishment. After the reasons are explained, the establishment can only be established with the consent of the legislature.The reality in China is: first, no special explanation is needed; second, it does not need to go through the legislature, and it is entirely the will of the administrative department.Moreover, these state-owned enterprises can decide to establish secondary enterprises and subsidiaries on their own, which are all problems.In essence, this involves the constitutional principles of the establishment of state-owned enterprises.Pushing forward further involves the constitutional positioning of the government.The so-called large expansion of state-owned enterprises, the government said that the state advances and the private retreat is for public purposes, so the question now is: Do we need to establish state-owned enterprises to achieve our public goals?For example, it is obviously wrong to say, "In order to enrich the country, strengthen the army and increase fiscal revenue, we need to establish state-owned enterprises."The resources to enrich the country and strengthen the army can be achieved through taxation.The taxation of the private economy may be more profitable and more stable than that of state-owned enterprises.

So, this logic is wrong.As for solving security-related issues, it is necessary to strengthen the government's security supervision, rather than relying on the state-owned or private nature of enterprises to solve them.State-owned enterprises have their own positive factors, as if they can be directly supervised by the government; but they have their own problems, and state-owned enterprises will also ignore safety measures for economic interests, which is why state-owned coal mines have repeatedly experienced safety problems in recent years.In addition, environmental protection is exactly what state-owned enterprises cannot do.The state-owned enterprises are too powerful, and the damage caused by its pollution to the surrounding villages is beyond the local people's ability to complain. There is no system to check and balance, and there is no place to file a lawsuit if you want to.It is precisely the strength of state-owned enterprises that has caused serious damage to the environment in places like Shanxi.In this way, the role of constitutionalism is very important. The government cannot intervene in the market casually, otherwise it will produce negative results and make the market unable to compete fairly.Because when there are both state-owned enterprises and private enterprises, and the state-owned enterprises are the so-called "eldest sons of the republic", how can the government treat state-owned enterprises and private enterprises fairly at this time?What's more, it helps state-owned enterprises merge private enterprises.Since state-owned enterprises are government power plus market rules, their income is more of the monopoly power obtained by government power. This result is not beneficial to society at all, and will only lead to a reduction in social efficiency.

Behind the monopoly = official advance and private retreat?Behind the interests of monopoly enterprises are often administrative forces and departmental interests. In the process of decision-making or performance of functions, some departments start from the interests of their own departments too much, emphasize, maintain and seek the interests of their own departments, which affects the strategic, overall and forward-looking nature of decision-making, and damages social justice and public interests. Increased national economic and political risks. Sheng Hong: Yes, this "departmental interest" is probably the crux of the problem.The power of the executive branch is not restrained, and state-owned enterprises are a derivative of the executive branch.In this sense, "the state advances and the people retreat" is not accurate, it should be called "officials advance and the people retreat". The word "country" can cause misunderstanding.Putting the state-owned enterprises and the administrative department together, the administrative department is also divided into different departments. If the administrative power is not restricted, it is actually reflected in the fact that the departmental power is not restricted.It means that administration as a whole still has many overall, long-term, and rational considerations, and it will not go to this point.Now the specific departmental power is not restricted, which is more powerful than the abstract administrative power, because the department is only a single perspective.Departmental interests should not be higher than the overall interests of the government and the overall interests of society.If our administrative organs cannot control specific departments, and departmental powers pursue the maximization of departmental interests in the name of national interests, it will bury hidden dangers for social justice and stability.In the "Draft for Comments on the Land Administration Law Amendment" (hereinafter referred to as the "Draft Amendment") that we saw on the Internet, there are as many as 116 amendments (including changes, additions, and deletions).

