The economic situation of any country is never just a question of the economy itself, but a question related to the worldview and methodology of the country's academics and politicians, and to how to deal with the ruling forces of the regime and their leaders. Moreover, the current situation of China's economy has surpassed all the economic situations faced by the People's Republic of China since its founding, and it is urgent for us to look at it from a more in-depth, longer-term, and more fundamental viewpoint.
1. How important is the economy?
Since the beginning of reform and opening up, the party's work has long centered on economic construction. Economic work is important, but in the final analysis, the economy is a means, not an end. What is the purpose? The purpose is to meet the needs of the people. So, is the economy developing and the people's needs satisfied? No, no. If the economy develops, but the fruits of economic development are taken away by a small number of people, the needs of the broad masses of the people cannot be satisfied. Originally, if everyone was poor, the people would not be much dissatisfied. Therefore, Mencius said, "Do not suffer from few, but suffer from inequality." When the country was poor, some people in the coastal areas fled and felt that they could make a good living abroad. Although they have gone overseas and overseas, they may not have a good life. No matter how young they are, after developing in China, they will find that it may be better to be in their own country, because after they go to a foreign country, it is impossible to expect to get rid of their second-class citizenship for at least a hundred years. Originally, China would have developed its economy in an equal manner (i.e., mainly in public-owned enterprises) and would not have been in a state of poverty for a long time. Although China was relatively poor in 1978, it had already made great achievements in economic development and laid a good foundation for future development, whether equal or unequal. And if China adopts an unequal path of development, and China does take such a path of economic development, then the broad masses of the people will inevitably aspire to a better life when a small number of people in the country become rich and thus become poor and extravagant. However, in a state of polarization, the aspirations of the broad masses of the people for a better life are unattainable. Ordinary people will find that no matter how hard they try, they will not be able to live the kind of life that rich people live. In this way, the broad masses of the people will inevitably develop a rebellious mentality. Therefore, focusing solely on economic construction is highly reasonable only when China's income distribution is still very even (Chairman Mao Zedong left such a state of social distribution). After economic development and income distribution becomes irrational or even very irrational, the status of economic construction as the center will inevitably decline, which is why Deng Xiaoping foresaw that at the end of the 20 th century, it is necessary to give prominence to solving the problem of common prosperity, that is, the problem of fair distribution of wealth. However, instead of solving the problem of distribution, the gap between the rich and the poor has become more and more serious. Under such circumstances, China must fight corruption, reshape China's economic development model, and make China's economic development model friendly to the broad masses of people, that is, it must implement the "people-centered" development concept mentioned by General Secretary Xi Jinping. This is the way to ensure China's long-term peace and stability, and it is also the way to achieve sustained economic development.
While it is natural to fight corruption and reshape the economic development model, when China has implemented such a development model for more than 30 years, resulting in huge inequality in China's economy, it will form an extremely deep-rooted and intertwined pattern of interests. This makes it very difficult to implement China's anti-corruption and reshaping economic development model, and the resistance is unprecedentedly huge. Looking back now, if China had implemented a policy that paid more attention to the development of the economy under the ownership of the whole people and the development of the collective economy after the reform and opening up, rather than selling off a large number of state-owned enterprises (at low prices) to private enterprises to give way to the market, it would have avoided bearing such a large cost of anti-corruption, and would not have distorted the economic development model and faced the task of reshaping it.
Here, there is another question, that is, does taking economic construction as the central task reflect the urgent mentality of our country's policymakers in economic development? Of course, we must be anxious, and we must have a sense of urgency to seize the day, but we must not be too hasty, we must not be unscrupulous in our ends, we must not be unscrupulous in our means, and we must not think that GDP growth is economic development. Only when a lot of time is spent on research and research can a reliable decision be made, otherwise, we may rush to the doctor in a hurry, and we may get twice the result with half the effort, or even go the other way. If such situations accumulate too much, there will be a danger of subversion. In view of such a possibility, it is very important to maintain sufficient strategic concentration and let the wind blow the waves, which is better than a leisurely stroll. Politics is the concentrated expression of economic interests. Lenin said, "Politics cannot but take precedence over economics." To not affirm this is to forget the most basic common sense of Marxism. "For the problem lies only (and can only be found from the point of view of Marxism) that a class cannot maintain its rule and therefore fulfil its productive tasks if it does not look at the problem correctly from a political point of view. "We must never forget this point, and we must not be confused.
2. A dialectical view of the current economic situation facing China
Although the current economic situation facing China may seem grim, in fact, they comprehensively reflect the historic achievements of China's economic development. It is precisely because of these historic achievements that China's economic situation has become more severe.
