Keynesian Xiaonian not solve the current problems in China

 Source: Sohu Finance
 by the Peking University, Peking University HSBC School of Business, organized private equity Peking University Alumni Association hosted Peking University Institute Inauguration PE first annual Following is a wonderful view
Xiaonian: China Europe International Business School professor
Xiaonian: Professor Xie Xiesong, Xiexie Hai Wen Dean! We Chinese love the number 8, every 30 years of reform and opening up the number 8 is going to be something big happens, 78 years of reform and opening up began 98 years also experienced the Asian financial crisis, and now to 08, what will? We are not feng shui, but to do research.
so that the Chinese economy system, economic system is changing, then change the economic structure, if we can not be adjusted in the system, the existing institutional framework, strong economy out of the question, should the outbreak of a long time, so I put that occur every 8 changes interpreted as if our economic system, now even in relation to political reform, can not keep up with the pace of our economic development, in the economy, some problems, some conflicts will in some way manifested intense.
We can see the situation in 2008 with 98 years on the surface very much similar to the Asian financial crisis 97 years, external demand began to decline, to 98 in the central right decision to change the direction of fiscal policy, fiscal policy of neutral expansionary fiscal policy into a .08 in the same encounter such a situation, but the financial crisis was not the neighboring countries in Asia, but in the heart of the world financial system the United States, Europe broke out, so the financial crisis how many times the impact of efforts to the Asian financial crisis in 97 years.
the financial crisis is not just drop in external demand, but also allows us to be affected by export-oriented economy, the situation is now our main domestic demand while external demand slowdown, a slowdown in domestic demand Although there is no external demand rate so obvious, but the proportion of domestic demand, China's economy accounts for up to, its economic impact in China no less than external demand.
98 years, we deal with the financial crisis and external problems, 98 years, we launched a active fiscal policy has been to the 2003 implementation of the end of 2004 the Ministry of Finance announced that the proactive fiscal policy into neutral again, ending a 5-year expansionary fiscal policy. It now appears that in 2008 became the first active fiscal policy year, said to have some feeling, but a bit contradictory, and yesterday we just commemorated 30 years of China's economic reform and opening up, and today we are here to talk about Keynesianism. in which you can not find the Keynesian reform and opening, the Keynesian solution .98 years of China's problems can not Although we implemented a proactive fiscal policy, but a real downward track from China to reverse the economic factor is not the fiscal policy into the rise, but 98 of the housing reform was launched, it has been released in the economy there is a long backlog in demand for real estate. the reform process, we suddenly found a new market, that demand for the larger society is not released, so the demand for housing reform this release We started .98 can see the real estate investment and fixed asset investment rise almost simultaneously, by a number of fixed-asset investment rose to double digits soon, and maintained a rapid growth.
changed in 98 years, China's economic performance for Another important developments of measures, that is, before and after 2000, China's accession to WTO, WTO accession after the accelerated growth of foreign trade we can see, we not only outside of the domestic real estate market, and suddenly the WTO, as China is more closely into the world economies, we found a large overseas market, since then the demand for external driving China's economic growth to become the fiscal policy, more importantly, created by the reform and opening up new needs created by the reform and opening up new investment opportunities, released by the reform and opening up new economic vitality.
