Chapter 15 Chapter 14 Reform and Innovation: Reform is a protracted war, and it is not time to sleep

What is the biggest achievement of reform and opening up?Regarding the 30 years of China's reform and opening up, some scholars pointed out that opening to the outside world is the biggest achievement of these 30 years.Access to productive resources through administrative means is maintained because of openness. Mao Yushi: Indeed, if more productive resources of a country are in the hands of the government, then the government will have more money at its disposal, and the people will have less money in their pockets. This is a process of ebb and flow .If it is not open, the things produced may not be sold.Opening up has maintained our export-oriented economy, so reform and opening up should be viewed separately.At the same time, we must also see that the most important force that cannot be ignored in the past 30 years of reform and opening up is the private economy.The wealth of the private economy is not in the hands of the state, it is the market that has weakened the power of the government.As far as opening to the outside world is concerned, the most important significance is the realization of exchanges between the East and the West, and China can learn from the advanced things of the West. Without this, China's reforms cannot be successful.The main result of opening up is not simply to safeguard the interests of the ruling class, but more to promote China's comprehensive learning from the West in the fields of technology, system, and culture.Our constitution, people's congress, courts, lawyers, universities, and various systems are all from the West, not Empress Dowager Cixi.

Of course, there are also many people who think that whether our learning is more focused on form, in fact, we are also learning spiritually, and the recent rights defense actions are the result of learning from the West.Those who are really learning from the West are mainly some folks; as monopoly interest groups, although they resist Western ideas on the one hand, they are also influenced by these ideas on the other hand.I recently made a big discovery that a major step forward in China's political reform is in terms of human rights.What is worthy of recognition is that decades of continuous progress have been made. In fact, it is the common people's power to supervise the government that has been strengthened.As far as the "Yang Jia assaulting the police case" is concerned, Yang Jia should be sentenced to death, but it is not so easy to make this sentence, and there are so many opinions on the Internet that need to be taken into account.This is a progress.I think the driving force for progress is mainly to learn from Western relations.Since ancient times, China has no human rights thought, and Confucianism has no human rights thought. Confucianism is the king's thought, and human rights thought is "imported".First in Europe, then in the Americas, and now the whole world is talking about human rights.Human rights are not protected by authority, but by the consciousness of ordinary people.Therefore, the Chinese government has contributed a lot to the reform and opening up.We have also visited Japan, which is far less open than China.It's all about the market, and the power of the market creates opportunities for every citizen.The wealthy people in today's society are not all monopolies and centralizers, but most of them are private creative forces, and most of the outstanding economic figures come from private enterprises.

Some reforms are easily obstructed and opposed by vested interest groups. On the eve of the "two sessions" in 2009, many reform hotspots emerged.As a participant in China's multiple economic system reforms, can you offer some suggestions to solve the current situation?How will China's economic system reform continue to advance?Which areas do you think need to be addressed most urgently? Zhang Zhuoyuan: In general, I believe that the implementation of expansionary macroeconomic policies should be combined with deepening reforms.Only in this way can the maintenance of growth, expansion of domestic demand, and structural adjustment be closely linked, and the positive fiscal policy can better play its role in promoting economic growth.We must carefully study the experience of implementing a proactive fiscal policy to overcome deflation in 1998, especially the successful experience of closely combining the implementation of a proactive fiscal policy with deepening reforms. Several major reforms after 1998 were very successful. For example, the abolition of the welfare housing allocation system enabled the real estate industry to develop rapidly; the reform of state-owned large and medium-sized enterprises to get rid of difficulties in three years enabled a large number of state-owned large and medium-sized enterprises to gradually adapt to market competition and develop rapidly Growth; stripping off non-performing assets of large state-owned commercial banks, totaling 1.4 trillion yuan, enriching capital, improving governance, and laying the foundation for a successful listing; joining the WTO in 2001, which effectively promoted the development of China's open economy... Therefore, The implementation of a proactive fiscal policy this time will help the economy better get out of the predicament. It seems that we should also consider a larger plan in terms of reform.