First, on the whole, China's investment growth is slowing down and there are not enough investment opportunities, which is a reflection of the great results of China's past investment. The Chinese are very smart and hardworking. In the 1980s, China's development was constrained by capital, technology, and talent. China has adopted the method of attracting investment from the international mainstream and accepted by the West, solved the problem of financing for development, and has also obtained some technology and attracted some talents, but I am afraid that the most important thing is not these, but in this process, China's technology in the field of people's livelihood has begun to develop in an all-round way, and business talents have also been greatly cultivated. In the process of sweeping the sands in this great wave, China has not only produced a large number of very business-minded private businessmen, but also produced a large number of outstanding leaders of state-owned enterprises. As a result, China's productive forces have developed in an all-round way, and it took about 50-70 years to reach the forefront of the world's technology in many fields, forming the world's most complete industrial system. The material conditions (such as housing and infrastructure) that Chinese enjoy and can enjoy are no longer inferior to those of Western developed countries, and various daily necessities are dazzling in the market. Originally, I was worried that I couldn't produce it, but now I'm worried that it can't be produced, and I can't sell it. That is to say, now, in a certain sense, the problem of not being able to sell is a problem that will inevitably arise after development, and it is a problem that will inevitably arise after development with the development model of the past. When there are so many products that they cannot be sold, and new products that can support the development of new industries have not yet emerged, China's investment growth will slow down and investment opportunities will be insufficient. Imagine that even if China has relied on enterprises owned by the whole people and collectives for more than 40 years to develop, the slowdown in investment growth and the lack of investment opportunities in a certain period of time will inevitably be encountered, but it may be delayed by 10 or 20 years. With this inevitability, we know that China's policy focus today should not be on the pursuit of investment growth as it did in the past. The speed of investment can be allowed to slow down, the growth rate of investment will slow down, and the people can live a better life without "996". Therefore, if we do not think that economic development is an end in itself, as long as we support people's livelihood and let people have food when investment declines (e.g., a monthly living allowance of 2,000 yuan is given to newly graduated college students and graduate students who have not found a suitable job, have no source of income, and have average family conditions or below, such as ensuring that at least one person in each urban family is employed, and building a rural living security network), the decline in investment growth itself does not constitute too much of a problem. There is no need for Keynesian stimulus at all. It is important to solve long-term fundamental problems, including solving the bottleneck of core technological innovation and distribution fairness, so as to create a solid platform for a new round of benign economic development and open up better prospects.
Second, it is not enough to look at the whole picture, but further analysis is needed. The current diagnosis of China's economic development also seems to have largely ignored the ideas put forward by Lenin in On Imperialism. Engels had long noticed that the development of capitalism in Europe was moving towards monopoly, and Lenin gave full play to Engels' monopoly theory in On Imperialism. So, is there a monopoly problem in China? Of course there is. After more than 40 years of reform and opening up, with the wisdom of the Chinese, the uniqueness of China's development and the resulting rapidity, China has more or less formed a monopoly in many industries and the monopoly is still developing. The central government has introduced anti-monopoly and anti-disorderly capital expansion policies, and many Chinese scholars have published many research articles on monopolies, including platform monopolies. What does monopoly mean? Whether it is a monopoly in the sense of Lenin, or a monopoly in the sense of Joan Robinson or Chamberlain, it means that it is difficult for other people to enter an industry. When it becomes difficult for people to enter an industry, the growth rate of new investment will inevitably decline. What's more, those who are on the investment margin (with a certain investment ability) have made various investments, such as equity investment, financial investment, and corporate investment, and found that they have fallen into one trap after another, and then people will inevitably be more vigilant about investment. Lenin's "On Imperialism" also pointed out that even if a cartel is formed, it may collapse in an instant in the face of the general economic trend. Therefore, even the investment of monopoly capital is no longer insured. In this context, China's business environment has changed radically. This change does not mean that the institutional environment and policy environment of China's economy are not good, but that China's market economy is becoming more mature and moving towards monopoly, and investment opportunities like the original ones tend to be exhausted. Under such circumstances, China's efforts to improve the business environment by increasing the ease of setting up new businesses will no longer make much sense to stabilize the economy. No matter how much China tries to "break through" the "traditional theory" of Marxism, as some people advocate, it will not be of much significance to stabilizing confidence in the private economy. Because even the most advanced capitalist countries cannot give confidence to the capitalists in the face of the level of economic maturity that the economy reaches every ten years. Does China want to become a capitalist country in order to reassure capital? Just as the Soviet Union became a capitalist country and did not reassure the West, China will not be relieved if it becomes a capitalist country, and Western monopoly capital will not be at ease. Capital never sleeps, and capital will never rest assured. Now, is the capital of the United States relieved? Obviously, it is not. Therefore, the Communist Party of China must not excessively pursue policies that reassure capital, and must not turn itself into a "wage earner" or "shopkeeper" of capital. In that case, the party will lose the support of the people. It should be recognized that some capital is its own people, some capital is half-hearted with itself, and some capital is alienated from itself. You can't just think that all capital is your own people. Otherwise, it will fundamentally violate the law of the unity of opposites, and it will fundamentally violate seeking truth from facts, and it will be coerced by capital. Seeking truth from facts is easier said than done, so it is like Chairman Mao to learn from Xi. We must dare to face challenges and make revolutions. If we dare not make a revolution or self-revolution, we will not be able to seek truth from facts.
