——Feelings after reading the book "Sharing Mechanism"
Text | Zhao Chunling
Source|"State-owned Enterprises" magazine, July 2023 issue
The way to govern the country begins with enriching the people. Since the 18th National Congress of the Communist Party of China, the Party Central Committee with Comrade Xi Jinping as the core has placed the gradual realization of common prosperity of all the people in a more important position, and made a comprehensive drawing and systematic design for common prosperity.
Common prosperity is a major problem in the development of human society. So far, in the process of modernization in the world, no country has perfectly solved this problem. In China, with the all-round victory in poverty alleviation, common prosperity, as an important value pursuit of our party's original mission, has been embedded in the goal of modernizing and strengthening the country, and has become the central topic of the theory and practice of socialism with Chinese characteristics.
Song Zhiping, President of the China Association of Listed Companies and President of the China Enterprise Reform and Development Research Association, recently published the book "Sharing Mechanism", which interprets and thinks about how to promote common prosperity, and gives a path to achieve it at the micro level, which is quite enlightening.
Sharing Concept: Cracking the "Golden Key" of Wealth Gap
The concept of sharing was first proposed at the national level back to the new development concept of "innovation, coordination, green, openness and sharing" put forward by the Fifth Plenary Session of the 18th Central Committee in 2015. General Secretary Xi Jinping pointed out that the essence of the sharing concept is to adhere to the people-centered development thinking, which reflects the requirements of gradually realizing common prosperity.
It can be seen that the concept of sharing is an important "grasp" to promote common prosperity. Promoting the sharing of the fruits of modernization by all the people has become a key issue in China's modernization process.
In March 2021, the state released the 14th Five-Year Plan and the 2035 Long-Range Goals Outline, and the term "common prosperity" was mentioned many times, demonstrating the central government's firm determination and great attention. In August of the same year, the Central Financial and Economic Commission studied issues such as solidly promoting common prosperity. General Secretary Xi Jinping solemnly declared at the meeting: "Now, we have reached the historical stage of solidly promoting common prosperity. ”
To achieve common prosperity, we must proceed from the basic national conditions of the mainland. Over the past 40 years of reform and opening up, the mainland has adopted the orientation of "giving priority to efficiency and taking into account fairness", and while making the cake bigger, the gap between the rich and the poor has further widened. On the one hand, the average income of Chinese is less than one-fifth of that of the United States, and the high-income group is almost the same as that of the United States. This is mainly because capital and the capitalist class behind it occupy a dominant position in the distribution of national income and obtain ultra-high income. This ultra-high income is obtained at the expense of the rest of society. On the other hand, the proportion of domestic household income in GDP is not high, and the growth rate of income is far from keeping up with GDP growth. In the income of residents, the remuneration of workers accounts for more than 80%. It can be seen that raising the level of workers' remuneration is an important way to improve the distribution of national income and achieve common prosperity.
To this end, the report of the 18th National Congress of the Communist Party of China proposed to "strive to achieve the synchronization of the growth of residents' income and economic development, and the growth of labor remuneration and the improvement of labor productivity." The report of the 20th National Congress of the Communist Party of China also emphasized that "the distribution system is the basic system for promoting common prosperity".
The successive introduction of these macro policies shows that China is transforming the underlying logic of economic development from prioritizing growth to taking into account fairness.
To promote common prosperity, we must take the interests of the majority as the foundation, and take workers and scientific and technological workers as the main groups to increase income. As the main source of creating material wealth and the micro-subject of social fairness and justice, enterprises undoubtedly shoulder greater responsibilities and missions.
In fact, many foreign companies have realized this. In 2019, CEOs of nearly 200 major U.S. companies held a "Business Roundtable" and jointly signed the Declaration of Corporate Purpose, which rejected the principle that "the sole purpose of a business is to maximize the value of shareholders" and clearly stated that "enterprises should take into account the interests of all stakeholders, including customers, employees, suppliers, and the communities in which the company operates, in addition to shareholders."
The book "Sharing Mechanism" writes: One-sided emphasis on shareholder supremacy will only make the development of enterprises short-term, make enterprises lose social foundation and employee support, and lose their internal vitality. "Businesses should be a shared platform for workers, owners and other stakeholders."
This is a new idea provided by the concept of sharing at the micro level to solve the world problem of common prosperity.
Institutional Change: The "Bull's Nose" Driving Common Prosperity
How can enterprises become a sharing platform to promote common prosperity in high-quality development?
Song Zhiping, who has led two state-owned enterprises into the ranks of the Fortune Global 500, believes that the key lies in mechanism.
Song Zhiping has been deeply engaged in enterprises for 40 years and describes himself as "a mechanismalist." Because he has found in years of management practice that enterprises with good development momentum often have a set of scientific and effective mechanisms internally.
Promoting common prosperity with the concept of shared development boils down to two aspects: first, fully mobilize the enthusiasm, initiative and creativity of the people, liberate and develop productive forces to the greatest extent, and continuously expand the "cake" of wealth; The second is to divide the "cake" that is constantly getting bigger, rationally distribute social wealth, and let the people have a greater sense of gain.