Although there are many difficulties as mentioned above, and even some reforms are not completely consistent with maintaining growth in the short term, they are beneficial to economic growth in the overall and long-term perspective, and we still need to be determined to advance.First of all, we must seize the opportunity of falling prices of resources in the international market, especially energy products, and actively promote the price reform of resource and energy products so that their prices can reflect market supply and demand, resource scarcity and environmental damage costs.We should be committed to reforming the price formation mechanism and relaxing government controls, rather than relying on the government to straighten out prices.This is a basic reform, because reducing or even eliminating the distortion of resource and energy prices has decisive significance for the construction of a resource-saving society, the transformation of economic growth mode, and the optimization of resource allocation. Practical experience has repeatedly proved it.Secondly, we must deepen the reform of monopoly industries, relax the market access of the service industry, and introduce a competitive mechanism to accelerate the development of finance, telecommunications, railways, public utilities, culture, education, and medical and health services, optimize the industrial structure, and increase the proportion of the tertiary industry. Increasing employment in the service industry plays an important role.Maintaining growth at this stage is mainly to maintain employment, and to increase employment mainly depends on the development of the tertiary industry.This requires overcoming various institutional obstacles, breaking various "glass doors", and introducing competition mechanisms in all areas where the market can be liberalized.

The reform of telecommunications and civil aviation requires the introduction of more strategic investors; the reform of the railway sector in the future must first separate government from enterprise.There are also some completely state-owned enterprises that can diversify their investment entities and improve efficiency from the perspective of improving corporate governance. The methods are not exactly the same.Furthermore, it is necessary to establish a bank deposit insurance system as soon as possible.The international financial crisis tells us that establishing and improving the bank deposit insurance system is crucial to financial stability.Unlike the social turmoil that occurred in the world economic crisis in 1929, the current international financial crisis has not seen the phenomenon of people running out of the country, thanks to the establishment and improvement of the bank deposit insurance system.We must learn from this proven practice and step up efforts to establish a system that is conducive to financial stability.In addition, we must deepen the reform of the fiscal system and realize the transition to public finance as soon as possible.Implement a proactive fiscal policy and expand fiscal expenditures, most of which should be used for livelihood projects to improve the welfare of the people, especially low-income groups.This is also of great significance to rationally adjust the structure of investment and consumption.There are also problems with our country's fiscal and taxation system. To some extent, this system makes structural adjustment unsustainable, such as the tax-sharing system. You need money to start projects. This is caused by the system.The current reform of the fiscal and taxation system has great resistance, and we dare not make big moves.It stands to reason that it is more reasonable to focus on direct taxation, supplemented by indirect taxation.

This is the case in developed countries in the West; but we are just the opposite, so local governments get taxes as soon as they start industrial projects, and the tertiary industries such as culture and tourism don't collect much tax. Doesn't this force them to engage in heavy industry?During the Sixth Plenary Session of the 16th Central Committee, it was proposed to increase the proportion of the central government. The main consideration was to resolve the differences between the east and the west and transfer more central finance to the west, but in the end it still did not work out.The most important point is to promote government reform and transform policy functions.The government should not take the pursuit of GDP growth as the main goal, but should put people first, transform into a service-oriented government, and perform the functions of economic regulation, market supervision, social management and public service.If the government intervenes too deeply in economic activities and plays the leading role in resource allocation, it will deliberately pursue short-term GDP maximization.This is not only unfavorable to the transformation of the economic development mode, but also will inevitably make economic growth pay more and more resource and environmental costs, making development unsustainable and harming future generations.In fact, the key to the promotion of the service industry is to solve the problem of the power engine of the local government. If there is no power, coercion will have no effect.For example, if the reform of the fiscal and taxation system can focus on the service industry, local governments should be more motivated to develop the service industry.But in the final analysis, the ultimate question is to promote various reforms that will help increase the income level of low- and middle-income earners and help expand consumption.

Including, a substantial increase in financial subsidies for rural cooperative medical care (the first step is to increase from 100 yuan per person per year to 200 yuan), and increase the personal income tax threshold (for example, from 2,000 yuan to 3,000 yuan or even a little more. ), continue to promote the large-scale and low-price entry of home appliances and electronic products into the rural market, increase the minimum living allowance standard, establish a stable source of funds for affordable housing such as low-rent housing, and establish an assistance system for migrant workers who are unemployed, etc.

China's economic reform has entered a tough stage.Some reforms are easily obstructed and opposed by vested interest groups, and reforms are difficult to take. Therefore, the party and the government must be strongly promoted from top to bottom in order to deepen the reforms.At present, the economic situation is relatively severe, which is also conducive to everyone's efforts to find a way out of reform, so that reform can gain greater impetus.It is important to seize this favorable opportunity, launch necessary reforms in due course, actively cooperate with expansionary macroeconomic policies, and strive for an early realization of economic recovery.

What is the bottleneck of China's economic development? The fundamental bottlenecks China's economic development currently faces are resources and systems.To break through the bottleneck, the only way is reform.The most difficult and urgent reforms lie in the transformation of government functions, fiscal and taxation reforms, and price reforms. The price reform of resources and energy is one of the basic reforms, and only on this basis can we talk about the optimal allocation of resources; otherwise, it can only be "optimized" on the surface, but in fact it is ruining the survival of future generations.