Third, we need to look at the internal and external connections. Reform and opening up have established close political and economic ties between China and the developed countries of the West. This kind of connection once provided China with a relatively relaxed international environment and promoted China's development, but it also forced and induced China to pay a considerable price and brought huge risks to China. Looking at it now, the US pressure on China may continue for a few more years, or even more than a decade. In the coming years, the United States is likely to do whatever it takes to put pressure on China. As an external factor, the economic power that the United States can use is to use interest rates to manipulate the inflow and outflow of international capital in China, and to use legal, diplomatic, and capital means to influence the flow of goods and personnel between China and other countries, as well as the situation of Chinese enterprises abroad, all of which will have an impact on China's economy. But because the United States cannot command all foreign countries, and China's response, these are not enough to cause fundamental damage to China's economy. The only way the United States can inflict fundamental damage on China is by exploiting China's insiders and internal contradictions. Now, some Chinese who know China well live overseas and could be exploited by American politicians. There are also a group of people living in China who have direct and indirect ties with American politicians in one way or another. Some people may be extremely good at camouflage, but they have not yet been recognized, and they still play an important role in China's theoretical circles, public opinion and even decision-making fields, hindering China's self-revolution. If such a person steals an important position, it will bring immeasurable damage to the mainland. We should attach great importance to this point. From this point of view, the solution of economic problems is by no means merely an economic measure, but requires looking at the problem from a political perspective. In particular, due to the development of education and scientific research in China, some people have subverted the socialist system under the banner of academic discussion, which seems to be very logical, very deeply hidden, and very tempting.
Fourth, judging from the future development trend, as the mainland's technological level reaches the forefront of the world, the mainland's production automation will become higher and higher, and a large number of labor will be replaced, which will inevitably lead to insufficient domestic demand. Since we are not yet seeing the emergence of new technologies that will give rise to entirely new industries, it is very likely that the total demand for labor in the entire Chinese economy will decline in the coming period, in a decade to twenty years, as technology advances. This will create a situation in which the traditional model of earning income (distribution according to work) by working in factories and other enterprises and institutions and then purchasing the necessities of life from the market is becoming more and more difficult to operate. But China needs to maintain a certain population size, and without a certain population size, China will not be able to exert the influence it deserves. This requires China to gradually establish a certain social system of distribution according to needs. Allocation on demand needs to be matched by low prices, so China also needs to do its best to reduce the cost of housing, education, and health care. It can be said that the housing supply on the mainland has been basically solved or is close to being basically solved. There is still a lot of room for education and health care. In the field of education, it is necessary to break the monopoly on real knowledge and enable the people to acquire truly useful knowledge. This can be solved by relying on some information technology means. In the field of medical treatment, it is necessary to vigorously develop traditional Chinese medicine and traditional Chinese medicine, so that medical costs can be reduced and medical results can be improved. At present, in hospitals at all levels in the mainland, the contradiction between traditional Chinese medicine and Western medicine is quite prominent. Doctors are generally willing to give Western medical solutions, but Western medical solutions are not really effective solutions in many cases (e.g. for the treatment of hypertension, diabetes, cancer, etc.).
It should be pointed out that even with the technological progress of China, although new enterprises will continue to be created, it will also lead to the development of monopolies, which will continue to destroy a large number of incumbents and cause many enterprises to go bankrupt. As a result, many people who used to get rich first may have a hard time or even fall back into the ordinary state of life. This is precisely the result of the development of the market economy, and we cannot blame the public ownership system, still less can we solve the problem by attacking the state-owned economy.
