Chapter 28 Chapter 6 How China Rescues the Market (2)

Everyone still remember in November 2008.Our government launched a 4 trillion yuan rescue project plan.We once said that the 4 trillion yuan itself accounted for 16% of my country's total, while the US government's $700 billion bailout plan only accounted for 6% of the US GDP, so we can see how much the Chinese government has invested. Its purpose is to prevent economic depression.President Hu Jintao pointed out that China will more clearly experience the negative impact of the global financial crisis, and the employment situation in my country in 2009 will be very severe.I think this sentence is very inspiring, at least for me personally.

The employment situation in 2009 is grim, and employment is the most important part of my country's economic system, so how can we help ordinary people solve the employment problem?As I mentioned in the last few chapters, the 4 trillion yuan bailout plan was originally intended for infrastructure construction, which has a significant effect on the employment of the central and western provinces and has a positive stimulus effect, that's for sure.Therefore, if we say that we are only here to solve the employment problem, I think that the infrastructure construction in the Midwest itself has positive motivation, and I agree with this point.But when we implement the policy, I think we should calmly face the severe employment situation.While we invest so much money in infrastructure construction in the Midwest to stimulate employment, I would like to ask what are the side effects of this.

For example, out of the 4 trillion RMB this time, 2 trillion RMB was financed by banks. According to my understanding of the Chinese banking system, under this pressure, the banks will squeeze out 2 trillion RMB from the private economy and transfer it to Local governments are engaged in infrastructure development in the Midwest.Although the infrastructure construction in the Midwest itself can increase employment, the side effect I am worried about is that when resources are transferred from the private economy to the public construction field, the private economy itself will face a more depressed situation due to the large loss of resources. will reduce overall employment.Therefore, although the 4 trillion yuan rescue project plan can increase employment, we should pay attention to whether it can make up for the loss of employment in private enterprises caused by the loss of resources.On December 26, 2008, Zhou Xiaochuan made a speech at the China Financial Forum, I think.His speech this time is very important.He said that expanding domestic demand is the most important thing to stimulate China's economy.The government should adopt more comprehensive and broader policies to raise income and support consumption.Of course, we don't know the extent to which this talk has been implemented.But at least, I think the government has put the issue of the private economy on the agenda.That is to say, the policy has gradually begun to tilt towards the private economy.Increasing income and increasing consumption is the top priority in itself, so the government should not just do infrastructure construction.To increase the employed population in the Midwest, but also to prevent the private economy from entering depression due to the loss of resources, thereby affecting the employment of the private economy.

Therefore, what Zhou Xiaochuan means is to stimulate domestic demand through consumption, that is to say, to make ordinary people richer, have more money to buy products, and then produce them after buying them, thus creating a virtuous circle: after production, more employees must be hired, and then Give him a salary, he needs to buy things again, consume again, and then the factory produces more products.Through this way of stimulating consumption, the employment of the private economy can be maintained. So I think that in addition to investing in infrastructure in the Midwest to increase employment, the current policy should focus on increasing consumption.So in this chapter, let's talk about what's wrong with China's consumption and how to stimulate China's consumption.