Zhang Ming, Institute of Finance, Chinese Academy of Social Sciences: Promoting class mobility is an important way to achieve common prosperity

The tenth meeting of the Central Financial and Economic Commission held on August 17 also mentioned the problem of "social mobility" when it was deployed to promote common prosperity in high-quality development and build a basic institutional arrangement for the coordination of primary, redistributive and tertiary distribution. The meeting pointed out that "to create more inclusive and fair conditions for the people to improve their education level and enhance their development ability, to smooth the upward mobility channel, to create opportunities for more people to get rich, and to form a development environment in which everyone participates." ” Zhang Ming, deputy director of the Institute of Finance of the Chinese Academy of Social Sciences and deputy director of the National Finance and Development Laboratory, believes that promoting social mobility is an important way to achieve common prosperity, and efforts can be made to solve the problems of education and housing prices.

Zhang Ming, deputy director of the Institute of Finance of the Chinese Academy of Social Sciences and deputy director of the National Laboratory for Finance and Development.

Southern Metropolis Daily (hereinafter referred to as "Nandu"): At the important meeting of the central government, the focus was on common prosperity, how do you think of the central government's shift from "first getting rich to driving later wealth" to common prosperity at the current point in time?

Zhang Ming: There are at least two aspects of special significance. First, the comprehensive construction of a moderately prosperous society in 2020 has completed a phased goal, and the next stage is to build a socialist modern power. One of the most important features is common prosperity, and how to achieve common prosperity within residents, between urban and rural areas and between regions is an important issue in the next 20 years or so.

Second, in the new development pattern of "double circulation" proposed last year, the key to internal circulation is how to fully stimulate the domestic market. At present, due to the limited growth of the middle and low income groups with stronger marginal consumption tendencies, the overall consumption capacity of the domestic market is weak, from the perspective of activating the domestic market, it means that we must improve the income level of rural residents, improve the income level of private enterprise employees, and adjust the imbalance of income distribution within residents through some redistribution policies.

Nandu: What changes have occurred in policy priorities between efficiency and equity in the current state of development?

Zhang Ming: For a long time in the past, efficiency has been placed in the most important position, and fairness is only a balance. Of course, efficiency is still the focus, but as our per capita GDP exceeds $10,000 and becomes a middle-income country, the previous model of simply emphasizing growth has begun to have problems, such as environmental pollution, resource shortage, and accumulation of systemic financial risks, so it is now at the stage of simply emphasizing rapid development to high-quality development. The so-called high-quality development is to weigh the speed of development and many other problems to systematically solve a series of negative problems before, that is, to make the "cake" bigger and divide the "cake" in parallel. I think the adjustment has begun since the 19th National Congress, and the overall policy guidelines have begun to shift from efficiency to fairness.

Nandu: The fundamental to achieving common prosperity lies in the improvement of productivity, how can investment and consumption and other factors work together to promote high-quality economic development?

Zhang Ming: In the field of consumption, there are mainly two aspects involved, one is urban residents, at present, urban residents are relatively saturated with the consumption of traditional manufacturing categories, and the future consumption pain points for them are mainly concentrated in high-quality service products, such as high-quality medical care, nursing homes, etc.; second, for rural residents and rural families who settle in the city, it is more necessary to focus on allowing them and urban residents to enjoy the same public services, such as education policies, pension systems, etc., to reduce their cost of living and improve the income of rural residents. To achieve the expansion of consumption and consumption upgrading at the national level.

As far as the investment field is concerned, there is currently overcapacity in many traditional manufacturing industries, and in the context of the Sino-US game, in order to promote high-quality economic development, the key is to develop advanced manufacturing industries, such as chips, new materials, aerospace and other card neck technologies.

In addition, in order to achieve the goal of "carbon peaking and carbon neutrality", it is necessary to promote the adjustment of industrial structure and energy structure, such as pooling data on energy production, safety, economy, consumption, etc., building a perceptible, knowable, visible and controllable data resource system, and creating an energy industrial Internet; vigorously developing green and low-carbon industries, and promoting the integration of emerging Internet technologies and low-carbon industries.