Fifth, we must take a correct view of deflation. Now, within China, many scholars believe that China is facing deflation. Some scholars look at China's deflation with the experience of the past and the West, arguing that deflation is bad. In fact, in the twenties of the twentieth century, the Soviet Union spent about five years on the initiative of the government to systematically adopt a policy of deflation. The deflation that China is facing today (lower prices for automobiles, lower prices for housing, and lower price indices) is not the result of the government's initiative, but rather the result of declining economic development and aggregate demand growth. In the long run, the leading factor in economic development should be the reduction of product production costs due to the development of productive forces. When the costs and prices of many basic industries are reduced, the prices of products in all walks of life in China will inevitably decrease. We have seen a decline in the farmers' affection for the land, which means that the economic value of the land has decreased. This also happens in the cities, when people start to tighten their purse strings, and the social demand for many products decreases. At the same time, China's foreign demand is insufficient, and after more domestic demand, product prices will be reduced. The reduction of product prices is a good thing, it can relieve the pressure of people who are more difficult to live, can prompt enterprises to spend more energy on product innovation, rather than on blind extensive output growth, and also helps to achieve the survival of the fittest. We are not advocating social Darwinism here. There are too many enterprises in our country, and this is probably not a stable state. Therefore, there must be a process of survival of the fittest in an enterprise. We expect that with the development of artificial intelligence and various automation technologies, the production cost of the mainland will be further reduced. Therefore, if the mainland's money supply grows adaptively (not excessively), the continent will be long-term and irresistible in the face of deflation. This is conducive to China's on-demand distribution.
It should be noted that there is a basis for the mainland to implement a certain amount of distribution according to demand. In fact, countries around the world have begun to pay attention to ensuring the basic needs of their people. The social security systems established by European countries are an example of need-based distribution. Transfer payments are also a form of on-demand distribution. Distribution according to demand is not about getting what people want, but about continuously improving people's living standards on the basis of ensuring people's basic needs and avoiding the threat of hunger and cold. This need-based allocation will provide opportunities for the free and full development of the human being. It also implies a fundamental transformation of the traditional employment system. When the prices of various economic goods are reduced and the supply is abundant, people do not waste it. The issuance of digital currencies will also facilitate on-demand allocation.
The trend of deflation requires us to change the speed of the money supply. In 2022, new RMB loans nationwide reached 213096 billion yuan, an increase of 1,363.4 billion yuan year-on-year. Among them, short-term loans were 4.11 trillion yuan, an increase of 1.3232 billion yuan year-on-year, medium- and long-term loans were 13.81 trillion yuan, a year-on-year decrease of 1.5 trillion yuan, and bill financing was 2.96 trillion yuan, an increase of 1.46 trillion yuan year-on-year. This shows that the money supply of the People's Bank of China is still operating according to traditional thinking, and it still lacks the guidance of Marxist political economy. Some studies believe that the additional money issued is deposited in banks to a large extent, and it is difficult to lend out. Due to the saturation of production in China, the overcapacity, this is not a short-term problem, but a long-term problem. The decline in the value of Chinese products requires a slower rate of supply of the renminbi. And this requires the PBOC to change its monetary philosophy.
If it does not slow down the growth rate of the currency, it could mean an increase in the prices of some of China's assets. Because when a large amount of RMB is not needed in the production field, the RMB will be transferred to the asset operation field, which will push up the price of the asset. When real estate loses its function of maintaining and appreciating value, the asset with the function of maintaining and appreciating value may be stocks. But speculation in stock prices has the potential to cause a financial crisis. In order to prevent such a crisis, it is necessary to control the price of stocks. Now, there are a variety of mechanisms in China to control the price of stocks. However, under the condition that the stock market is allowed to exist, the fundamental strategy for controlling stock prices is to reduce the money supply so that the money supply is only compatible with the development of the real economy. Perhaps, today we need to reassess the rationale for building a complex stock market. The U.S. bond market is much larger than the stock market. China's stock market is much larger than the bond market. The further question is, is it necessary to develop a large-scale bond market if China limits the size of its stock market? China's construction of a financial power should be mainly reflected in the fact that finance serves the real economy, and must not form a parasitic situation in which the financial sector sits on the throne. Of course, allowing some financial forces to participate in international financial markets may also be beneficial.
The demand for the renminbi is rising in the rest of the world. However, if foreign countries are not shorting China's financial market and asset market, but mainly for the purpose of facilitating trade, then their demand for RMB should not develop to a large scale. In the past, the supply of dollars to the rest of the world was achieved through loans and the purchase of goods and assets from other countries. The international supply of the renminbi can be achieved through a similar path, but how much it can be achieved and how large it can be needs to be further studied. As long as China has sufficient production capacity, we do not need to reserve a large amount of international currency, nor do we need the renminbi to replace the dollar as an international currency after the dollar loses its status as an international reserve currency. Of course, there will be a process of internationalization of the renminbi, but how far it can go is still uncertain. Considering the attitude of the United States and Europe towards the renminbi, it can be predicted that the internationalization of the renminbi will hardly reach the level of the internationalization of the dollar.
