Chapter 33 How to save the market with 4 trillion yuan

The financial crisis made 2009 a year that cannot be ignored in the history of the world economy, making China the focus of world economic recovery.Can China achieve the goal of "guaranteed eighth" GDP growth?How can the 4 trillion yuan government investment play the biggest role? ◎Reporter: The economic goal in 2009 is to ensure an 8% increase in GDP. Many economists are optimistic about this. How do you think about this issue? Chen Zhiwu: I think it is very difficult to keep eight.When the global economy continued to grow, and when China's WTO dividends were not used up, such as in 1997 and 1998, during the Asian financial crisis, the government issued treasury bonds and made a lot of investment in infrastructure. At that time Relatively more effective.Things are different now.

◎Reporter: In your opinion, the 4 trillion yuan economic stimulus plan is mainly invested in infrastructure construction, and the effect on the overall GDP is not obvious. There can be a better way? Chen Zhiwu: In a country or a society, you cannot and should not always build a lot of railways, bridges, and roads to drive growth in this way.Because after all, these are means of transportation, and the transportation network is to help allocate and transport people, goods, and commodities between different regions.So under the current circumstances, the international demand is seriously declining, and the domestic demand is also severely declining. At this time, if we don’t put more energy on stimulating private consumption, but take more money, To invest in new infrastructure, in the end we will find that so many buildings, roads, railways, and airports will be built, and no one will use them in the end. In the end, people’s income will There will be no growth, no substantial improvement in job opportunities, employment security.

◎Reporter: In your opinion, the 4 trillion yuan should be invested more in stimulating consumption and demand, so how to do it? Chen Zhiwu: Specifically, I think the best way is to give all small and medium-sized enterprises across the country a one-year tax exemption in 2009.As far as I know, small and medium-sized enterprises, that is, companies with an annual revenue of less than 300 million yuan, contributed about 46% to the national fiscal and taxation last year, which was about 2.5 trillion yuan.If in addition to exempting this small and medium-sized enterprise from tax for one year, if each family and individual with a monthly income of, for example, less than 10,000 yuan is also exempted from tax for one year, a total of about 3 trillion yuan can be left in small and medium-sized enterprises. Enterprises, stay in the families of ordinary people, and they decide how to spend them.The resulting effect will be completely different from building railways, building more buildings, and building more airports.Because in the past few years, the new job opportunities created by China's small and medium-sized enterprises accounted for more than 75% of the country's annual new job opportunities, that is, out of 100 new job opportunities, more than 75 were created by small and medium-sized enterprises.Well, we know that the issues that everyone is most concerned about and worried about are the issue of employment and social stability.

◎Reporter: From your point of view, the core of our guarantee of growth should be to ensure employment and increase the income level of residents. However, if we invest 4 trillion yuan in infrastructure construction, can we also improve the level of employment? Chen Zhiwu: Spending money at any time can bring some contribution to GDP and create some employment opportunities.But in terms of actual effect, is the GDP created by this 4 trillion yuan and the new job opportunities created by it the most ideal?The Olympic venues cost hundreds of billions of yuan, but perhaps created one or two thousand new job opportunities. From this example, we can also see that more investment in infrastructure can generate new job opportunities , will be very, very limited.

In the past 30 years, China's economic construction has always been focused on production and investment, and then manufacturing for export. Today, China's economic model must and should undergo some transformation, from investment-driven, export-oriented to small consumption drive.Just because China is at such a critical point of transformation, not just because of the global financial crisis and economic crisis today, the Chinese government should provide tax rebates, or subsidies, or give money to low- and middle-income urban and rural residents .Because the future macro-control should no longer stimulate growth through investment, but should be transferred to stimulate consumption to drive growth.

◎Reporter: Is there any country that adopts this method in the world, or is there a model to learn from? Chen Zhiwu: Many countries do this.I have just been to Brazil. The Brazilian government has done this many times. The United States has just sent tax rebates to ordinary ordinary income families from April to June 2008.In fact, China and Hong Kong have done the same.It seems that this experiment was done in Dongguan in 2008.But I think this can be done not only in Dongguan, but also in the whole country. ◎Reporter: But the national conditions may be different. For example, South Americans, they are Brazil, they have money, they spend it; Indians have money, they spend it.But the Chinese generally live frugally. If the tax is refunded to me, I will still save it and not spend it. You will not be able to stimulate consumption.

