One text seen through the issue of China’s economy and the future!

  • Date: Sep 13, 2016
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Two important conditions to achieve high growth
One on the next drive China’s economy, the first question from the One “new normal” talk. We should have a new normal One a correct understanding of the “new normal” is, according to economic laws, not in accordance with economic laws have transgressed the market. For example, a few years ago the Chinese economy One straight growth, sustained growth does not meet the laws of economic development can not be sustained. For this reason, we moved into the rapid growth, in line with the current actual situation in China.
Bring rapid growth adversely affected five aspects: One is the excessive consumption of resources; second is the ecological deterioration; Third, some industry overcapacity; Fourth widespread economic inefficiency; five is to promote the rapid growth we missed technological innovation and structural adjustment the best time. After the international financial crisis in 2008, including the United States, Germany, Japan and other developed countries are as much as possible to find out the future path of economic development from the technical innovation, rapid growth and we are busy, delay time, so that we should bear in mind important issues.
In addition, the performance of the new One important norm is that our economy into the high-speed growth. One general, 7% or even 6% to 7% growth in high-speed, high-speed growth is also not easy, and not into the high growth would really be able to achieve high-speed growth, because it requires important conditions: One structural adjustment; the second is innovation. Without innovation, there is no restructuring, the rapid growth is impossible.
Downward pressure on economic reasons are many
The second problem is that we are currently experiencing downward pressure on the economy. Chapter One, to analyze how the downward pressure is formed in the economic downward pressure on us how to do? To figure out the problem first, and then think of ways to find out countermeasures. This is not the growth itself, but the slowdown problem. In addition, we should also see the cost to maintain long-term growth is too large, our present problem is the process of rapid growth in previous years, a large number of redundant construction, including low-level redundant construction, together with the local excess capacity generated by the superposition of various factors sequelae. The biggest problem of overcapacity One cause is the consumption, and the other One is the waste of resources. A few years ago we super-fast growth is actually a waste of resources for growth, inefficient growth.
Second, speaking from the perspective of economics, economic growth depends on the base is to be steadily growing, is still getting smaller and smaller. Today our base and 10 years ago, is growing every 1% increase, the difficulty will be greater, such a situation is not sustainable, so there is a diminishing One process, the rapid growth in previous years, in fact, we also continue to grow today’s difficult.
Third, the instability of the international market for our exports, foreign trade resulted One of these adverse effects. We encountered two difficulties: Japanese high-tech products is our opponents; Southeast Asian countries in terms of low-end products are our opponents, though their labor productivity is lower than us, but they are cheaper wages. So, we are in such an environment, it should be recognized that today’s difficult international economic situation are related.
Fourth, we must understand the economic downward pressure, why you want to reverse the situation difficult? One member restructuring is not an easy thing, it has become so much over-investment, now reversed, One is obviously not an easy thing. Therefore, the restructuring should have a ton output capacity determination, can not tolerate the loss of structural adjustment, and insist that it is very important, if not get on will come to naught, so to realize the enormity of the restructuring.
Fifth, technological innovation. Technological innovation should not be impatient, we can really capture the market of technological innovation need to go through years of accumulation. Such as Shenzhen Huawei nor One erupted developed, it is now harvest period, but also aware that Huawei can not stop, will continue to innovate.
One topic is currently “Internet + innovation.” Internet is of great significance, but we are still in its infancy, still exploring, who do not know what the Internet will push us to the place, which is also economists unexpected problems. But this is One kind of trend, a huge role of the Internet, will be showing a lot of new technology that allows restructuring to become more successful, but whether it can stimulate economic development, but also tested One segment of time.
For this reason, when we deal with the economic downward pressure to adhere to two things: One is structural adjustment, restructuring is not available through this One off non-; the second is technological innovation, leaving the masses innovation, entrepreneurship road. Be firm on the idea, do not fantasy, nor the same old tune, ups and downs of the economy not good for us. So, we have to talk about the macro-control, focus on the orientation regulation, because regulation is directed structural control, attention to fine-tuning and preset, so that we can adapt to the downward pressure of the current economy.
Future, high investment does not necessarily bring high employment
The third problem is the changing attitudes, high investment does not necessarily bring high employment, which is a new problem that we encountered. In the past in terms of new jobs is seen in economic growth, high economic growth, create new jobs, the more. This concept is in line with the situation in the past, because the Chinese economy is still relatively low level of running, but now the situation has changed, because China to achieve economic growth and development of high technology in industrial upgrading, so for the moment, the employment the problem is not by large investments can be resolved.
Recently I was in business trips, the future director of the enterprise briefed me on the site, they have invested heavily, I asked him, you are increasing the number of jobs? His answer is very simple, do not increase a One, have layoffs. I asked why? He said that investment in the past and do not like the One, technological innovation investment is thoroughly modern. For example, instead of using robot labor, efficiency is improved without increasing employment, older workers had been re-arranged, and some retired workers younger One point is training again, after coming first of all is One technical workers, and not before like the One.