To sum up, we can see that the understanding of the current economic situation cannot talk about the economy in terms of the economy, but to penetrate the economy and see that it is actually a problem of interpersonal relations. The economic downturn itself will not cause damage to mainland society. During the period of planned economy, the mainland's economy rose and fell three times, with great ups and downs. After the big fall, as soon as the state investment kicks in, the economy kicks in. At present, the reason why China's economic downturn has a great impact on society is mainly due to the role of market mechanisms. Under the domination of the market mechanism, the economy is in a downturn, and private enterprises will inevitably fire workers because they are responsible for their own profits and losses (when the dismissed workers are not enough to survive, they will inevitably go shut down and go bankrupt), and the workers will inevitably face an existential threat if they lose their labor opportunities. It is this existential threat that causes the workers to revolt against society. The greater the proportion of private enterprises in society, the greater the impact of the economic downturn on society. This effect is probably not hedged by policy today. Therefore, China's current countermeasure is not to stabilize the expectations of private enterprises, still less to stabilize the expectations of private enterprises by subverting the basic tenets of Marxism, but to re-establish the vast sea of public enterprises and properly handle the interests of the state, collectives, and individuals on the basis of public ownership. This is extremely important in China, where the concept of private ownership is already extremely prevalent and pervasive.
In the vast ocean of re-establishment of public ownership, there will still be various small and medium-sized private enterprises at the same time. It is necessary to establish supply chain relations between public-owned enterprises and private enterprises, and some private enterprises can be relatively independent and adopt the strategy of outward development. On the whole, however, China must ensure the status of public ownership as the mainstay, and it must also make public enterprises bigger and more solid. The so-called expansion and solidification of public-owned enterprises means, on the one hand, the establishment of new public-owned enterprises, including the addition of new collective enterprises; on the other hand, public-owned enterprises must have people to carry out production, and they cannot only engage in non-productive business.
3. Be highly vigilant against the policy poison prescribed by Cai Moumou and his ilk
At the moment, some scholars are prescribing poison prescriptions for China. This prescription is actually in line with the United States, which demands further privatization, demands that China abandon the basic tenets and basic propositions of Marxism, and demands a fundamental revision of the mainland constitution.
For example, Cai Moumou recently published an article "The key to the development and growth of the private economy is to break through theoretical obstacles". The article argues that "in the more than 40 years since the reform and opening up, the development of the mainland's private economy has actually crossed institutional, political, legal and policy obstacles. However, the remarks questioning and negating the private economy still appear repeatedly in society and academic circles, prompting people to think deeply about how to scientifically explain the historical inevitability of developing and expanding the private economy theoretically. "The traditional theory of exploitation constitutes a theoretical obstacle to the further development of the non-public economy, and in order to remove this obstacle, it is necessary to re-understand the relationship between exploitation and private ownership. "Cai Moumou is not only against Chinese Marxists, not only to dig the graves of the ancestors of the Chinese Communist Party. The so-called traditional theory of exploitation is Marx's theory of capital, and the so-called elimination of this obstacle is the eradication of Marx's theory of capital, the basic principle of Marxism, in China. After eradicating Marx's theory of capital, the basic principle of Marxism, the Communist Party of China will lose its soul and ideals. General Secretary Xi Jinping has long made it clear that Capital is not outdated, and we are still in the era indicated by Marx. Therefore, Cai's article is a blatant challenge to the Party Central Committee and a blatant violation of the "two safeguards". Moreover, in this article, Cai Moumou openly claimed that he "led the academic team that devoted himself to research for more than 30 years and created a generalized theory of value that reflects the general laws of the market economy." The theory of distribution according to the contribution of factors of production based on the generalized theory of value provides a real theoretical basis for the protection of private property and the development and expansion of the private economy. It can be seen that Cai's viewpoint is by no means a whim, and it is related to the consistency of his viewpoint with the viewpoint of some other scholars, and this viewpoint must not be taken lightly! Cai Moumou has a fatal conceit, he thinks that his theory can replace Marx's theory, and therefore he thinks that he can replace Marx as the spiritual leader of the Chinese. He is creating a god for himself! This cannot but remind people of some cult leaders in the West, and if China's theoretical and public opinion circles are ruled by such a cult leader, China's economic situation will only continue to deteriorate.
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(The author is a professor and doctoral supervisor of the Economic Development Research Center of Wuhan University, and a senior researcher of the Kunlun Policy Research Institute; source: Kunlun Policy Network [original] revised draft, authorized by the author for the first time)