Obviously, these two aspects are inseparable from advanced and effective mechanisms.
What is the mechanism? In 2014, Song Zhiping, then chairman of China National Building Materials Group, defined the concept of mechanism when summarizing the experience of the mixed reform pilot. He said: "The so-called mechanism is the positive correlation between the benefits of enterprises and the interests of operators, technical backbones and employees. ”
In his view, "capital + operators + laborers" is the basis of the enterprise mechanism. "In the past, we used to think that enterprises are owners, and capital is only in physical form, that is, cash, plant, land, machinery, etc. Now, we need to treat the people in the enterprise as human capital, so that the owners, operators and workers of the enterprise can share the wealth of the enterprise. ”
The core of the sharing mechanism is to recognize the value of human capital, and at the same time change the existing distribution rules, let human capital participate in distribution, and share the wealth created by enterprises. This is undoubtedly an ideological revolution.
The specific approach is to enable the majority of employees not only to enjoy salaries and bonuses, but also to share the wealth created by enterprises like financial capital, so that enterprises can become a platform for common prosperity through equity incentives, job dividends, employee stock ownership, excess profit sharing and co-investment.
On this sharing platform, employees enter the middle class with their labor to achieve equal prosperity and common prosperity in the society - this is the embodiment of the development achievements of jointly building and sharing Chinese-style modernization at the enterprise level, which is not only in line with our common ideals, but also has a stronger impetus for the development of enterprises.
Of course, the sharing mechanism is not egalitarianism, let alone a "big pot of rice". It requires enterprises to find a reasonable balance between efficiency and fairness, competition and mutual assistance to achieve a win-win situation for stakeholders.
In foreign countries, sharing wealth with employees has long been a common practice for enterprises. Taking employee shareholding as an example, the employee shareholding rate of French industrial sector enterprises exceeds 50%, the vast majority of listed companies in Japan have implemented employee shareholding, and in Singapore, Spain and other countries, employee shareholding is also very popular.
In China, many companies have also become pioneers in building sharing platforms. The book "Sharing Mechanism" selects 12 enterprise cases, including the case of the company to which Song Zhiping belonged when he worked in China Building Materials, and more of the excellent enterprise practices he visited or observed. These cases cover different forms of ownership such as state-owned enterprises, private enterprises, and mixed-ownership enterprises, as well as different fields and formats such as traditional manufacturing, service industries, high-tech industries, and scientific research institutes.
The book discusses in depth the mechanisms of employee stock ownership, excess profit sharing, technology dividends, and project co-investment. For example, Wanhua's employee shareholding and technology dividends, Huawei's "wealth scattered people" mechanism, Xi'an Optics Institute's "talent + technology + service + capital" "Xiguang model", Xiaomi's "flexible salary system", Vanke's business partner system, etc.
Practice has proved that Chinese enterprises are fully capable of creating a new type of enterprise system that is compatible with China's modernization goals and promotes common prosperity.
Enterprises have become a shared platform, which is also quite enlightening for the next direction of SOE reform.
SOE reform focuses on three things: system, system, and mechanism. Structural reform should properly handle the relationship between the state-owned economy, state-owned capital, and state-owned enterprises, institutional reform should properly handle the relationship between owners and operators, decision-makers and executors, and institutional reform should properly handle the relationship between enterprise efficiency and the interests of business operators and laborers. At present, state-owned enterprises have relatively clear methods for structural and institutional reform, but they still need to make further efforts in institutional reform.
Song Zhiping believes that many private enterprises, especially high-tech enterprises, have participated in the allocation of human capital and given many futures stocks and options to key employees. However, some state-owned enterprises have not done enough in terms of mechanism, which has led to two problems: first, excellent scientific and technological personnel and management talents are easy to lose, and second, the ability to innovate is not strong. These must be made through the mechanism. The breakthrough point is to promote a sharing mechanism in the enterprise and establish a dynamic internal mechanism through reasonable distribution means.
This is the last door to open the reform of state-owned enterprises, and it is also an inevitable choice to highlight the superiority of the socialist system and enhance the happiness of employees.
As the old saying goes, "Suffer from inequality without suffering from the few." Over the decades, the widening income distribution gap and rising inequality have brought a series of negative effects on a global scale. In recent years, popular trends among young people in China, such as "lying flat theory" and "Buddhist youth", also mean that some groups are dissatisfied with the difficulty of increasing their income and the increasing solidification of class. It can be seen that based on the sharing mechanism, building a distribution system conducive to common prosperity fully stimulates the creative power hidden in the people, which is beneficial to the country, enterprises and individuals.
In this sense, the book "Sharing Mechanism" provides a Chinese solution for mankind's exploration of a better social system. At a time when China's modernization is speeding up in an all-round way, the publication of "Sharing Mechanism" can be described as timely.
(The author is the executive editor-in-chief of "State-owned Enterprise" magazine)
Editor丨Leaf