Ye Tan: The Foundation Of China'S Economy In The Next Thirty Years

The the fifth Plenary Session of the 17th CPC Central Committee closing of October 18th has set the tone for the development of China's economy in the next five years. Under the pressure of internal and external pressure, economic pformation has become the most important issue. The promotion of domestic demand, the livelihood of the people, energy conservation and emission reduction are all reflected in the social and economic structure pformation in different dimensions.

So far, the consensus gained by our country is that the market improves efficiency. However, the sequela of the powerful market has torn the consensus. The efficiency of the enterprise is based on the low wages, and the growth of wealth mainly flows to the government and enterprises, and the trillions of yuan into the private pockets of grey income.

In the next thirty years, if we can not replace the powerful market with the rule of law market, we can not replace the monopolistic market with a fair market.

Economic growth data can explain the economic volume but not the quality of the economy.

Economist Huang Yasheng once enumerated countries with the following characteristics: the government's savings rate doubled in 6 years, the Gene coefficient was as high as 0.45, and the resident wage growth lagged behind GDP and productivity growth. There were many large enterprises in the country, most of them were state-owned enterprises. The 75% assets of the top 100 enterprises belonged to state-owned enterprises. There was no competition in politics, they were very open to foreign capital, very fond of foreign capital, and high-speed industrialization, and the agricultural population decreased by 1/3 in 20 years.

This is Brazil in the middle of last century. In 1968 -1974, Brazil grew by 11.4% per year in GDP.

But it did not last long. From the middle of 1970s to the beginning of twenty-first Century, the economic and political turmoil in Brazil was uneasy. The growth of GDP in 80s was zero. It was called the "lost ten years" by Latin American scholars.

In the early 50s of last century, Brazil's per capita GDP was 2 times more than that of Taiwan and South Korea. Up to now, about 1/4 less.

For another example, from 1950 to 1975, the average annual growth rate of GDP in the Soviet Union was 4.8%, while that in the United States was only 3.3%.

The situation in the former Soviet Union is very similar. The high investment of the whole nation has brought about a miracle of growth in the Soviet economy. The peak of the ratio between the former Soviet Union's GDP and the US GDP appeared in the 70s of last century, about 45%, which is basically the same as that of 1940.

Countries with large economic volume and poor quality usually have two arrears: first, the growth of national wealth has not become the growth of national wealth; instead, they have created more and more low-income groups, even the abject poverty, by depriving farmers' land and supporting monopoly enterprises.

This makes the country's domestic demand sluggish, and exports must be developed through more products and lower prices, thus falling into a vicious circle of the living economy. Two, monopoly enterprises occupy the main profitable industry, have absolute pricing power, and can easily obtain monopoly income by market share. On the surface, these enterprises are very beneficial to the industrial output and the uplift of GDP, but the cost is the systemic risk of the economy.

In the final analysis, the balance of power and wealth has replaced the civilian economy, and the powerful market has replaced the rule of law market.

At the same time, China has become a global consumer of luxury goods. At the same time, stimulating domestic demand has been calling for years of no effort. Under the pressure of money and exports, it has risen to the height of national strategy under the pressure of domestic and international environment.

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The market efficiency is not improved, so the so-called "people's livelihood guarantee" is synonymous with inflation.

Market efficiency is progress or retrogression. From the valuation of the A share market, by the end of 2009, there were 1718 A share listed companies, 938 of which were holding listed companies in China, accounting for 54.6%, accounting for 52.83% of all A share listed companies, and 78.9% of operating income.

After experiencing the first round of stock market difficulties in the early days of the establishment of the securities market, it has now entered the second round of the second round of restructuring.

In September 19th this year, the State Council SASAC held the first special conference on guiding and supervising the work of local state assets in Hangzhou, which sounded the clarion call for restructuring local state-owned assets.

Because the total amount of local state-owned assets is larger than that of the central enterprises, the potential number of local state-owned assets that can be injected into listed companies is even more alarming. The size of state-owned assets in Chongqing alone is more than trillion, and the volume is huge.

In addition, the various sectors of the industry attach importance to the listing of the enterprises in this industry. Taking the cultural industry as an example, the companies such as private enterprises, such as rare, some full-time manufacturing culture and ideological waste companies, frequently send out good news on the market. What's more, under the banner of the reorganization of the industry, Rizhao Iron and steel, one of the most efficient private iron and steel enterprises in China, was annexed.

This is a typical reverse elimination mechanism.

Many restructuring did not bring fundamental changes to the enterprise management system, nor did it enhance the independent character of the enterprise.

In the process of reorganization of coal, steel and other industries, property law has been destroyed, and the rule of law market has been fundamentally eroded.

In the past two years, great progress has been made in rural social security and medical insurance. In the future, the people's livelihood economy will continue to improve in the framework of "inclusive growth".

What should be vigilant is that if the overall wealth does not increase, the government and enterprises will not give up profits, and the income distribution system has no fundamental change, the so-called universal livelihood security will directly turn into a high inflation, which will aggravate wealth in the process of inflation and gather the monopoly enterprises and the powerful capital.

Economic restructuring is a series of events. The root of the healthy market is the rule of law under efficiency and efficiency under the rule of law. Otherwise, any reform will become a tragic performance of the firefighters.