Today, we are, when the 30th anniversary of reform and opening up If we look back, I think we should fully summarize the experience of the past 30 years. Why Keynesian fiscal revenue and expenditure alone can not solve China's problems? After years of positive development, especially the rapid growth of investment, China's economic structure has been a serious imbalance. This imbalance must be corrected through further reforms, and not rely on fiscal policy, and rely on the government to spend money to change this structure, the specific imbalances manifested in the imbalance between investment and consumption, we rely on many years of investment to promote economic development, 07 years when the proportion of fixed assets investment accounts for close to 45% of GDP, which is the highest in the world, and has more than Japan and South Korea in the economic take-off phase of the peak value of .45%, what is the concept? dollars of GDP per year and create 100 45 dollars for investment, not the courage to improve people's lives. and the corresponding investment is consumption, private consumption, the consumer, or the name of private pay, in 2007 only 35% of our GDP, which is created the wealth of 100 dollars, only 35 dollars used to improve people's living standards, for consumption, growth for growth over the years we have forgotten the ultimate goal of growth in the end what seems to become a target GDP growth, Several security must ensure the effectiveness of the work of a few can be called, but the researchers know that the economy, economic growth is not a target, just a means to the ultimate goal is to improve people's living standards. We suffer from a There is a plot of growth, we are in the pursuit of growth, the growth process of the purpose of my mind. growth is not the end, only a means, the ultimate goal is to achieve full employment, the ultimate goal is to improve people's living standards. now 100 dollars from 45 dollars to create wealth for investment, only 35 dollars for public consumption, do not balance this structure? If we rely on at this time, government expenditure to promote economic growth, is bound to further expand investment in the proportion of the economy, further suppressing consumer spending. So I said can not solve the Keynesian problem of the current China.
our second large structural imbalance is the imbalance between manufacturing and services. manufacturing GDP, 50 %, and service sector GDP, less than 40%, and showing a declining trend, our many years of emphasis on investment, emphasizing the manufacturing sector, making a lot of overcapacity in industries, the recent non-ferrous metal, coal prices, oil prices down on the show has been a serious imbalance between supply and demand to what extent. In this case, further investment in manufacturing, further investment in infrastructure, economic structure will be more severe distortions.
summarize our own experience, sum up the international experience of other countries, economic development in such a crucial moment, I think we should firmly grasp the success of our past experience, this is the persistent push forward reform and opening up, creating new demand and create new productivity, create new businesses, create new products, create new technologies, rather than the old model has been pegged to the past, blindly additional investment, by government investment, then where to seek new opportunities to seek new economic growth point? new economic growth point in the service sector, manufacturing, manufacturing is not a simple, but in R & D-driven, high value-added as the core, the differentiation of new products and new technologies to our manufacturing industry to the next stage of development into.
slowdown in economic growth, I think our policy on the goal should not be too much emphasis on important position, as long as consumers keep a job to keep, in order to increase the rate of consumption, to the imbalance between consumption and investment over the state of adjustment to ; preserving jobs, more than 80% of GDP, India's services sector also accounted for 50% of GDP, our service too far behind. and our emphasis on economic growth for many years, but why is a capital-intensive manufacturing industries to create employment opportunities can not be effective , so that we infected with the the creation of employment opportunities, create employment opportunities for effective development should focus to services, so we will relax controls on the service industry, and now we are too strict control services.
so reform and opening up, creating new investment opportunities and create new employment opportunities, is a more effective response to the current approach to economic difficulties, rather than simply relying on the government continue to spend, spend, spend. Services reason behind the long-term, because we service implemented over the control. For example, the financial industry, we in the finance industry has great development potential, China is no more than 80% of financial services to small and medium enterprises, farmers do not we have 6,7 billion financial services. We can imagine this how much space and financial development, telecommunications, transportation, culture, education, media and entertainment, health care, all of these services can create new investment opportunities and new employment opportunities, we need to do now is to continue our past 30 years of successful experience in reform and opening up the economy to deal with difficult situations. liberalization of services, relax, and lift the control of the service industry, believe that the market, I believe that people's creativity. We are talking about confidence in the reform and opening up 30 years occasion, we are the future of the Chinese economy is full of confidence. but our faith is not based on contrast media, our confidence is based on a clear understanding of the economic situation, our confidence is based on the effectiveness of reform and opening up , our confidence is built on the market, creativity, creative people on.
if we can, like as in the past 30 years, persist in reform and opening up task, I am very confident that we can overcome the current difficulties, we China will usher in another higher level of sustainable growth, this growth may be less than 10%, but this growth is to achieve full employment, this growth can continue to increase people's living standards, this growth can be maintained social stability, thank you!