Nandu: You raised the issue of income distribution at the core of common prosperity, what are china's problems in income distribution from a global perspective?

Zhang Ming: The imbalance of distribution can be assessed by the Gini coefficient at two levels. In the face of the income Gini coefficient, China maintained at 0.46-0.47, and the degree of income imbalance in the world is high, which is why common prosperity is talked about again. At present, the income of Chinese residents is mainly based on personal income tax, and there is a lack of progressive property tax.

From the perspective of income, China's uneven income distribution comes from the gap between urban and rural areas and regions to a considerable extent, and the core of alleviating the gap between urban and rural areas is to change the household registration system, realize the equalization of public services, accelerate the circulation of rural land, turn rural resources into assets, and confirm the rights of farmers' assets. In terms of regional disparities, the current pattern of differences between the east and the west of the country is becoming more and more obvious, and the efficiency of investing resources in the west purely through transfer payments is low, and the most important thing is to further open up the flow of various resource elements, especially the inter-provincial flow of people and property. The free flow of factors may bring about a new round of regional development differentiation, that is, the imbalance of regional development will increase in a period of time, but after the development of the first region, there will be industrial spillover, economic expansion, and the government's targeted transfer payment policy. These mechanisms will drive the development of backward areas.

Nandu: How to narrow the gap between urban and rural areas and regions from financial and capital means?

Zhang Ming: In the traditional sense, everyone regards the financial industry as a system that creates a gap, and the financial industry often "hates the poor and loves the rich", so if we want to rely on the financial industry to narrow the gap, the most important thing is to promote inclusive finance. We can start from four aspects: the implementation of structural monetary policy and credit policy, for the past difficult to obtain traditional credit resources of small and micro enterprises, to provide them with loans; the development of green finance, such as the establishment of carbon sink trading platform, "west carbon to the east", and some high-polluting enterprises can issue green bonds for technological transformation, low bond interest rates, both energy saving and emission reduction, but also allow enterprises to transform at a lower cost. In addition, it is also necessary to develop digital finance, compared with traditional finance, the combination of "digital finance + inclusive finance" has the significant advantages of reducing the threshold of financial transactions, promoting information circulation and price discovery, and opening up the "last mile" of financial services, and the long-tail market it covers includes a large number of low-income groups excluded from the formal financial system, improving the return on assets and liquidity of the latter.

Finally, it is necessary to actively develop ESG theme funds. ESG funds mainly measure whether listed companies have a sense of social responsibility and whether they have sustainable development potential. In the process of China's economy moving toward high-quality development, more attention will be paid to fairness and more emphasis will be placed on three distributions. Listed companies that are willing to assume more social responsibilities will be trusted by more institutional investors in the capital market, and they are expected to receive more incentives and inclinations at the policy level, which will help open up a virtuous circle of promoting common prosperity.

Nandu: This time, the central government also proposed to "strengthen the regulation and adjustment of high income, and reasonably adjust excessive income", what are the specific implementation paths?

Zhang Ming: First of all, we need to frame the scope of high-income people, which should not be aimed at the working class, and the means of adjustment mainly rely on taxes, one type of tax based on income, the most typical is personal income tax; one type is based on property tax. The individual tax of China's wage-earners itself is not low, up to 45%, but the tax measures for personal property are rare, like entrepreneurs, film and television stars, the tax burden is relatively low, and they have many ways to avoid taxes, which is unreasonable from the perspective of the whole society. In the future, in order to better achieve the balance of income distribution among residents, some property tax policies may be introduced, such as capital gains tax, real estate tax, inheritance tax, etc. This kind of property-based taxation has a progressive nature, that is, the richer the object of collection, the higher the true tax rate, which is an effective income redistribution means adopted by some countries in more parallel, and similar policies may be introduced in China in the future.

