Yao Yang: Common prosperity Education comes first
Finance and economics
★★★★★
There is no precedent in human history for common prosperity in a large country of 1.4 billion people. The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China proposed that by 2035, "more obvious and substantial progress will be made in the common prosperity of all people." This is the first time that such a statement has been made in a party plenum document. In the face of the problem of unbalanced and insufficient development in our country and the different foundations and conditions in various regions, how should we explore and promote common prosperity? With this question in mind, the CBN Chief Review program team came to the National Institute of Development Research of Peking University and interviewed Yao Yang, dean.
Q: In the 14th Five-Year Plan and the 2035 Long-Term Goal, it is proposed that by 2035, "the per capita GDP will reach the level of moderately developed countries", how to understand the level of medium-developed countries?
Yao Yang: Medium-developed countries actually don't have a good definition. What is moderately developed? Probably the level of Eastern Europe. Eastern Europe is now basically at more than $20,000. The clearer goal is to double China's per capita GDP by 2035, which means that at current prices, our per capita GDP will reach $20,000, which is basically the current level of middle-income countries. Fifteen years later, the price level would have to rise by at least 2 to 3 percent a year, and that would add 50 percent, so by that time, we would probably be around $30,000.
Q: This is what is affluence from an average point of view, but add a prefix in front of it as "common prosperity". How do you understand the term "common prosperity"?
Yao Yang: When we talk about common prosperity, we must first talk about our current situation. According to the National Bureau of Statistics, our Gini coefficient is about 0.47 to 0.48, which is relatively high. In the era of our planned economy, the income gap was very small, and at that time, the Gini coefficient was only about 0.27, which was very low. Engaging in a market economy will itself bring about some income distribution gaps. There is also an amplification mechanism in the market economy, and we know that the rate of return on capital is higher than the rate of economic growth, which is basically the case in all countries. The rate of return on capital is higher than the rate of economic growth, so the income of the owner of capital as a percentage of GDP will rise, which is the core theory of Piketty's Capital in the 21st Century.
In fact, as Marx said at the time, the market economy itself will bring some income inequality. On the one hand, the market can allocate resources very efficiently, on the other hand, its results are not necessarily in line with everyone's preferences and expectations. We are a socialist country, but we are also a country engaged in market economy, and through the practice of the planned economy for more than 30 years, we have found that it is impossible to engage in the planned economy, and you must mobilize people's enthusiasm. I don't want to use the word "injustice" because "fairness" has a special meaning. Since you are engaged in a market economy and believe in a market economy, you must believe that the distribution of the market is fair, but its results are uneven. "Inequality" does not equal "injustice". We now sometimes discuss this issue, when we talk about income distribution, we say that income distribution is unfair, which is excessive, and it should be said that income distribution is unequal.
"Some regions and some people can get rich first, and drive and help other people in other regions and others to gradually achieve common prosperity." This is a passage that Deng Xiaoping said when he met with a delegation of American entrepreneurs in 1985. From 1985 to 2020, China's total economic output increased by 112 times. In 2020, GDP exceeded 100 trillion yuan for the first time, and per capita GDP also reached 10,000 US dollars. The "money bag" is more drummed, and the "family bottom" is thicker, laying a more solid material foundation for promoting common prosperity. The tenth meeting of the Central Financial and Economic Commission proposed to expand the proportion of middle-income groups, increase the income of low-income groups, rationally adjust high incomes, and ban illegal incomes.
Q: How do you define what is "high income", what is "middle income" and what is "low income"?
Yao Yang: This is a relative question, what is the middle class in Beijing? I think if you ask a Beijing citizen, he will probably give you an example. First of all, you have to have your own home, and the house can't be too small. Second, you may have your own car. There is a house and a car, I think this is the most basic, your family annual income should probably be more than 200,000. If you go to Guiyang, you may still have to have a house and a car, but the annual family income may reach 150,000 or 100,000 to feel that it is already middle class. I think cities and regions are different. The average person will think that the annual household income in a place like Beijing is probably more than seven or eight hundred thousand to call the high-income class, but you have to look at the national data, 10% of the highest income group, is 10% of the lowest income group income of 83 times, in fact, the country's 10% of the highest income group of the average family income is 210,000 yuan a year, the overall income of China is still relatively low. Of course, 10% of China's population is 140 million people, which is a large number, basically the total number of some large countries in the world.