Zhang Zhuoyuan: The National Development and Reform Commission’s survey report on 2,500 companies around the world concludes that 55% of energy saving depends on price reforms (in addition, factors such as technological progress, structural adjustment, and awareness of conservation and environmental protection each account for more than ten percent).China's energy elasticity coefficient is higher than 1, and high energy-consuming industries are developing too fast. The reason behind this is that prices are too low and fail to reflect the scarcity of resources.Therefore, the price reform of resource and energy products should be actively promoted so that their prices can truly reflect the relationship between market supply and demand, the degree of resource scarcity and the cost of environmental damage, aiming at reforming the price formation mechanism and relaxing government control, rather than relying on the government to straighten out prices. Prevent artificial distortion of prices from the fundamental mechanism, so as to give an accurate signal to the production and operation of enterprises and the economic operation of society.China's deepened understanding and strategic maturity on energy issues have been particularly evident in recent years.However, there are still many problems at the practical level. In the first half of 2009, the National Development and Reform Commission stopped the preferential electricity price in some places, but the prohibition continued repeatedly.Why do local governments have such a soft spot for investment in high energy consumption and heavy industries?This is because the issue of energy prices actually touches on two other areas of reform.

One is related to the reform of the fiscal and taxation system.The choice of industries by local governments is more about whether they can get more fiscal revenue.To expand consumption and improve people's livelihood, it is necessary to transform finance from economic construction finance to public finance as soon as possible, and gradually realize the equalization of basic public services.As we have read earlier, the current reform of the fiscal and taxation system has great resistance, and we dare not make big moves.It stands to reason that it is more reasonable to focus on direct taxation, supplemented by indirect taxation, which is the case in all Western developed countries.But China is just the opposite.Therefore, local governments can collect taxes as soon as they start heavy industry projects, but those tertiary industries such as culture and tourism can't collect much tax.Isn't this forcing them to engage in heavy industry? The second is related to the transformation of government functions at all levels.As we all know, the modern government should not take the pursuit of GDP growth as its main goal, but should put people first.As a service-oriented government, it should perform its economic regulation, market supervision, social management and public service functions.Once the government intervenes too deeply in economic activities and plays the leading role in resource allocation, it will inevitably pursue short-term GDP maximization deliberately.As a key field, the energy field is difficult to reform in the process of China's economic system reform, including factors of conflict of interests and theoretical factors that have not yet been clarified.So, how should we view the significance of the ongoing merger and reorganization of large state-owned enterprises in the energy industry?In fact, judging the rationality of state-owned or privately-owned companies mainly depends on who has more advantages in specific fields. In areas where public obligations and social responsibilities need to be assumed, large investment and slow results, and areas that private enterprises cannot handle, it is better for the state-owned economy to dominate; as for the efficiency and vitality of large energy companies, competition must be achieved, even if they are state-owned. To improve the competition with state-owned enterprises, it is still necessary to increase the diversification of shareholders and improve corporate governance.At this stage, the essence of maintaining growth is to maintain employment, and to increase employment, we must overcome various institutional obstacles, break various "glass doors", and introduce competition mechanisms in any field where the market can be liberalized. In 2009, the energy industry took structural adjustment as the main line of work, which was actually to change the economic development model.On the one hand, this requires efforts to improve independent innovation capabilities, save energy, reduce consumption and reduce emissions; on the other hand, it is necessary to deepen reforms so that the economy and society can be turned into a scientific development track.But this is easy to say, but it is difficult to see the effect. During the term of the current government, there has been no obvious improvement.It is also because of the slow effect that it is difficult for some local government departments to choose it as the real work focus.Based on the current fiscal and taxation system and the cadre assessment mechanism, their "optimal" choice is to keep their two years in office, and the economic growth rate should not fall below the preset 8%, even if they will bear a heavy burden in the future , and did not hesitate to launch those "two high and one capital" projects that had been abandoned as waste, and try to push back the contradiction as much as possible... I hope this will not become the "Achilles heel" of the Chinese economy. R & D and market "two skins".What other factors do you think have a more profound impact on China's innovation process? Zhang Wenkui: In fact, we suddenly discovered that there is a more important issue: China's innovation system and innovation policy are linked to the traditional planned economic system, and have a strong brand of planned economy, which is not consistent with the needs of the market economy. Very fit.In the past 30 years of China's reform and opening up, what is the sector with the slowest reform?Science, education, culture and health, bear the brunt of scientific research.Against the background of "two bombs and one satellite", China has established a national innovation system, which we call "innovation supply promotion policy".This system is mainly manifested in industrial development policies and scientific and technological plans, such as the "Automobile Industry Development Policy", the national