In addition, when regulating legal high incomes, it is also necessary to ban illegal income, and in the future, we will severely crack down on illegal income based on rent-seeking and arbitrage. Previously, there were some problems in China's tax supervision, but in recent years, tax collection and management have gradually strengthened, and the implementation will become more and more stringent in the future.

Nandu: You just mentioned that in the long run, property tax, capital gains tax, inheritance tax may be gradually introduced, of which property tax has been piloted, in the process of achieving the goal of common prosperity, what role does real estate play?

Zhang Ming: Real estate is not only a problem of common prosperity, China's real estate industry after about 20 years of development, to the stage of need to adjust, because no country has ever relied so much on real estate in terms of economic growth, which is closely linked to the government's income structure, local development model and the direction of commercial banks' loans, more than 70% of the people's property is concentrated in real estate, once there is a problem, it is a systemic risk. So the current policy tightening for real estate, the industry is also facing a comprehensive reshuffle, the future of China's commercial housing market, I think it may slowly return to normal levels, no longer rapid expansion, is no longer the only wealth-making machine, real estate in big cities will still increase in value, but the rate of return is probably single digits, may be slightly higher than inflation.

However, there is still a lot of room for the development of other types of real estate markets, such as affordable housing including co-ownership housing, public rental housing, and low-cost housing, which need to be parallel to increase the supply of affordable housing, reduce the housing cost of low-income people, narrow the gap, and promote common prosperity.

Nandu: Middle-income groups are of great significance to achieving common prosperity, how to expand the proportion of middle-income groups?

Zhang Ming: Expanding the size of the middle-income class, from a "gourd-shaped" structure to an "olive-shaped" society (two small and large in the middle), which requires more and more members of society to enter the middle-income class through a standardized upward channel, the core is to increase the income of low-income people, promote equal opportunities, focus on improving the human capital of low-income groups, and narrow the gap between human capital between different groups. After the growth of the middle class, the social stability is improved, and it is not excluded that a small number of people continue to go up and become particularly successful people on the "tip of the pyramid", but the proportion is not too high, and the proportion of another low end is reduced.

Nandu: In terms of social mobility, how to open up the upward mobility channel?

Zhang Ming: In various countries, the social class transition is mainly achieved through education, and at present, china's middle- and low-income families face some obstacles to the passage of children to achieve class transition through education.

This also means that there are some problems in the current education system, such as excessive emphasis on higher education, insufficient development of vocational education, resulting in structural unemployment of the labor force, ordinary university graduates can not find jobs, blue-collar workers are in short supply, so from the perspective of supply and demand, the state should invest more resources in high-level vocational education, break the discrimination of society on vocational education, and even expand 9 years of compulsory education to 12 years, build a career channel from vocational middle school to vocational college, and then to enterprise employment and subsequent promotion. Help graduates who choose vocational education find a better way out in the future.

It is also important to provide suitable vocational training for current laid-off workers and migrant workers in cities, helping them gain new skills and enhance human capital in this digital age.

In addition to education, upward mobility channels are also hindered by the deformed development of real estate, many cities have higher housing prices, it is difficult for young people to buy houses in cities, and the cost of renting is also high, so it is difficult to gain a long-term foothold in the city, so reducing housing costs is also a path.

Nandu: Under the dual structure of urban and rural areas, public services have not been fully equally enjoyed, how to solve this dilemma?

Zhang Ming: Although some people have left the countryside, they have not really entered the city, have not become an urban household registration population, and cannot enjoy equal services. This first of all is to break the restrictions on household registration, allow more migrant workers to obtain urban hukou, and improve related welfare benefits and income. In cities where it is temporarily impossible to promote the reform of household registration, people with non-local household registration should have the same rights as local residents to enjoy the same series of public services as local residents such as education, medical care, old-age care, housing, etc., reduce worries about the future, and increase income after the city is based. In the end, after the population continues to gather in large and medium-sized cities, it is more the shortage of public service supply, such as public schools are limited and cannot be accommodated, so it is necessary to allow private capital to enter the service industry, which can be developed first and then regulated, and do not beat you to death because of possible problems.