The lowest 10% of the population is also 140 million people, of which nearly 100 million people have finally lifted themselves out of poverty this year after eight years of continuous struggle. Today, my country has eliminated absolute poverty and regional overall poverty. The way to govern the country, the beginning of enriching the people, how to say goodbye to the poor people on the road to common prosperity?
Q: China has won the battle against poverty, but how to achieve this in the follow-up is to continue to raise the income of the lowest part of the population?
Yao Yang: I think the most important thing is to improve the income capacity of ordinary people, especially the bottom 5% of the people. We Chinese there is a saying, "It is better to teach people to fish than to teach people to fish." "The people have the ability to earn, they create their own income, and this is sustainable." Education is the first, and once the China Economic 50 Forum was held, I would like to talk about education. I showed them a picture of a physical education teacher playing basketball with the children of my elementary school alma mater, in the countryside of Jiangxi. The key thing I want to tell you is that this physical education teacher also teaches math. We used to say," "Your math is taught by a physical education teacher," and that's what it is. It is unfair to concentrate educational resources in large cities and to "super secondary schools". Wouldn't it be possible for those children in the countryside to have Einstein? We should believe that the IQ of Chinese is relatively evenly distributed.
Q: To raise the income level of low-income groups, it is very important to strengthen education, especially the younger generation, and create a relatively fair environment for everyone from the starting line. So how do you regulate high incomes, especially excessive incomes?
Yao Yang: High-income groups, we generally understand as film actors and entrepreneurs. Many film actors take too high a salary, of course, it is very abnormal, but more still need industry self-discipline. I've talked to people who make movies, investors, and they think it's not sustainable. Entrepreneurs are another matter, we see successful entrepreneurs, we don't see failed entrepreneurs. I have seen some failed entrepreneurs, really lose even pants, really become "losers", and their families are broken. I'm not kidding. Starting a business is a huge risk. If successful entrepreneurs don't take the risk in return, then no one invests. Back more than 20 years ago, the number of people who started a business was uncountable, and I almost went to start a business. Someone pulled me along, let's also make a ".com" (website), if I go, I guess I will become one of the losers. So the whole society, this group must have such a high return, because its probability of success is 1/2900, and everyone does not see the 2899 people who fail, which is a trap of cognition: "Only see success, not see failure." The so-called adjustment, paying 25% of the enterprise income tax is not enough, and then paying 45% of the personal income tax, this adjustment is enough.
"Income distribution" is an important basic institutional arrangement, and the expression "increasing the proportion of labor remuneration in primary distribution" has been repeatedly emphasized in many important documents such as the Opinions of the CPC Central Committee and the State Council on Accelerating the Improvement of the Socialist Market Economic System in the New Era, the 14th Five-Year Plan for the Development of Human Resources and Social Security, and the 14th Five-Year Plan for Employment Promotion. In 2019, China's labor remuneration accounted for 52.1% of GDP, and the development goal for this is to "steadily increase" by 2025.
Q: The income of workers is our income for workers and its cost to enterprises, can the relationship between the interests of the two be harmonious and harmonious?
Yao Yang: In fact, the proportion of workers' income to GDP is an area that economists specialize in.
Before 2008, China's share of labor income was declining, and a very important reason was industrialization. In agriculture, the proportion of income of laborers is higher. Engaged in agriculture, the land is not very valuable, the machinery is used less, and the proportion of labor income is relatively high. The proportion of labor income in the service industry is also relatively high, for example, haircuts are basically all workers' income, and programming is all labor income. But industry is different, industry is a capital-intensive industry, so in the process of industrialization, many people go to industry to find employment, and the proportion of labor income naturally comes down. This is the biggest reason for the decline in the proportion of labor income.