For a law that originally had only 86 articles, the revision rate was as high as 135%, which is indescribable as "reborn" or "turned upside down".In CCTV's "Focus Interview" program, among the more than 74,000 mass incidents recorded by telephone in 2005, 15,312 were related to land.There are nearly 80,000 group incidents every year, 64% of which are caused by land expropriation, which means that hundreds of group conflicts occur in our society every day.Farmers' interests have been robbed, and we now have tens of millions of farmers who lost their land. They have not received reasonable compensation, so they are resentful.In this context, a "departmental bill" that further infringes on the interests of farmers will be introduced. How can you explain it?To say that the law must keep pace with the times means not only to make adjustments with the evolution of the times, but also to correct the mistakes in the original law based on the advantages and disadvantages of past practice, so as to make the law more just and the society more can function effectively.This first requires sorting out important issues in related fields since the last law revision.These major land issues directly or indirectly reflect the interaction between my country's land practice and the existing legal framework.If we want to amend the law, the first thing we need to do is to further investigate, sort out and judge these issues, and confirm that these facts do exist.Of course, the causal relationship between the current land issues and the current laws must be thoroughly analyzed and determined.

If the judgment of the legal cause of the problem is wrong, or even completely reversed, it will also affect the revision of the law.For example, with regard to the problem of urban sprawl encroaching on cultivated land, some believe that there is too little government regulation, while others believe that there is too much regulation and the government has too much power, which allows the government to expropriate land at a low price by coercive force.According to the latter view, when the law is amended, it is necessary to restrict the regulatory power of government departments, which may prevent the further deterioration of the problem.However, looking back at this "Draft Amendment", it seems that there are no major issues surrounding land, or that there is no need to summarize and refine the pros and cons since the implementation of the "Land Management Law"; and the revision direction of the "Draft Amendment", including Further increasing the power of land management departments and land acquisition government departments and further depriving rural collectives of land power is unreasonable and arbitrary.China's written political structure still has many advantages, including the supervision of the National People's Congress and a relatively complete judicial system, so laws and regulations must also be decided through the National People's Congress.In fact, supervision is not a bad thing, but to remind and make up for shortcomings and prevent mistakes.However, supervision is still problematic.Since there is such a written political structure, we have to count on the NPC to play a role.Our obligations and responsibilities can only be suggestions and appeals. We should have this kind of consensus: Singing against each other is not about becoming enemies, but for the good of the entire country and the entire ruling party.It is good to prevent mistakes being made and no one to correct them.

Sometimes, the so-called constitutional principles are not necessarily through democratic means, let alone through violent means, and sometimes through the understanding of those in power, relying on many elite figures.Just like in the United States, when Washington became president, people thought that he would at least be a lifelong president, or even a king, but he stepped down when he expired, and many people were still very surprised.This question contains a cultural tradition.It should be said that China's new cultural tradition has not yet formed, and constitutionalism has not yet become the mainstream.I believe that many people do not want to do bad things, but do not have constitutionalism.They believe that the government can do anything, that it is possible to violate basic principles for a technical reason, and that "small principles" can govern "big principles". This is because constitutionalism has not formed a mainstream culture.The most important thing right now is that Chinese intellectuals have not yet reached a consensus, nor have they formed a mainstream culture, nor have they reached a constitutional consensus, nor have they formed a self-evident basic principle.What used to be preached in middle school textbooks was class struggle, but now it has become constitutional democracy, which is an improvement of society.In addition, we must also consider that now, the high-level officials must have doubts. For example, they have not expressed their position on the advancement of the country and the retreat of the people. It is a good thing to have doubts.I think Chinese intellectual elites should look beyond their own interests, especially researchers in institutions outside the system.Whether your words have influence does not depend on how high your power and status are, but whether what you say is correct.We will not hype, just try to insist on being right, and try to hope that relevant parties can pay attention to it, recognize the problem, and solve the problem.

Who is the chief culprit of "the country advances and the people retreat"?The current serious shortage of domestic demand in China has become the price of so many years of rapid economic growth.You once mentioned the issue of rigid tax increase. Is this also one of the reasons for the serious shortage of domestic demand? Chen Zhiwu: Now it seems that as long as the growth rate of government tax revenue continues to grow out of control, and the wealth of the society controlled by the state continues to expand, there will not be many opportunities for China's private consumption to grow.We know that the loss of taxation power will inevitably mean that more and more national income will be transferred to the government. In 1952, China's private consumption accounted for 69% of GDP at that time, and it dropped to 45% in 1978. Until recently, private consumption was only equivalent to 35% of GDP.In my opinion, in the past 60 years, the proportion of private income in national income has been declining. In contrast, the proportion of government income in GDP has generally risen. In 1952, government consumption expenditure was equivalent to 16% of GDP at that time, but up to now, it has risen to 30% of GDP, that is, the proportion of private consumption in GDP has been reduced by half in the past 60 years, while government expenditure accounted for 30% of GDP The specific gravity has basically doubled.