The groups that remain in the countryside have relatively small operating income, and it is necessary to accelerate land circulation on the basis of controllable risks, realize the entry of homestead land into the market, etc., revitalize land resources, give farmers property income, in addition to obtaining cash, they can also mortgage the property rights certificate.

In addition, from the perspective of rural revitalization, we can use the idle farmhouses that are voluntarily circulated to attract a number of new industries and new formats of enterprises such as digital, cultural, e-commerce, and creativity, so that each idle farmhouse becomes a new economic enterprise, and the village becomes a new economic industrial park, and then realize self-hematopoiesis.

Nandu: After the explosion of the digital economy, some ethical problems have gradually emerged, such as the imperfect social security of delivery workers and couriers, and the difficulty of protecting legitimate rights and interests.

Zhang Ming: The takeaway staff, delivery staff, drivers, etc. of large platform companies are a huge group, if there is a lack of certain social security, once an accident occurs, the impact on employees, enterprises, and society is very large, so at this level, the government has issued some policies requiring platform companies to give employees social security. But it is best not to increase the protection in one step, for companies at different stages of development gradually implemented, the large platform has the capital to bear the cost of social security, but some start-up enterprises first need to survive, can not survive in the final analysis is the potential unemployed.

To give play to the role of the "third distribution", the links should be more transparent

Nandu: There are some views that highlight and amplify the role of the "third distribution", how do you think of the "third distribution" itself?

Zhang Ming: The term "third distribution" actually refers to a wealthy individual or enterprise with strength, who provides donations on a voluntary basis to help vulnerable groups, which is the product of economic and social development to a certain extent. Primary distribution depends on the market, mainly reflecting the relationship between the enterprise sector and the resident sector, in the distribution orientation, we must first pay attention to encouraging entrepreneurship and innovation, and make the cake bigger. The government-led characteristics in redistribution are obvious, mainly "dividing the cake".

From the perspective of the mechanism of action, it mainly relies on primary distribution and redistribution, and the third distribution, as a result of moral, public opinion, and social guidance, plays an auxiliary role in further solving the problem of "dividing the cake". However, donations are not entirely public welfare acts, and the government can guide them in terms of policies such as taxation.

Nandu: The relationship between the third assignment and the enterprise is closely related, what do you think about the role positioning of the enterprise in the third assignment?

Zhang Ming: The trend of social development is constantly changing, in the past, pay attention to speed and take into account fairness, now the two go hand in hand, when the wind direction changes, entrepreneurs should follow the trend for long-term strategic development. But the premise is that the enterprise itself can stand firm in the process of competition, enter the process of rising, and cannot do public welfare charity when there is no money or need to expand reproduction for the sake of fame, which is not conducive to the sustainable development of enterprises, and in the case of spare strength, the public welfare and the interests of enterprises are combined. At present, even investment is beginning to talk about social responsibility, and if it can play a residual role in public welfare and charity, it may have additional benefits for corporate investment and financing.

Nandu: What are the experiences or ideas of other countries in the scientific construction and development of the public welfare mechanism?

Zhang Ming: Taking the United States as an example, there is a saying that the secondary distribution in the United States is not good, but the tertiary distribution has played an important role, entrepreneurs make a large number of donations, the United States has long begun to implement the inheritance tax, if the rich people donate their property to charitable funds, they can be exempted from inheritance tax, and the standardized fund operation is relatively safe and reliable, and it has also fallen into a good reputation. In China, the government deducts corporate donations before taxation, which may also guide companies to make public welfare donations.

In addition, at present, public welfare donations are also mixed, ranging from show-style rough donations to fraudulent donations. What people who donate hate most is that the money does not reach the hands of those who really need it, and corruption and corruption occur in the middle. In addition to the fund, the government has set up an independent agency to audit the donations and publicize the whereabouts and uses of the funds, so as to ensure the openness and transparency of the whole chain in the era of big data.

Producer: Nandu Big Data Research Institute Common Prosperity Research Group

Written by: Nandu reporter Ye Lu