Liu Shangxi: China should carry out a reform that matches the great changes and shocks

Liu Shangxi: China should carry out a reform that matches the great changes and shocks
After the domestic epidemic was effectively controlled, several local governments issued consumption vouchers in an effort to stimulate consumption and stimulate the economy.How to treat the role of consumer vouchers and how to stabilize consumption?Sauna Night Network interviewed Liu Shangxi, Dean of the China Academy of Fiscal Sciences around these issues.”The role of consumer vouchers is short-lived, and their role in stimulating consumption cannot be overestimated.Various measures can be taken to stimulate consumption.For example, by helping people in difficulty to stabilize consumption.However, it is more important to drive residents ‘private consumption based on public consumption and weaken residents’ preventive motivation to increase savings.”Liu Shangxi said.Recently, many people have suggested direct payment of subsidies to help those in need.How to help the poor to stabilize consumption?Liu Shangxi said that he is not against the direct payment of subsidies, but opposed the payment of money without a goal and without distinction.”You can’t use the” copter to spread money “to send money. You can use the current social security system to accurately identify the money of the rescued object. This method of sending money is more effective.”” Different from the generally accepted view that steady consumption stimulates the economy, there are also views that the government should expand employment by stimulating infrastructure investment to stimulate the economy.Under the current budget, should the Chinese economy bear consumption or investment?As such, Liu Shangxi believes that both consumption and investment are important to the Chinese economy.However, if there are obstacles to institutional mechanisms, neither can play an effective role in the economic cycle.More importantly, it is necessary to reform and break through the mechanism and system in which both play a better role.Among them, the most important thing at present is to stimulate market investment confidence and endogenous power by improving the business environment.Liu Shangxi further increased, “There is no panacea for the Chinese economy in the world ‘s great changes. The way out is to come up with a reform that matches the world ‘s great changes and the impact of the epidemic, so that its major system can be fully demonstrated.Advantage, grasp the initiative of sustainable development at a turning point in world history.From a historical point of view, the Roosevelt New Deal of the United States during the Great Depression in the contemporary world can carry out a reform, turn crisis into opportunity, and transform the impact of the epidemic into an endogenous driving force for reform.”The role of consumption vouchers is to drive public consumption with public consumption at one time.” Sauna Nightnet: To stimulate consumption, many local governments issue consumption vouchers.How do you assess the role of consumer coupons?Liu Shangxi: Now that the epidemic has just been effectively controlled, some local governments hope to release consumption vouchers to stimulate consumption. This way will indeed play a certain role, but this effect will be very short-because ordinary vouchers have time limitsSome coupons must be used within a week, and expire expired.And after consumers use the coupons, it is difficult to determine whether they will continue to maintain a strong shopping desire.Therefore, consumption vouchers are only one-time actions on residents’ consumption, and their role in stimulating consumption cannot be overestimated.Moreover, it is necessary to prevent the “bulging effect”, especially the purchase of daily consumer goods. There is more inventory at home, and there will be fewer purchases in the future until the inventory is digested.Sauna Night Net: Some people believe that the key to stabilizing the economy is to stabilize consumption.How to boost consumption?Liu Shangxi: First, to help the poor, this is a measure to stabilize consumption.Second, consumption vouchers can also encourage consumption to a certain extent, but their effect is one-off.The third and more important measure is to drive public consumption with public consumption.Recently, there has been an increase in savings.This is because under the impact of the epidemic, uncertainty and public risks have risen, and the preventive promotion of residents has increased. If this trend continues, it will lead to further shrinkage of consumption.Therefore, we have to consider how to weaken residents ‘preventive motives and increase residents’ consumption by expanding public consumption.Public consumption is divided into two major blocks: One is to maintain government-operated consumption, such as redistributed employee salaries, purchased goods and services, and improve the government’s digital intelligence level, etc. These expenditures belong to the government’s own consumption expenditures.The second is public services for consumption by members of society, such as kindergarten, compulsory education, vocational education, higher education, vocational training, medical treatment, health knowledge popularization, epidemic prevention, medical examination, parks, museums, public rental housing, pension, relief and socialPublic order and so on.The government can provide public consumption directly, such as parks, schools, hospitals, public rental housing, etc., or indirectly through the purchase of services, such as education, medical, public health, training, etc., can be purchased from the market or societyThe service is then provided to the general public for consumption, that is, the government pays