I ask other companies, how to solve the current problem of employment, they say it is not resolved by high investment, but the private mobilize the enthusiasm, let them work, entrepreneurship increased employment. There’s a lot of the corporate sector spread out, One divisions One is a unit of innovation, they have One to help people work inside, development, money. Now many people have the idea that change is out of the labor force from the countryside, I do not advocate out of work. First, techniques, and then there are more places need you, you can also start, even home business. Therefore, there is a great folk entrepreneurial enthusiasm, this is the future of China One main way to solve the employment. It was expected that the office does not require 20 years later, in the home office staff to take full, so we need to change the concept of employment, which means that not necessarily solve the employment by high investment. Of course, in spite of improvements in technology, but a modest investment in infrastructure and manpower training is still needed.
“Money shortage” is mainly due to difficulty in obtaining loans
The fourth question, higher interest rates may not be able to curb inflation, this is a new point of view. Traditionally, inflation is due to the investment demand too much, too busy as a result of consumption caused by too much, in this situation, it is possible retrenchment approach to solve the problem of inflation. The early 1970s, the United States occurred stagflation, One aspect is inflation, and the other One aspect is unemployed, is unemployment and inflation coexist. Thus, when mainstream economists feel overwhelmed, because according to the traditional theory, the expansion of aggregate demand will easily lead to inflation and aggregate demand generated small unemployment, inflation and unemployment are so improbable.
Then US President Richard Nixon to find that mainstream economists, let them wonder why there are ways to study stagflation, the conclusion was there were two monopoly power: One kind of monopoly power of unions, union workers believe that it can control the action, it insists One point is that wages must be rigid, that can only rise not fall, wages drop to strike; there is One kind of monopoly power of transnational corporations, multinational companies think the price is that it controls, so it has the rigidity of the price, the price can only rise can not be reduced, even if it can not be drained things will decline. The simultaneous presence of two rigid, like a child playing seesaw game, economists advocated to hold the child, if the two hands two children hold the whole, wages and prices jump up. In fact, it is entirely contrary to the rules of market economy point of view, but Nixon actually accepted, he introduced a new economic policy, which is in the 1970s the famous American wage freeze and price controls, but when later do not go, Nixon policy will go into liquidation.
To the 1980s, President Reagan accepted the view of the supply school due to the problem lies in the supply, so produce more new products through innovation, focus on innovation can drive economic growth, so from the United States after 80 years on economic development get rid of the stagnation, inflation problem solved.
This experience tells us that the eyes can not be short-sighted. Today inflation is before investing too much demand caused by too much, so the investment in investment, the bank lowered interest rates to lower interest rates in order to adapt to the new economic growth.
“Money shortage” how come? I specifically for this problem go several visits city in Zhejiang, it is not lack of money supply, M1 (narrow money loans, ie cash + demand deposits), M2 (broad money, ie cash + demand deposits + time deposits) are a lot of supply. “Money shortage” is mainly loans, the bank was unreliable private enterprises, loans not being paid big problem, so look for trust loans to large state-owned enterprises, but these state-owned enterprises do not need so much money, the loan interest rate is lower , how to do it? put out the money transfer.
Private enterprises get loans, divided by state-owned enterprises to find One part of the money. In addition, many people turn to their own people to get loans, so popular in Zhejiang on One phrase “cash is king” is the most important is to cash in his hand, with the cash will have a One cut, so capital chain will not break, the industry chain will be smooth, investment opportunities will be able to start. Eventually, every family business is super normal reserves, the result of a large amount of cash reserves, so that M1, M2 has not changed, but still tense.
So, if there is inflation in the future China, One set to consider the various factors.
Market can be created
The fifth question, in any industry should know the market can be created, which is One new proposition. I study in Cangzhou, Hebei, Cangzhou Suning specializing in fur, some people say that business is bad, fur previously sold mainly to Russia, but the purchasing power of the ruble did not, so Suning fur even much cheaper than in Europe, Eren do not buy. Finally, I gave them a few words of advice: One is to “make the product more personalized.” Because the current consumption and a few decades ago One is not like the early 1990s or even late 1990s are all wave- consumption, fashionable, but not anymore, and now the consumer is personalized. The second is “to make the service more humane.” U and dealing with customers, u with a straight face, as if I was right u One kind of gift, you’re wrong. Third, “the brand hit abroad.” China’s current brand has not been fully established, but the brand is relying on years of product quality and set up. Fourth, “the consumer remain in the country.” If the country can get a good quality toilet cover, how people will go abroad to buy? To consumers remain in the country, this can be solved, we are now free trade area is to solve this problem.
