Chen Zhiwu: Let The People Share The Wealth Effect Brought By Economic Growth

In 2011, we should vigorously promote the reform of the people, curb the expansion of tax burden, give migrant workers the right to migrate and settle in towns.

2011 continues.

In the past more than 10 years, not only did we not change the investment dependent and export led growth mode, but we also strengthened our dependence on investment and exports, but the economy could still grow rapidly.

Why? There are three reasons: urbanization bonus, WTO bonus and international order bonus.

First, in 1998, we comprehensively promoted the reform of housing marketization, and at the same time introduced housing mortgage loans for families and individuals. The reform measures, coupled with the urbanization process, brought a huge development opportunity to the real estate market and related industries, including the catering industry, furniture decoration industry, retail industry and financial industry to a new height.

Second, from joining WT O in 2001 to the financial crisis in 2008, and even in 2010, in the 9 years, the entire Chinese economy and enterprises have enjoyed the WTO dividend, giving full play to the advantages of China's labor and manufacturing industries, making exports grow substantially every year.

Third, although China's exports have encountered varying degrees of trade barriers in some countries in the past thirty years, in general, the international order has been very friendly to China's reliance on foreign trade to drive growth. Almost all countries after the cold war opened almost unreservedly to Chinese goods. There was not much rejection of Chinese products from the perspective of strategic security and trade protection, and the world market had not been classified into two or larger camps.

But today, the above three factors have undergone fundamental changes.

The pressure of economic growth mode pformation has been pushed to a whole new height. The driving force of future economic growth can only come from domestic demand, especially private consumption demand.

So how can economic growth be changed from investment dependence to private consumption?

The core reason inevitably lies in the basic institutional arrangement. The growth of China's private consumption is hard to do with the state-owned system, the role of the government in the economy and the unrestricted taxation right.

According to my research, the higher the proportion of a state's state-owned economy, the slower the growth of private consumption will be at the same GDP growth rate.

The reason is very simple. When the main assets are state owned or land owned or public owned, the revaluation of the property rights of enterprises, the profits of state-owned enterprises and the revaluation of the land will make it impossible for the ordinary people to feel and enjoy these assets gains and not get the wealth effect, because these assets are exclusively owned by the government.

Over the past few years, economic growth has increased the value of land, and the profits and assets of state-owned enterprises have increased a lot, but these have not affected the income and wealth of ordinary people, so the economic growth rate that ordinary people can feel is very limited.

Why China has to maintain 8 and maintain 9 in order to maintain the minimum stability? Because the GDP growth rate that ordinary people can feel is only about half of the official GDP growth. They can not share the economic growth.

In order to promote the pformation of growth mode, the following three aspects of reform must be carried out in 2011.

First, the remaining state-owned assets and state-owned shares will be changed.

That is, the establishment of the national interest fund, the remaining state-owned enterprises into the shares, the central enterprises into the national equity fund, local state-owned enterprises in the province's national equity fund, and then share the shares of these funds into the hands of ordinary people, let the whole country.

Second, it restricts the taxation power of all levels of government and restraining the impulse to increase taxes.

The result of the loss of tax burden is the decline of private disposable income and the private disposable wealth, resulting in the worsening of the wealth of the nation and the poor, resulting in the weakening of private consumption.

People's congresses and CPPCC committees at all levels lack the right to tax and restrict the budgetary budget of the government.

To change this situation, we must give full play to the independent supervision function of the NPC system, and hold various hearings regularly. Each quarter has at least two weeks. Let Specialized Committee of the National People's Congress call the leaders of the corresponding departments to come to accountability, so as to curb the runaway of the tax burden.

Third, to solve the urban household registration problem of migrant workers, so that they can enjoy the same rights and income treatment and welfare benefits of urban residents. This will not only enable migrant workers to get the dignity they should have, but also increase the income of hundreds of millions of migrant workers, thus bringing huge consumption kinetic energy.

Of course, we need to further improve the social security and medical insurance system, and improve all kinds of financial markets, so as to solve the problems of people's future life safety, so that they can spend more boldly today and speed up the development of the whole economy.