scientific and technological research plan, and the technological industrialization environment construction plan, etc., aiming to encourage enterprises, scientific research institutes, and universities to carry out scientific research and technological innovation Activities, research and development of related products... To a certain extent, it still promotes technology, but there are great limitations.The country's innovation resources are all invested in scientific research institutions and state-owned enterprises, and those supplies do not need to be driven by market demand, such as "two bombs and one satellite", they are built and placed there, let alone buyers.That is a more special kind of government procurement. Even for procurement, such as military supplies, the military directly orders and pays directly, without forming a real market demand.This caused our past innovation system to be a "closed loop".This "closed cycle" means that the R&D project has been following the closed path of "establishing the project - requesting funds - producing results - conducting appraisal - awarding awards - transferring titles - establishing new projects", which cannot be connected with the market, resulting in a "twin relationship between R&D and the market". skin”, wasting a lot of innovation resources.Innovative projects are strongly oriented towards identification and awards, rather than market and benefit oriented.Many research and development achievements have won a lot of awards and patents, but not many can achieve industrialization.Appraisal and award orientation also significantly increases the moral hazard and corruption in the innovation process, and many even the appraisal is false.A few years ago, the "Hanxin" project of the School of Microelectronics of Shanghai Jiaotong University practiced fraud and defrauded the country of hundreds of millions of yuan in research and development funds. This is a typical example.This kind of project establishment and identification lacks scientific nature and is out of touch with the market.In fact, the real front-end of research and development products should be in the market, first consider the demand, and then promote it through corresponding policies.Merely organizing enterprises and scientific research units to carry out project research does not guarantee that the research results will be successfully transformed into mass-produced products, let alone that these products will truly meet market demand. To achieve this, it is necessary to rely on an innovation system that is opposite to the "innovation supply promotion policy" and more in line with the inherent requirements of the market economy. This is the "innovation demand encouragement policy".We've been calling for this a lot lately.This kind of innovation system is mainly that the government encourages users to purchase innovative products through direct subsidies, tax incentives, price concessions and other measures, guides the public to use innovative products through mandatory standards and preferential measures, or directly purchases innovative products through government procurement.After all, when innovative products based on technology research and development are first launched on the market, due to the small scale of production, the large sharing of research and development costs, and even the immature production process, and the lack of a socialized production supporting system, the production cost is high. Selling prices tend to be higher, dampening demand.At the same time, the performance of innovative products may not be familiar to the outside world, which will lead to low willingness to use.In the past, developed countries also focused on supply promotion policies. For example, European countries organized and funded large-scale R&D activities in the field of aerospace, and the United States, Japan and South Korea in the field of microelectronics.However, in the past ten years, foreign countries have paid more and more attention to innovation demand encouragement policies, while innovation supply promotion policies have taken a backseat.International studies have shown that the government's demand-enhancing policies are often more effective than supply promotion policies such as R&D funding allocations in driving innovation and promoting innovation to a virtuous circle of "R&D-production-sales-re-development". Through innovation demand encouragement, such as tax incentives, differentiated prices, direct subsidies, government procurement and other policies, as well as standard setting and preferential measures, some countries have formed strategic industries with innovation advantages and international competitiveness.The defense industry of the United States, the microelectronics industry of South Korea, and the energy-saving and environmental protection industries of EU countries such as Germany are at the leading level in the world, which is inseparable from their demand-enhancing policies. It should be said that China has begun to introduce policies to encourage innovation demand.You can see that the "Several Supporting Policies for the Implementation of the "National Medium and Long-Term Science and Technology Development Plan"" promulgated by the State Council clearly stipulates that a fiscal fund procurement system for independent innovative products should be established.The State Administration of Taxation also stated that it will implement certain tax incentives for products such as hybrid vehicles. But on the whole, China's innovation demand encouragement policy has just started, and there is a clear gap with developed countries.It is worth noting that since the concept of emphasizing supply promotion and ignoring demand encouragement has been around for a long time, and directly affects the allocation of national innovation funds, whether the existing innovation demand encouragement policies can really be implemented is still a big question mark . China's mid- and long-term scientific and technological development plan outline has identified 16 major projects, including core electronic devices, new-generation broadband wireless mobile communications, and large aircraft, which have already started or are about to be implemented.However, from a supporting point of view, measures such as mandatory standards, government procurement, direct subsidies, and tax incentives should be used to create and expand the demand for related products; at the same time, the distribution system of innovation funds should be reformed accordingly.