On November 29th, “2014 Sohu Finance Reform Summit: Pathfinding China†was held in Beijing. Many economists and entrepreneurs have explored and speculated about the hot issues of the current economic society. In the face of an era of farewell and arrogance, this summit is intended to pass the battle and collision of ideas, to pulse the Chinese economy and find the way forward.
The famous economist Wu Jinglian said at the summit that the ultra-high-speed growth supported by high investment has not been maintained, and we bid farewell to the era of arrogance. Wu Jinglian believes that we should take a normal heart to deal with the slowdown in economic growth. We must not rush to loosen monetary policy because of the slowdown in GDP growth, and use large-scale investment to stimulate. Because many years of history prove that it has great disadvantages. Because the biggest problem in our economy is that structural imbalances lead to inefficiency, and investment drives economic growth. The result must be overcapacity and insufficient demand.
Wu Jinglian believes that in order to prevent a systemic crisis, short-term adjustment is necessary, but a strong stimulus policy should not be adopted.
Wu Jinglian also said that we should not be comfortable with low-inefficient, low-speed growth. We must improve the quality of economic growth, optimize the structure, improve efficiency, increase added value, and improve the profitability of the economy. The biggest lesson of past history is that the transformation of the mode of economic growth depends on the optimization of the economic system and other social and political systems. To really find a way out is to advance the reform in a down-to-earth manner in accordance with the requirements of the 18th Congress and the Third Plenary Session of the 18th Central Committee. This road is the only bright road.
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Wu Jinglian: Famous Economist
The following is a speech record:
Wu Jinglian: Thank you, moderator! I still say a little about my opinion on the theme of this meeting.
The theme of this conference is to say "Pathfinder China - Farewell to the era of arrogance and rush". I understand that the era of arrogance and rush in our conference is also the era of high investment, low efficiency and high growth in our past years. On this issue, how can we find our way in such a situation? This is a problem that everyone is very concerned about in recent years. I personally have published this question many times this year, I want to summarize it. For the following five points:
High investment growth supported by high investment cannot be maintained
The first point is that the ultra-high speed growth supported by such high investment has not been maintained. This is a phenomenon in which a variety of objective factors have played a decisive role. This phenomenon is not transferred by people’s wishes. It is gone forever. That is to say, as pointed out by the Central Committee of the Communist Party last year, we entered A shift period for GDP growth. We called the madness, we opened in the fourth gear, and when we stepped on the gas pedal, it rushed forward, but this is no longer possible, and the successor is weak. We have to change to the low gear now because we need to climb the slope. This is an indisputable fact, or in another sentence, we have entered a new normal, that is to say, the old normal, the high speed or super high speed supported by high investment, is gone forever. We entered a rate of decline in growth, falling to someone who said it was a medium-speed, and some said it was a medium-speed stage.
The fact is very clear. In 2009, the strong stimulus, 4 trillion investment, and 10 trillion matching loans made China's economic growth rate rise from a medium speed to 10% and 11%. It only lasted for three quarters. From the third quarter of 2009, the second quarter reached its peak, and it began to decline in the third quarter, dropping to 7.3% in the third quarter of this year for 14 consecutive quarters. Looking forward, in the fourth quarter of this year and next year, it seems that there will be further small steps. Of course, Professor Li also said that there are different opinions. Some people think that there are many factors in the Chinese economy, so the third quarter is not only 7.3, but there is another saying. Some surveys say that our private enterprises have There is a tendency to report the value of production, but there are also many investigation reports that we have some high-level governments that have a fact that the government is understated, so what is it? I am afraid there will be controversy, but in any case, this downward trend is very obvious, and just as I said earlier, these downward trends are determined by objective factors, not by people’s wishes. So I still think that we really bid farewell to the era of arrogance.
Relaxing the roots of the monetary policy and treating the economic growth slower
Second, for the decline in growth rate, I think we should adopt a normal attitude to treat it. Since it is a fact that does not shift people's wishes, we can only look at it calmly, instead of slowing down and not achieving the goals we envision, we will rush to adopt a strong stimulus policy to make this The growth rate of GDP is stretched to the value we expect. This year’s expected goal, this is not a mandatory goal, it is an expected goal. The goal set by the People’s Congress is that the expected target is about 7.5%. No matter how to predict, the situation in the fourth quarter of this year does not exceed this. Scope, left and right, there is no saying that 7.4, 7.3, 7.2 are within this target range. But slightly lower than 7.4, for example, the first quarter was lower than 7.4, people are very anxious, and in the third quarter to 7.3 and very anxious, they hurriedly hope to relax the money, stimulate with large-scale investment.
But this old method has proven its history for many years. It has great disadvantages because the biggest problem we face in the economy today is the lack of efficiency, the imbalance of structure and the inefficiency, so you use this kind of investment to drive economic growth. The result of it is that there is excess capacity, because the higher the investment rate, the lower the consumption rate will be. The total GDP is a constant. The higher the investment rate, the lower the consumption rate. The result of high investment to drive growth must be overcapacity and insufficient demand. This is a dead thing. This thing should be said that Marx was a hundred years ago. Has been analyzed and proven by historical facts.