Chen Zhiwu: But the problem is, if these low- and middle-income families, peasant families, and urban families are not given tax rebates and subsidies, their income is not high, and they don't want to spend money!Therefore, on the basis of the existing income, each person has an extra thousand yuan. Compared with the current situation, everyone's willingness to consume should be higher on the whole. ◎Reporter: If a few trillion yuan is issued, each ordinary person will not have many, one thousand or two thousand. We have been used to a saying over the years that we should concentrate our efforts on big things. We have indeed concentrated our power and done a lot of big things. Under the guidance of this kind of thinking, are we not going to abandon these principles?

Chen Zhiwu: In the past 30 years, we have concentrated our efforts to do big things, and we have achieved many big things. Especially in the past, when China's industrial foundation, infrastructure, and transportation network were generally relatively backward, by concentrating our efforts to do big things, This makes the process of China's industrialization progress very fast.However, the construction of a country cannot always follow this road endlessly.Because after all, if we take a step back and think about it, why we need to develop the economy and why we make these investments, in the final analysis, it is for the common people to live a better life, live a better life, and live a happier life.Private consumption should be a goal to be changed and promoted in the end, because if everyone cannot consume, has no money to consume, and the income cannot reach the wallets of ordinary people, then in the end, so many buildings will be built, so many infrastructures will be repaired, and so many industrialization will be done. process, what is that for?It is not possible to de-industrialize for the sake of industrialization, and it is impossible to do infrastructure construction for the sake of infrastructure construction. In this sense, when the infrastructure reaches a certain level by concentrating on major tasks, it should be in accordance with common sense and should be the right time. It is to make a transformation, to make an adjustment.The spirit of concentrating on big things in the past may be preserved, but the big things to be done are no longer specific buildings or industrial bases, but the improvement of the lives of ordinary people.This should be the new big thing.

It is Brazil, because China can be said to be more comparable to Brazil.The Brazilian government's investment in medical care accounts for 5.4% of Brazil's GDP, while China's investment in medical care, social security and unemployment benefits is only 2.4% of China's GDP. much money.According to my calculations, counting 1.3 billion Chinese people, last year, the government spent 451 yuan on each of them in terms of medical care, social security, and unemployment subsidies. This is a very small amount. number. ◎Reporter: In your opinion, we invest less in medical care, education, and elderly care, but what does it mean?Like the United States, it cannot solve all the problems by investing in medical care. To what extent is our investment a good standard?

Chen Zhiwu: There is no absolute standard for this.Because it is true that if there is a government that invests too much in medical care, education, and people's livelihood projects, then of course this will bring some moral hazards, and people may think that it is good to work or not to work. , Anyway, the government has covered it for me, but in comparison, China is far from that level. ◎Reporter: Let’s talk about the micro level. For example, I want to borrow money to buy a house, a car, a school, etc.But after I got the loan, the current system of the government did not give me a guarantee of confidence. I dare not borrow money. How should I solve this problem?