How did these two different curves come about?The support behind it mainly comes from: first, the right to taxation is basically not subject to too many restrictions; second, through the arrangement of the state-owned system, the state monopolizes most of the social assets, rather than the common people. Family to share.The resulting outcome will inevitably make the growth of private consumption extremely difficult.The only way out or choice to break the dependence on the past economic model is to improve the system, especially to control the increase of tax revenue.Especially in 2009, it was reported that the national tax revenue in June increased by nearly 20%; compared with the same period last year, the fiscal tax revenue in July still increased by more than 10%.It would be unforgivable if tax revenues continued to grow at this rate in the wake of the financial crisis.As far as I know, one of the reasons is that some local taxation bureaus and related departments put pressure on local companies to pay next year's taxes in advance. This is an extremely bad and destructive move.In order to pursue the tax growth rate, at the expense of killing chickens and eggs, requiring private enterprises to pay some of the hard-earned money to the public in advance, it is tantamount to driving private enterprises to a dead end.In the long run, it will be a fundamental blow to the vitality of the Chinese economy and the increase in employment opportunities for ordinary people.

Why is the income growth rate of Chinese people always slower than the growth rate of GDP?The National Bureau of Statistics recently announced that the per capita disposable income of urban residents in the first half of the year increased by 9.8% year-on-year. Donated", "represented", etc., is a ridiculous phenomenon).Why is the economic growth experienced by ordinary people not as high as the official GDP growth rate?As the title of my other book reveals: Why are Chinese people hardworking and not rich?The first important reason is that the government has too many administrative controls and the system cost is too high.The second is that there are too many national finances and taxes. Especially in the past ten years, the government has allocated more and more national income from the entire national income pie.Another important reason is that the appreciation of state-owned assets has been transferred to the hands of the state, but not into the pockets of ordinary people.I think the 9.8% data is inconsistent with other data.As I said just now, if there is no fundamental increase in the supply of labor in the job market, the price of labor cannot rise rapidly under the premise that the demand is far greater than the supply.It can be seen from these big macro data that disposable income increased by 9.8%, but the credibility is not too high. How to reduce the phenomenon of "state advances and private retreat"?On the issue of funding sources for promoting new consumption, you once suggested that "the scope of dividends of state-owned enterprises should be further expanded, and the proportion of government shareholding in state-owned enterprises should be reduced in a planned way, so as to increase the state's financial resources to vigorously support residents' consumption."Based on China's national conditions, can the expansion of the scope of state-owned enterprise dividends break through the obstacles? Xia Bin: There are two measures.The first measure is to further expand the scope of state-owned enterprises' dividends and reduce the government's shareholding ratio in state-owned enterprises in a planned way, so as to increase the country's financial resources and vigorously support residents' consumption.At present, whether it is to improve the income distribution structure of residents, or to expand the consumption level of residents in domestic demand; whether it is to further improve the social security level of the whole society, or to further promote the equalization of basic public services, all are directly subject to the state's fiscal revenue in that year.Although there was a deficit of about 3% in the fiscal arrangement in 2009, I believe that at this time, not only the fiscal revenue account of the Ministry of Finance of the year must be calculated, but also the national account, the national revenue account, and the national balance sheet account.Because compared with the financial resources in the hands of our government, the governments of the United States and Japan, which are heavily indebted, cannot be compared at all.The Chinese government has more than 10 trillion yuan in high-quality assets of central and local state-owned enterprises and financial enterprises.We have spare capacity and space to further enhance the national financial resources to increase residents' consumption. First, in addition to continuing to conscientiously implement the state-owned capital dividend system for central enterprises and enrich the central budget, local state-owned enterprises at all levels can also implement the state-owned capital dividend system to enrich local financial resources or reduce transfer expenditures from the central government.Moreover, the proportion of dividends can be implemented dynamically and increased as appropriate.Second, on the basis of allocating part of the equity of listed companies currently held by state-owned enterprises to social security funds, the state-owned holding parent company of listed companies and all state-owned enterprises that are not involved in the listing can be further adjusted according to the national strategic intention, except for the need to continue to maintain absolute or relative For those outside the shareholding ratio, the government's shareholding ratio