for it and the public consumes it.Issuing consumer vouchers, training vouchers, education vouchers, platform service coupons, etc. are also ways to provide public services.It is also possible to provide public service consumption through the government and social capital cooperation model.Public consumption promotes social equality, and can also reduce residents’ preventive motivation, that is, residents’ sense of stability and certainty in the future are improved, and residents’ current consumption can be expanded.The provision of public consumption is inseparable from the construction of public facilities such as schools, medical institutions, data centers, parks, etc. This means that expanding public consumption will also drive public investment or private investment through government procurement.Central cities, urban agglomerations and metropolitan areas have a lot of room for improvement in terms of public consumption. From the perspective of more than 200 million migrant workers who work and live in cities, they do not enjoy the same city replacement, and their public consumption in education, training, medical care, etc.Is seriously inadequate.However, due to institutional reasons, local public city governments are generally less motivated to provide public consumption to migrant workers.In addition, from the perspective of the economist, consumption depends on two aspects of support: income, desirable products and services.In order to expand consumption and increase, residents’ income must increase, reorganization, and high-quality supply in the market must increase.The domestic consumption structure is upgrading, residents have a strong ability to shop overseas, and the consumption outflow is continuously expanding, becoming the world’s major consumer of luxury goods.However, domestic supply lags behind the pace of upgrading the consumption structure. Even daily consumption items such as pots, kitchen knives, and milk powder can be purchased from foreign countries for middle income.Now that the overseas epidemic has led to shrinking imports, can we find a way to convert this part of overseas purchasing power into domestic purchasing power?The key to this is to improve the quality of supply. If there is no high-quality supply, residents will not consume if they have money.If there are agreeable products and services, some consumer demand of residents can only be potential, and it is difficult to turn it into reality.”I’m against giving money to all people without distinction” Sauna Yewang: In the recent Chinese economics community, there is a lot of talk about direct payment of subsidies, including the trapped people within the unemployed.Should China follow the example of sending money abroad to its citizens?Liu Shangxi: We can’t just see the appearance of sending money abroad. We think that if we send money abroad, we should also follow the example.Of course, I am not against disbursement of money, but against blind, untargeted, indiscriminate disbursement of money.When discussing this issue, we must first clarify a question-what is the goal of making money?Regardless of the United States or Japan, these countries have a clear goal of giving money to the people: to fight the epidemic.In order to effectively control the epidemic, the government requires residents to be isolated at home and to reduce outings.But many families abroad have low savings rates, and many families may become paralyzed once they lose their jobs.If the government does not pay money to subsidize the people, many people will refuse isolation and insist on going out to work to make money.Therefore, in order to implement an effective isolation policy and protect the basic social order, so that residents can stay at home in peace and stability, the government supplements to ensure people’s basic daily lives and stabilize people’s hearts.Now too many people in China advocate giving money, what is the goal?It should be to help the unemployed and the low-income people affected by the epidemic.Before bailing out, we need to figure out: what is the current scale of unemployment, what is the living condition of the unemployed, who should be bailed out, and how the bailout is done by the government-is it by means of “helicopter money” or more precise and effectivethe way?I don’t think it’s possible to use the “helicopter money” method to send money in order to pay it.A more feasible method is to use the current social security system to accurately identify the relief target: first, to make good use of the unemployment relief mechanism in cities, urban unemployed residents can receive unemployment benefits.Second, make good use of existing poverty alleviation mechanisms in rural areas.Due to the impact of the epidemic, many migrant workers are temporarily unemployed and can only stay at home.These people do not participate in unemployment insurance and cannot receive unemployment benefits. Will they become poor households?It is necessary to use the mechanism of poverty alleviation to accurately identify some people in need of assistance, divide the migrant workers in need of assistance into areas such as minimum living security and poverty, and guarantee the basic life of this part of the unemployed.It is important to note that under the impact of the epidemic, poor households who have previously lifted out of poverty may return to poverty, and they must pay special attention to this group of people.These two ways of assistance are also to send money, but the way to send money is more accurate and effective.From the perspective of financial affordability, under the current situation where the “three guarantees” at the grass-roots level are already very difficult, we cannot afford to “spread money from helicopters.”Who doesn’t like more