Economic Policies Always Oscillate Between "Steady Growth" And "Structural Adjustment".

Since China's economic development and reform have entered a new normal, economic policies are always swaying between "steady growth" and "structural adjustment". If the adjustment structure is placed ahead, we must allow for relatively low growth and growth fluctuations, and be determined to adjust the structure. But for policymakers, steady growth and structural adjustment are all important. Although theoretically, the two are not contradictory, they often have problems in practice. As a result, the government has introduced various policies to stimulate growth at some times or in some areas, but at other times, the government tends to introduce structural adjustment policies, and the two kinds of policies are often in conflict.

Today, people basically agree on the concept of "supply side reform", that is, to achieve structural adjustment under the premise of stabilizing economic growth. However, this consensus does not seem to solve the practical problems faced by China's economy. Some time ago, authoritative figures stressed the "L" growth of China's economy. But how low is the bottom? Can the bottom be stable? If the bottom keeps falling down and can not be stabilized, the future of China's economy will be quite uncertain. The question of whether China will sink into the middle income trap is a response to this uncertainty.

Why did this happen? The Third Plenary Session of the eighteen Central Committee of the Communist Party of China has made top-level design guidelines for China's next economic reform and development. The purpose of the third plenary session is to let the market play a decisive role and the government will play a better role. Has there been any deviation from the direction determined by the third plenary session in the process of specific policy decisions and implementation? The "supply side reform" has defined five main elements, including capacity production, inventory elimination, deleveraging, cost reduction, and compensation board.

These five elements can basically be combined into two major items. In essence, the "going to capacity" and "de Stocking" are the same thing, and the "deleveraging, cost elimination and compensation board" is essentially the same thing, that is to say, all of them need to carry out the structural reform.

The drawbacks of some economic policies in the implementation process are obvious. In the first two terms, there are two practical policies. First, we need to turn off some enterprises, or even use administrative means to shut down overcapacity enterprises. The second is to find ways to output capacity, mainly as "one belt and one road". The former is to reduce supply while the latter seeks new demand. These two items are very correct, but the question is how the concept of "urbanization" has disappeared. Cut excessive industrial capacity "The most effective way. Today's capacity in many areas is the product of large-scale urbanization in the past. For a long time after the eighteen big periods, urbanization has also been emphasized as a new fulcrum for economic growth. Why do we stop emphasizing urbanization now that we can get rid of a lot of capacity?

The problem is that there is no transformation in the way of urbanization. Whether the government or enterprises are willing to build a building or a ghost city, they will not lose their knowledge in other aspects of urbanization. Despite the emphasis on new urbanization, we do not know what is new. In fact, from the experience of some very successful cities, it is not difficult to put urbanization in the process of transformation from quantity economy to quality economy.

The second major aspects of the supply side reform are institutional reform. There are two specific aspects, one is institutional cost (leverage), the other is the provision of new institutional supply. But there are big problems in these two aspects. In terms of institutional cost, the power of administrative examination and approval is an important one. However, power has not been devolved, but it has become more complicated because bureaucracy at all levels has increased the cost of system in disguise. Most entrepreneurs today feel that business is becoming more and more difficult. If the factors of bureaucratic inaction are taken into account, the cost of the system is even higher, because no enterprise has been dealt with by government officials.

Even worse. system Excessive supply or even wrong institutional supply. This is especially reflected in the financial aspect. China's financial economy has completely evolved into a financial speculative operation. China, on the one hand, has become a victim of foreign capital, but now its own financial operations are also beginning to harm its own businesses. In many areas, some of China's leading enterprises have been quietly acquired by foreign capital. Various acquisitions are more like buyout because they are not developed but acquired. By contrast, how difficult is the acquisition of Chinese enterprises to the West. Both state-owned enterprises and private enterprises will be obstructed by western politics. The Chinese government has no effective institutional supply for foreign enterprises to acquire Chinese enterprises, not to mention economic benefits, and many aspects do not even have the concept of national security.

What about self injuring? Today, there are lots of financial companies. Buy High quality private enterprises. Financial enterprises were supposed to promote entity businesses, but the result was just the opposite. A large amount of capital flows from entity enterprises to financial enterprises. This in itself restricts the development of physical enterprises, and the irrational acquisition of private enterprises by financial companies is irrational. State owned enterprises should help the development of private enterprises instead of destroying private enterprises.

Internet financial innovation is hiding endless crises under beautiful words. Early Wenzhou financing methods (such as the Wu Ying way) are more effective than the current P2P way, because the Wenzhou way is carried out in an acquaintance society and has mutual trust, but the way of deception promoted by P2P like method can be carried out by the whole world, and no one can supervise it. The financial and Internet fields have been developing unprecedentedly in recent years, but the atmosphere of speculation and deception has undoubtedly permeated the whole country, so that people began to call the economy "speculative economy".

Institutional supply in the field of state-owned enterprises is even more problematic. State owned enterprises are very important. In theory, it is not wrong to make state-owned enterprises bigger and bigger, but they can not over politicize and ideologically state enterprises. For example, the whole northeast has suffered too much damage from state-owned enterprises. There is no room for private enterprises. The development of both state-owned and private enterprises is unbalanced, and the decline is inevitable. Many state-owned enterprises are losing money today, and the government should support them in financial or other ways. Local governments support state-owned enterprises only because local state-owned enterprises are obedient, and are profitable to officials and their families, rather than to society. Many state-owned enterprises can actually be privatized, because private enterprises are also the tax base of the government. The government can manage private enterprises from the tax system. Now local governments simply put eggs in their baskets, regardless of whether their own basket can hatch chickens.

Under the guise of public private partnership, state-owned capital invades the private sector in large numbers, but state-owned enterprises only hype real estate and finance. Private enterprise space has not increased, but also greatly reduced. This is the background of private enterprises running away in recent years. If it continues, it will become the "public private partnership" in the 50s of last century. Today, nominally is a market economy, money has the final say, but the money of state-owned financial enterprises comes from the state and has strong backing. No private enterprise can compete with state-owned enterprises.