Chapter 72 "Where is the main battlefield of reform"

After the reform was carried out around 1984, with the decentralization of power and economic recovery, various new governance problems emerged one after another, and major debates and differences occurred among decision-makers and theoretical circles. The theme was: where is the main battlefield for reform.In the "Decision of the Central Committee of the Communist Party of China on Economic System Reform" promulgated in this year, the theme of the reform is described as: "enhancing the vitality of enterprises is the central link of economic system reform, and the reform of the price system is the key to the success or failure of the entire economic system reform." The key.” Then, which one is more important, the “center” or the “key”, is not clearly defined.Hesitation and vacillation on this issue led to a major setback a few years later.

One school of opinion believes that the main battlefield of reform should be the shareholding system innovation of the enterprise system. They are the "enterprise subject reformers", and the representative is Professor Li Yining of Peking University. Among Chinese economists, Li Yining was one of the first to propose that enterprise reform must follow the road of joint-stock system, so he was called "Li Shares".In his view, the biggest disadvantage of the planned economy is that it deprives enterprises of the motivation for independent innovation, thereby distorting the market-oriented allocation of resources. Therefore, the core of all economic system reforms must be the re-engineering of the enterprise system itself, that is, the transformation of property relations. Transformation, in other words, as long as enterprises are "returned" to the market, the economic system will naturally undergo transition. At the end of 1987, Li Yining submitted the "Outline of my country's Economic System Reform from 1988 to 1995" to the State Economic Reform Commission, and gave an "eight-year timetable" for the completion of enterprise reform: from 1988 to 1990, perfect and develop the enterprise contract system, The joint-stock system continued to be piloted; from 1991 to 1992, the contract system transitioned to a joint-stock system; from 1993 to 1995, enterprises implemented a more comprehensive joint-stock system, and generally established enterprise groups with a holding system.During these eight years, the focus of enterprise reform should gradually shift from the contract system to the joint-stock system, from the reform of the low-level management mechanism and property rights relationship to the high-level reform of the management mechanism and property rights relationship.

Another school of opinion believes that the economic reform of Zhongtong cannot be fully achieved by relying on the "single-soldier advance" of the enterprise system, so it must be considered as a whole and carried out in a coordinated manner. They are the "overall coordination reformists", and the representative is Wu Jinglian of the Development Research Center of the State Council . In Wu Jinglian's conception, reform is not only a profound revolution to destroy the old system, but also a grand project to build a new economic system.This system is mainly composed of self-managed enterprises responsible for their own profits and losses, a competitive market system and a macro-management system mainly regulated by the market.These three aspects are interrelated and inseparable.Only when these three pillars are preliminarily established can this economic system operate efficiently.Therefore, economic reform must be carried out simultaneously in these three aspects.

In early 1986, Wu Jinglian proposed a reform roadmap to the central government, which included three links: The first link is to enhance the autonomy and economic responsibility of enterprises.Small state-owned enterprises can liberalize reforms, while large enterprises will gradually realize marketization, cancel administrative companies, and implement a joint-stock system and asset management responsibility system. The second link is the establishment and further improvement of a competitive market.Establish an economic entity that operates large-scale wholesale business, step up legislation to oppose monopoly and protect competition, and prevent the development of market segregation.

The third link is to build a new macro-control system.Including improving the fiscal and taxation system, and advancing the fiscal system of "separate meals" to a new stage of "dividing tax categories and approving revenue and expenditure". In the 1980s when deregulation was the theme of the reform and "full decentralization" was emphasized, Wu Jinglian's plan meant that the central government had to strengthen the ability of macro-control and expand the scope of macro-control, so it had the color of re-centralization. An ancient core proposition of China's economic governance.Wu Jinglian, who studied at Yale University, proposed a very technical "centralization-decentralization" theory of decentralization.

He did not generally advocate decentralization or collection of powers, but separated the two concepts of "administrative decentralization" and "economic decentralization".The so-called "administrative decentralization" means that the central government delegates power to provinces, cities, and counties, and the local administrative agencies manage the economy; "economic decentralization" means that the decision-making power that is too concentrated in the administrative authorities is delegated to enterprises.Wu Jinglian believes that in the current Chinese reform, the pace of administrative decentralization is too fast, while economic decentralization is far from enough. However, it cannot make enterprises become independent producers of commodities, nor can it improve the economic mechanism. The implementation of layer-by-layer decentralization under the framework of the command economy can only result in multiple policies and chaos in the entire economy.”Therefore, he believes that "decentralized command economy is the worst kind of command economy".Based on the above theories, Wu Jinglian came to an important conclusion: the goal of reform should not be generally defined as "decentralization of powers", but should be distinguished from "powers" of different natures. Administrative power needs to be properly concentrated, while economic power should be should be fully distributed.Since the correct direction of China's reform is to establish a market-oriented economy, the decentralization that should be pursued can only be economic decentralization, not administrative decentralization.This economic conclusion of Wu Jinglian quite coincided with the neo-authoritarianism that was quite popular in the ideological circles at that time.

Regarding the opinions of the "enterprise subject reformers", Wu Jinglian believes that no matter what plan is used to reform enterprises alone, it is not enough, because "if enterprises do not conduct business activities under the constraints of a competitive market, there is no competitive pressure, no matter what the establishment No matter what kind of property rights system, it is impossible for enterprises to be truly dynamic.”On the contrary, Li Yining expressed a clear opposition to the "overall coordination reformers".In May 1986, shortly after Wu Jinglian submitted the supporting reform plan, he said to thousands of audiences and many media reporters: "The failure of China's economic reform may be due to the failure of price reform, and the success of China's economic reform, must depend on the success of ownership reform.”

In the face of these two opposing views on reform, the central decision-makers are vacillating.Li Yining was asked to carry out joint-stock pilot experiments in Chongqing, southern Jiangsu, and Shanghai first, while Wu Jinglian's plan was first affirmed at the State Council meeting in June, and then shelved.The debate between the two reform schools in the mid-to-late 1980s had far-reaching influence in the history of reform.China's economic reform is like a chess game that cannot be regretted. No one can go back to the past and repeat the game. , People's expectations are different and lose the meaning of reality.

Their plans may all work.If Li Yining's ideas are followed resolutely, after the corporate entities are completely liberated in the sense of property rights, it will naturally have a huge impact on the policy environment, and the marketization task of the macro economy is likely to be completed as a result.And if Wu Jinglian's thinking is followed resolutely, and the reform of the macro environment is promoted by the marketization and rule of law through administrative centralization, the task of economic reform is likely to be completed. Their plans may not work either.Because Wu Jinglian and Li Yining are basically thinking about the way out within the scope of economic system reform, and the Polish Bruce has warned his Chinese counterparts as early as 1979: economic system reform must be conditioned by political system reform, and must be institutionalized. Only by taking measures can we ensure that we will not return to the old track.Ultimately, reform is a political and social issue.