Chen Zhiwu: On the one hand, why should the government undertake the most basic social security, the so-called subsistence allowance, whether it is for rural people or urban people, it should provide basic bottom-line security and bottom-line medical security These, as well as basic investment in education; the second aspect is to further accelerate the development of the financial market, because you just mentioned how to deal with illness, how to deal with pensions, large expenses, buying a house, or What if the child wants to go to school.In addition to the basic bottom line protection provided by the government, individuals can use their own income to buy some insurance, including medical insurance, accidental property insurance, pension, and this includes students, providing children Buy bonds for education expenses, or buy investment funds, etc. Through these different financial investment portfolios, you can spend your entire life, imaginable, various risk events, and uncertain risk events and pension needs can be arranged more ideally.After going through these arrangements, of course you will feel that not only for today, but also for the future economic security will increase a lot, and then your willingness to consume will also increase a lot. ◎Reporter: In fact, your suggestion is that the money should be invested in medical education and social security, and the money should be directly distributed to residents. In fact, many countries adopt this method, and the other is to give tax rebates to small and medium-sized enterprises Taxes, these few steps. Chen Zhiwu: Give small and medium-sized enterprises tax exemption for one year, and the fiscal revenue will definitely increase after a while.One possibility is to issue treasury bonds. At present, China's treasury bonds account for a very low proportion of GDP, and there is still a lot of room for the issuance of treasury bonds.In fact, from a historical point of view, I know that we Chinese have always viewed this debt very negatively.For example, according to my research, China began to issue treasury bonds from 1982 until 2004 or the previous two years.Although according to our traditional perspective and traditional concept, the Chinese government has issued so many treasury bonds and has such a large annual fiscal deficit, China should be very weak.In contrast, during the Ming Dynasty, the Qing Dynasty basically had no fiscal deficit until 1898. Even after the Opium War and even during the Taiping Heavenly Kingdom period, the annual fiscal surplus of the imperial court was at least hundreds of thousands, or Several million taels of silver are so much. But the actual situation, as we know, no matter in terms of absolute national power or relative national power, we can see that China’s national power today is much stronger than that of the Qing Dynasty at that time, so this shows that China’s national power is much stronger than that of the Qing Dynasty. There is no need to worry about the issuance of national debt, whether there is national debt, or whether there is a fiscal deficit.In fact, looking at a larger scale and a longer history, we all go back to China in the Ming Dynasty. Four hundred years ago, the Ming Dynasty in China also saved tens of thousands of silver every year, and the annual fiscal surplus was huge. At that time, India, Both Japan and Turkey have large fiscal surpluses.In contrast, every Western country four hundred years ago was heavily in debt.You are like the United Kingdom, the Netherlands, and Spain at that time. The debts of these countries are much higher than the current total national debt balance of the United States, relative to GDP.But looking at it now, which countries are stronger today? These countries that were heavily indebted back then are today’s developed countries, and those countries that had a lot of money in their treasury back then are developing countries today, or It is a backward third world country.This historical lesson should let us see that at critical times, in order to maintain the order of the entire society, to stabilize employment, and to lay a better foundation for the country's future development, we might as well go into debt. ◎Reporter: What is the truth here?That is to say, if we spend next year's money today, we will have greater development if we spend tomorrow's money. Chen Zhiwu: On the surface, the debt of the United States is the country with the highest debt among all countries in the world, and the national debt is also the country with the highest national debt. But at the same time, we have to admit that the United States is still The most powerful country in the world.There is no obvious relationship between this debt and the strength or weakness of that country, but precisely what it is, who is willing to borrow money from the future to spend today, so that everyone can use it today, tomorrow, and the day after tomorrow. Opportunities for employment and entrepreneurship have been expanded. ◎Reporter: Isn't the subprime mortgage crisis in the US today also caused by borrowing money?Does that mean we are in this situation, should we review this borrowing consumption model, or continue to learn this borrowing consumption model from the United States? Chen Zhiwu: Continue to study.Because the United States can be said to be a bit excessive in borrowing and consumption, which is beyond the scope that the current financial market, financialization, securitization, and capitalization can accommodate.But for China, the situation China is facing is exactly the opposite of that of the United States. The development of industrialization for more than a hundred years from 1780 to 1900 made the United States at that time just like China today. Capabilities have reached unprecedented heights.So at that time, the challenge faced by the United States was the same as that faced by China today. How to realize the transformation of the economy from a production-driven, investment-driven to a consumption-driven model. The challenges facing China today are also the same, especially this time, under the threat of the global economic crisis, China relies on domestic consumption growth to drive growth pressure. This necessity has been further increased, so At this time, in the end, China must also develop the financial market and develop the private financial lending market. In this way, more individuals, more Chinese families, and more Chinese people can make better arrangements. A lifetime of consumption.From a simple theoretical point of view, what kind of concept is this? If everyone looks forward from the age of 20, we will find that his entire life, from 20 to 25, 30, 40, with age As he grows, his income will get higher and higher.But for a typical person, the motivation to consume will decline with age, just like myself. I think in comparison, when I was in my twenties, the most The time when I am willing to spend money is also the time when I can spend the most money, and the time to get the most benefits from spending money is the time when I have the least money.But today I am 46 years old, my income is higher than ever before, but my desire to spend money is lower than I have ever been before, so in this simple sense, the development of financial markets, one of The very important purpose is to help each of us to better resolve the situation where the growth curve of lifetime income and the curve of consumption willingness growth are completely contradictory.