can be gradually reduced in a planned and selective manner, and sold to the market.China is a country with a high savings rate.After the government reduces its holdings, it does not simply eat up or divide up all of them, but welcomes private capital investment and investment, and the investment rate of the whole society does not decrease.The funds obtained by the government after reducing part of its equity holdings should be included in the fiscal budget and used by the state to increase residents' consumption and public finances.This is the first measure.The second measure is to accelerate the organization and expansion of private capital into the investment field, and increase the proportion of private capital in investment. In the future, for new government investment projects, including the "4 trillion" projects arranged in this round of central and local economic stimulus, as long as they are profitable projects, in addition to implementing the national strategic intention, governments at all levels It should be resolute to "not compete with the people for profit".Encourage and relax policies to attract private funds to invest in industry, municipal facilities, finance, medical care and education as much as possible.After the government frees up funds, it is also a source of funds to enrich residents' consumption and public finances.In line with this, the financial investment and financing system must keep up.In terms of attracting private funds, the society has been discussing for a long time.The key now is to focus on implementation and speed up institutional reforms in related fields.It should be done, where there is resistance, we must resolutely reform the system in that area.If the central government is determined to reform but fails to come up with reform plans for relevant departments, the central government can entrust market institutions to research and come up with plans at the same time, putting pressure on relevant departments to improve governance efficiency.In the current situation of expanding investment, the significance of encouraging private investment to follow up is not only the short-term significance of stimulating the economy, but more importantly, how to see its medium and long-term significance to the sustainable growth of China's economy. First of all, by reducing some of the shares held by the government and reducing investment, the finances at all levels can save a large amount of investment or can continue to increase a large amount of income, which can be used to expand consumption, increase the consumption rate of residents, and enhance public financial strength, which will help Address structural issues in sustainable economic growth.Second, China is a country with a high savings rate.Replacing state-owned enterprise investment with some private investment only changes the nature of investors, and the investment rate of the whole society remains unchanged. Therefore, it will neither affect the current need to stimulate investment nor affect the reasonable investment demand in future economic growth.Furthermore, if some private investment is not used to replace state-owned enterprise investment, a cycle of state-owned enterprise investment → making money → reinvestment will easily occur, and then the phenomenon of "state advances and private retreat" will aggravate during the reform, and the current real estate market will hype "land kings" Most of them are state-owned enterprises.If part of private private investment is used to replace state-owned enterprise investment, and since private investment is more likely to be invested through innovative financial instruments that gather a large number of residents’ savings, the higher the rate of return on investment, the more conducive it is to solve the problem of income distribution structure and stimulate residents’ consumption. In particular, if the investment threshold and restrictions on municipal facilities, leisure and health care, cultural entertainment, hospital education and other service industries are further relaxed, the service consumption level of Chinese residents will be further improved, which will help form a virtuous circle of investment and consumption in our country.Numerous cases have shown that private investment has stronger property rights binding force, pays more attention to efficiency than state-owned investment, helps to prevent low efficiency and repeated investment, and is also conducive to preventing all kinds of corruption that cannot be prevented in major project investment (of course, it does not rule out private investment. There will be bribery and corruption in order to compete for the project).Encouraging private investment in the real economy such as industry and municipal facilities is to encourage ordinary people to obtain more property income in the sense of capital income in China's sustained high economic growth, rather than to encourage ordinary people to obtain more virtual asset markets such as the real estate market. property income.At this time, if the government guides it with practical policy measures, it will help overcome the bubble phenomenon in China's economic growth.Some foreign cases have shown that in countries where the real estate market is mainly used as a consumer market rather than an asset market, such as Germany and Singapore, their economic growth is not prone to asset bubbles.Taking the above two measures is also to allow the people to fully enjoy the fruitful results of reform and opening up.China has become the third largest economy in the world. Today, it is also possible to gradually explore the path of common prosperity after making some people rich first, so that the whole society can develop more harmoniously and stably.