money?The general public wants the government to send money, but the money should help the society to be fair and keep the bottom line, that is, to protect the basic livelihood of the people.Spreading money beyond “basic” will result in unsustainable finances.Sauna Night Net: The best relief is still to secure employment and increase employment opportunities. How to achieve this goal?Liu Shangxi: From the perspective of job security, employment positions can be divided into two categories: one is the enterprise ‘s job position, and it is necessary to minimize the collapse of the enterprise and keep the existing job position; the other is the non-enterprise job position, such asSelf-employment and flexible employment of individual industrial and commercial households.Under the epidemic, tens of millions of individual industrial and commercial households have been greatly affected, and they must have precise policy support.For example, whether it is possible to extend the loans of individual industrial and commercial households, to reduce or exempt part of the loan interest rate, or to supplement the financial part.This is more important than tax relief, because tax relief is mainly an incentive policy, not a rescue policy.For the unemployed, the college students who are about to graduate must create more employment opportunities.College students can be encouraged to start their own businesses through self-employment.This requires the government to provide training and guidance for entrepreneurship, and provide policy support in entrepreneurship loans and capital.Fundamentally, it is also necessary to ensure employment by improving the business environment.The problems of inequality and long-term hidden discrimination of private enterprises in market competition have not been completely solved so far.Under the epidemic situation, improving the business environment is probably a more important and urgent issue.This is because, only when the business environment improves will everyone have the idea of investing and starting a business, thereby driving employment.In recent years, the reform of deregulation and service has greatly improved the business environment, but under the impact of the epidemic, higher demands have been put forward.The fundamental method of ensuring employment is to improve expectations, take the crowd route, and form a benign incentive to the market.”Accelerate the reform of institutional mechanisms to allow market investment to participate in the investment of public services.” Sauna Yewang: Unlike the view of solid ownership, there are views that under the current trend, infrastructure investment should be used to expand employment and stimulate the economy.What do you think?Liu Shangxi: First of all, government investment is not optional, and some necessary infrastructure projects have to be taken, but government investment may not be able to expand jobs and stimulate demand, thereby stimulating the economy.There are many uncertainties, and many conditions need to be met. When the relevant conditions do not exist, it is difficult for government investment to achieve the expected goals.Judging from the current conditions, it may be difficult for infrastructure investment to play the same role as it did in 2008 and 2009.To stimulate the economy and expand employment through traditional infrastructure investment, this effect will be reduced, because the space for traditional infrastructure investment becomes smaller and its multiplier effect is greatly reduced.The effect of the “Four Trillion” plan in 2008 was remarkable, and the “scale effect” of the policy played a huge role in boosting market confidence at the time.In this regard, it is currently embeddable.But the path of government investment is now difficult to continue.Second, the Politburo meeting was held in March to accelerate the construction of new infrastructure such as 5G networks and data centers.The new infrastructure has high technical content, fast update and inheritance, and application scenario driven. Based on these characteristics, the government cannot replace the market.New infrastructure investment mainly depends on the market, not the government.What the government should do is plan, guide and provide policy incentives.In fact, unless it is an old infrastructure such as the “Tie Gongji”, there is almost no market participation, the key is to use the construction model.Traditional theory believes that public infrastructure is a public welfare project, which can only be invested by the government, and the market will not participate.This theory is out of date, and the practice of government and social capital cooperation has long broken the popular theory in the past.If we implement the “project portfolio”, or implement the “developmental government-society cooperation (PPP)” model, or implement asset securitization, it can be solved through model innovation. There are already many successful cases in reality.It is necessary to change traditional concepts, give full play to the power of social capital, and allow the government and the market to form synergy.The formation of synergy between the government and the market is precisely an important institutional advantage of the country.The central government has always been an expert in allowing social capital to enter public service areas such as pension, education, and medical care. However, in reality, it is difficult for social capital to enter these public service areas due to various restrictions.Now there is a phenomenon that after the scale of local government special debts has expanded, too much social capital has been squeezed out.The purpose of government investment was originally to promote market investment (or private investment). Now, instead of stimulating it, it