This is a phenomenon that people can easily see. More profoundly, for example, because of excessive investment and excessive consumption of resources, the debts of our entire national economy are too much, and we eat too much food, which has caused our macroeconomic leverage. Too high, so that its rapid increase in liabilities creates the possibility of actual systemic risks. And this possibility is in a local scope, such as the increase in running companies in recent years, indicating that further increase in leverage is dangerous for our overall economy. Not only that, but with investment to drive growth, its timeliness has become shorter and shorter. Taking this year as an example, the expansion of investment in the second quarter only increased our GDP growth rate by 0.1 percentage points and went down again in the third quarter. In October, there were a large number of new projects, a lot of investment, but now there is no effect on growth. A comparison of advantages and disadvantages can show that using such a method is less beneficial, and the disadvantages are more and more widened, and profits are getting smaller and smaller, so this is an unwise move.
On the one hand, as a short-term adjustment of macroeconomic policy and monetary policy, it is necessary to prevent the deceleration from being too fast. The other is to prevent a systemic crisis, that is, a collapse, so this short-term adjustment is Necessary, loose, but in the general direction, it should be affirmable that a strong stimulus should not be adopted.
Thirdly, in this case, are we in this state, that is, low-efficiency, low-speed growth is a normal phenomenon that we hope to see in the future? I don't think so. The earliest meaning of the new normal term, some executives of the US Taiping Asset Management Corporation raised in 2009, saying that the world economy has entered a new normal, and its meaning at the time was that it was impossible to recover after the 2008 economic crisis broke out. This economy will always stay in a state of depression, a difficult, low-speed advancement. This is not a new normal that we want and hope to see. Because if low speed is accompanied by inefficiency, many of our economic and social problems will become more and more serious. The new normal we hope to establish is that the speed is medium speed, but the efficiency should be higher than in the past. So we need to make every effort to establish a new normal that we hope to see. This is a relatively high-speed medium-speed growth.
The core issue is to improve economic efficiency
How to establish such a new normal? Its core issue, this is the fourth point I am talking about. Its core problem is to improve the efficiency of our economy, so that the increase in economic efficiency can replace the investment in supporting growth and take a larger part. That is to say, to improve the quality of growth, the so-called quality of growth is to change the extensive growth of our past and achieve an intensive growth. Its core problem is to optimize the structure, improve efficiency, increase added value, and improve economic profitability.
This is certainly not a question that has been raised now. As early as the beginning of our reform and opening up, the "Top Ten Economic Construction Guidelines" proposed by the State Council approved by the 1981 People's Congress said that it would surround a core issue. This core issue is to improve. Efficiency, the word it uses is called benefit, and the “ten policy†is surrounded by a problem that is to improve economic efficiency. Of course, this "Top Ten Economic Guidelines" did not make a detailed theoretical analysis. By the time of formulating the "Ninth Five-Year Plan" in 1995, it was clearly proposed to change the mode of economic growth, from extensive investment-driven The mode of economic growth has been transformed into an intensive economic growth model supported by efficiency gains. At that time, we not only studied our own experience, but also learned the lessons of the Soviet Union. The Soviet Union proposed to change the mode of economic growth in the late 1960s, but it has not been successful. When we re-examined our own situation in 1995, we learned from the lessons of why the Soviet Union did not change its economic growth pattern, and found that the system is a fundamental problem. Therefore, our "Ninth Five-Year Plan" is the "five-year plan" from 1996 to 2000, which requires two fundamental changes. The first fundamental shift is the transition from extensive economic growth to intensive economic growth. The second fundamental shift is the transition from a planned economy to a market economy. The second change is the transformation of the system, the first to transform the way the economic growth is transformed.
During the "Ninth Five-Year Plan" period, it should be said that some achievements have been made. However, during the "10th Five-Year Plan" period, because of the large-scale investment in capital-intensive industries, the growth mode has been reversed. To change the mode of economic growth, the "16th National Congress" was later called the transformation of economic development mode. As the main line, the "Twelfth Five-Year Plan", further emphasis on transforming the economic development mode is an urgent task. That is to say, this matter has been raised for a long time, and some periods have progressed in the middle, but in general, it has not been solved, and the accumulation of problems has become more and more serious, so that it is at the end of the "Eleventh Five-Year Plan" and "Twelfth Five-Year Plan." "In the early days, our shortage of resources, the destruction of our ecology, and the macroeconomics, the increase in the leverage ratio of the balance sheet, etc., have accumulated to a considerable degree.
Looking back at this experience, what is the problem? One of the biggest lessons for us is that the transformation of the mode of economic growth depends on the optimization of the economic system and other social and political systems. If we can't improve our economy and other systems through reforms, there are all kinds of calls and even administrative orders that require improvements in structure and efficiency. So the last point is that we must really find a way out, that is, we must carry out the reforms in a down-to-earth manner in accordance with the requirements of the 18th Congress and the Third Plenary Session of the 18th Central Committee. Our reforms before and after the "18th National Congress" are some outposts of reform, but these outposts have enabled us to achieve results in improving our structure and improving efficiency from reforms, and we have achieved results in this regard. For example, in the past two years, our industrial structure has improved in the process of decreasing growth rate, and our employment situation has improved. This shows that this road is the only bright road, let us work together along this line. The road is moving forward.
Thank you!
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