Since 2008, the share of workers' incomes has been rising. Therefore, don't always say that the proportion of our workers' income is declining, that is the "old yellow calendar". The proportion of our workers' income has risen for more than ten years, and it is in the past two years that it has begun to fluctuate slightly, and I think the fluctuations are related to the epidemic. Overall, the proportion of workers' income and remuneration has begun to rise. In the past few years, there have been many takeaway brothers, takeaway is a service industry, why are they willing to do takeaway brothers, not to work on the assembly line? The assembly line earns less and does a good job of three or four thousand yuan, but the takeaway brother can earn eight thousand yuan or even ten thousand yuan if he does a good job. The marginal contribution of the service industry labor force is high, just imagine that the takeaway can not be done without the courier brother, so his asking price has increased, which is the market behavior.
The change in the proportion of labor income in our country is actually largely affected by the entire stage of development. In the next step, we must increase the proportion of labor income, how to increase it? Quite simply, it is to encourage the development of industries with a high proportion of labor, such as high value-added services, which is the most important. At present, the "code farmer" who writes the program belongs to the high-level labor-intensive industry, and the main expenditure of the corresponding enterprise is the salary of the programmer, and the rent of several million a year is a small head compared with the wage expenditure of tens of millions. In short, to improve the income ability of ordinary people, the income ability has gone up, and the proportion of his labor income has also gone up.
Q: Where is the potential for revenue growth in areas that are relatively lagging behind?
Yao Yang: The regional gap is not so important, and the people will choose in the end. Give the right to choose to ordinary people, there may be some people to Hegang to buy a house, get a Hegang hukou, feel that life in Hegang is very good, have a home, do some business online, now a lot of work can be done online, a month income of 3,000 yuan, "I am comfortable", it is also very good. Therefore, this regional gap should not be considered as a big problem, but should be considered as a gap between urban and rural areas, which is inseparable from the deep-rooted elitism of the Chinese.
I once gave a lecture saying that we should open up the city and let everyone make a choice, and a girl immediately stood up and raised her hand and said, "Professor Yao, you are not right to say this, this city is very crowded, what should so many people do?" "When I say the land of the People's Republic of China, are people divided into three, six, nine, and so on? I was very disappointed by this deep-rooted "I'm going to stand when I'm here, don't come." Many people say that farmers come to the city, who cultivates the land? Why should you cultivate land when you are born in the countryside? I was excited when I said this, and I imagined the relatives in the village, and they all wanted to go into the city. Including the "elite thinking" I just said, the arrogance of the successful, they think it will be very deserved, "super middle school" is not very should not be? Some people say in a grandiose voice that students must also have choices, and which school they are willing to go to should have different schools. I think that there should be no selection at the secondary school level, before college, there should be the same, even education for all children, it is one thing for him to learn or not, it is another thing to give others a chance.
Q: When we propose common prosperity, is we dealing with the relationship between efficiency and fairness?
Yao Yang: I am willing to use equality and efficiency, which are actually not in conflict. The reforms we made in the early days of reform and opening up were actually increasing equality. When we engage in a market economy, we give opportunities to society and to all the people, and doesn't this promote equality? Of course, it promotes equality. Therefore, we can't say that the past few years have been patronizing efficiency, in fact, equality is the starting point, without the equality of this starting point, where do we have efficiency? Today, we say that we want to enhance the income capacity of the people, and there is no conflict between equality and efficiency. A rural child who does not have a good education will not become a Nobel Laureate, and if they have a good education in the first place, he may become a great mathematician and become efficient. The opportunity to make the most of your personal abilities, so that equality is achieved and efficiency is also higher.
[Yao Yang: Member of the Chang'an Avenue Reading Club, Dean of the National Development Research Institute of Peking University]
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Editor-in-charge: Ma Jiajun; Preliminary Review: Cheng Ziqian; Review: Li Yufan