is left to fight alone.China’s economy has reached 100 trillion yuan, and the local government’s special debt of several trillion yuan alone is difficult to pry. It still depends on the power of private investment.Under the conditions of the epidemic, speeding up the reform of institutional mechanisms and allowing market investment to participate in public service investment is a necessary condition for determining the effectiveness of macro policies.”Don’t discuss abstractly whether China’s economy depends on consumption or investment to solve the problem of a better function between the two.” Sauna Yewang: For the current Chinese economy, should we rely on investment or consumption to promote?Liu Shangxi: I think consumption and investment are both important to the Chinese economy. Do not abstractly discuss whether the modern Chinese economy should be driven by consumption or investment.If there are problems with the institutional mechanisms, neither of them will be able to function effectively.The important thing is to solve the problem of the contradiction between the two, and to speed up the reform of the mechanism and system.The current unprecedented impact also requires unprecedented reforms to match.For example, what is currently important is to stimulate confidence and motivation in market investment, but the business environment has both new and old problems.Before the outbreak, private enterprises lacked confidence and private investment growth was weak.Under the epidemic situation, the business environment has new problems.For example, in the process of resuming production, in some places, private enterprises have to go through layers of approval before resuming production. This reveals the habitual intervention of some local governments and their departments, and they are unwilling to give up their power easily.Under the epidemic situation, improving the business environment becomes more important and urgent, because only after the business environment is fundamentally improved, the confidence of private enterprises naturally rises, and private investment will also increase, employment, income, consumption,Investment will form a cycle by itself, and it is no longer necessary to struggle with whether to rely on consumption or rely on investment to stimulate economic growth.We should take this opportunity to work hard to optimize the business environment, fundamentally boost market confidence, and solve the problem of weak market investment.To stimulate confidence and momentum in market investment, we must also accelerate the reform of state-owned enterprises and accelerate the transition to “capital management.”Once great progress has been made in the reform of state-owned enterprises and state-owned assets, there is more room for private investment to participate.”If you really make up your mind to reform, reform can be effective immediately.” Sauna Night Net: Compared to stimulus policies, is reform a slow variable?Liu Shangxi: It is wrong to think that reform is a slow variable.To deal with the current severe expectations, in the eyes of many people, it is first necessary to rely on stimulus policies, as if reform is difficult to reach the blue sky, it is necessary to take it slowly.There are also views that the reform has entered the deep water zone, and many problems cannot be solved at once.If you don’t want to really reform, there are 10,000 reasons.If we are really determined to reform, reform can be effective immediately.Reform is not a matter of the future, nor is it a slow variable, or a matter of determination for self-revolution.We must eliminate this cognitive misunderstanding.The central government has been reforming and promoting reforms by developers, but it seems that it is like punching a fist on cotton, which has been resolved by various hidden injustices and inactions.In this regard, reform has indeed become more difficult.We can also observe and understand reform from history.During the Great Depression of the 1930s, US President Roosevelt adopted a series of drastic reform measures and issued the “Emergency Banking Act”, “National Industrial Renaissance Act”, “Agricultural Adjustment Act”, “Social Security Act”The bill substantially adjusts the relationship between the government and the market, the relationship between the federal government and the local government, and the relationship between the government and society, etc., to eliminate the obstacles that have always led to economic crises and hindered economic development.The reason why the United States can rise after World War II is inseparable from the large-scale institutional innovations promoted by the Roosevelt New Deal in the crisis.It can even be said that the institutional dividend of Roosevelt’s New Deal has continued until now.So, now, Roosevelt’s New Deal has introduced so many reform measures in a short period of time. Are those reforms slow or fast?Obviously, reform can be a fast variable.There is no silver bullet for China ‘s economy in the face of the world ‘s great changes, and it can no longer rely on some small and fragmented policies to solve this problem. The way out for China ‘s economy is to match the world ‘s major changes and the impact of the epidemicReform.This ability fully demonstrates the significant institutional advantages and grasps the initiative for progressive development at a turning point in world history.From a historical point of view, the Roosevelt New Deal in the contemporary world economic depression can accelerate the pace of institutional innovation, and transform the impact of the epidemic into an endogenous driving force for reform.Sauna, Ye Wang Hou Runfang Intern Zhao Fangyuan Editor Chen Li Proofreading Liu Baoqing

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