I often talk to students in cases One Guanghua School of Management, and then one manufacturing plant wood comb, looking for a salesman each with four One batch of samples to the designated temple monks sell. One of the first One salesman did not sell, because the optical head does not need to comb the monk said. The second salesman to sell dozens, he told the monks said comb hair than there are in addition to other features, such as scraping the scalp itching, beauty, etc., so the monks sold dozens of the temple. The third salesman to sell a few hundred, he observed a lot of pilgrims to the temple, incense is very busy, but pilgrims knock finished after the first hair a bit messy, ash fell on the hair a little dirty, so he went to the abbot said, temple incense-wang, so enthusiastic pilgrims, the temple should be concerned about them, put a few in each temple in front of the comb, so that they feel that they care about the temple, they come will be more diligent. So he sold the hundreds. The fourth salesman to sell a few thousand, he directly to the abbot to chat, have said that the temple was out of work to get through human relations, wood comb is the best gift you can engrave “Buddha in the heart,” the comb “Jishan oriented “and turned it into a temple of cards, so he sold thousands of the One to the comb.
This story tells us that the market can create future markets and create product features changed, replace the old power with new features, we can create the market. Today, we go out, and then one set of products to make adding new features, so that products meet the new needs of consumers, so that we can open, create new markets.
Social perspective in the “Internet +” era
The sixth question, the economic and social problems of people. All previous books in economics are talking about economic man assumptions. Economic man assumption is that people from the lowest cost, the maximum benefit considerations, but today’s world is changing, just talk about economic man assumption is not enough, social people the assumption that people do not fully consider the economic human point of view, but also from Social contemplate.
For example, A and B are two places to invest, to invest in A high profits, low cost, no investment returns in B A so high, the cost is greater than A, so people from the economic point of view, people will invest in A , yet consider someone from the B, willing to invest in B. Why invest in B it? There are a variety of reasons, the first One reason is that B is my hometown, I have developed, rich, home also can be so poor, I am willing to invest and set up factories there, laid-off problem, which It is from the perspective of the home. One person may also think: I have always lived there, where to go to school, work, many people look down on me, I say nothing, so I left the start there, and now there are the results, I will come back to see who u look, I was not u have eyes like nothing, I came back to do a big business one, u change their past stereotypes. One individual or also lived here in the past One period of time, people have done One more thing I’m sorry, today may feel guilt, regret, and now I was a success, is there to do One a plant, to the local atonement.
People have a variety of ideas, today we enter the “Internet +” era, the idea of ​​human society will gradually increase, so a simple consideration is limited to people from the economic point of view.
Emphasis on “third adjustment” – moral strength
The seventh question is to find and make good use of the third regulation. We used to talk about the first One kind of regulation is market regulation, the market is One only invisible hand, with laws of the market regulator; and later government regulation, the visible hand with government to regulate with laws, regulations, policies to adjust. Is there a third regulating it?
Emergence of markets is a matter of a few thousand years ago, the exchange of goods between tribes, they produced a market. Governments regulate later, it will produce in the future with the state and the government. But the human market regulation and government appear before adjustment, to survive and thrive is to rely on the moral force of the regulation. With after-market and government regulation, regulate morality also play a role, as the saying goes “little home city chaos, chaos home town”, the occurrence of small disturbances, redneck running toward the town, relatives and friends that the city safer, so small home city chaos; chaos rural home, a major upheaval in the city people to run the country, but the chaos when the market failure, the government is paralyzed, but humans still survive, the society continues to evolve. Never mind there is no market, no government does not matter, because there exist moral force adjustment.
We should pay attention to the third regulation, it is the cultural and moral force regulating, cultural adjustment that everyone self-discipline, abide by the common rules. Community cultural construction, cultural construction companies have contributed to the moral force of human self-discipline, which is great for us in the future.
Attention to resource allocation effects, so that the state-owned economic value
The eighth problem is that attention to resource allocation effects. Over the years, the study of economics is the production of utility input output ratio, input unchanged. Output to increase production efficiency increase, assuming the same output, reduce investment, but also to improve production efficiency, so the production efficiency is important. Emerged after the 1930s, a second efficiency, called the efficiency of resource allocation, resource allocation efficiency assumes that investment is established, the configuration also has the effect of mediation under the One, with the effect it is to produce M A way configuration, with B M + 1 formulated in a manner to produce effects. The idea came out, had two coexist efficiency, productivity focus in the field of micro-enterprise management, production management department; efficiency of resource allocation focuses on macro, macro enables the efficiency of resource allocation, so we should pay more attention in future improve the efficiency of resource allocation. For example, state-owned assets spillover efficiency increased? Can configure it better? One a way to change the configuration, if it is more efficient than it is now, then it will add more state assets.
Finally, with regard to the future of the economy, we can draw two conclusions: One change is that it far exceeds our expectations; the second is likely to be dramatic changes and changes in acceleration. In this case, it is difficult to anticipate 30 years, especially 50 years after the economy is like. There are blue-collar and white-collar difference? Use the currency as well as how much?-Scale enterprises will become very small? There are future people will buy car? Many questions that we think of today. We also want to think of, because this economy is a major change in the earliest possible whimsical, whimsical but things may eventually become a reality.

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