Zhou Qiren went out of the mountain and revealed a major signal

Luo sir's words

2024-05-31 14:23Posted in Sichuan Workplace Creator

What he advocates is not only real-world economics, but also represents the steadfastness of the top management in the direction of marketization, which in itself is a reassuring pill.

Zhou Qiren, who is 73 years old this year, is a well-known economist and a professor at the National Development Institute of Peking University. He has been an advocate of real-world economics to advance China's marketization process through academic research.

Zhou Qiren, a 73-year-old economist, not only attended the meeting but also spoke at a symposium of companies and experts in Jinan, Shandong Province on May 23, which also led to a lot of speculation and interpretation because he is regarded as a market-oriented economist.

Prior to this, Zhou Qiren had disappeared for a long time, and this return to the high-level forum probably also marked that his "rightist" "privatization" economic proposition would also return to the high-level vision.

For many people, Zhou Qiren's name is unfamiliar.

But in fact, as one of the most important economists in China, Zhou Qiren's contribution to the mainland market economy is difficult to quantify.

This symposium also set the tone for the Third Plenum in July, and change should be the top priority.

Zhou Qiren's departure also means that the meeting in July is likely to make a historic breakthrough and change, and for ordinary people, its significance may be no less than that of the market economy introduced more than 40 years ago.

Zhou Qiren is a moderate market-oriented economist who is currently a member of the Monetary Committee of the Central Bank, and his weight in the mainland's economic circles can be described as pivotal, far from being comparable to Zhang Weiwei and his ilk.

At the symposium on May 23, although Zhou Qiren's speech was only about 10 minutes, his views were very important, in that brief speech, Zhou Qiren mainly expounded on "enhancing the people's sense of change", although he did not declare the top-level design, property rights system and other things he used to say, but his appearance at this symposium is itself very significant.

In the past, Zhou Qiren has always opposed government intervention in the market, and is a neoliberal economist like Yellen, in whom Hayek's shadow can be seen almost everywhere.

Holding the same view as Zhou Qiren is Zhang Weiying, another great economist whom I admire very much, and both economists have made very powerful and outstanding contributions to the marketization of the mainland's economy.

Now, as the mainland's macroeconomy is mired in a series of structural difficulties, Zhou Qiren's reappearance is also logically self-consistent in a sense, and his appearance may also mark that the mainland's market-oriented economy has once again gained the upper hand.

According to public information, Zhou Qiren was born in 1950, graduated from the Department of Economics of Renmin University in 1982, studied at the University of California, Los Angeles in the United States in 1991, and later obtained a doctorate in economics.

Zhou's research interests include property rights and contracts, economic history, theories of economic system change, enterprise and market organization, monopoly, regulation and regulatory reform, etc.

Finally, back to this symposium, since Zhou Qiren appeared at the symposium, this shows that some of his views and research directions have been recognized by the high-level.

Zhou Qiren is opposed to intervening in the market, and one of the things we have done the most in the past is industrial subsidies for industry, which is obviously contrary to Zhou Qiren's viewpoint, and Zhou Qiren's appearance at the symposium this time at least shows that we have realized some problems on some issues.

For example, as far as industrial policy is concerned, although it may play a role in the development of an industry by the whole country, this misallocation of resources may also cause misjudgment in the market.

Zhou Qiren's ability to go out of the mountain this time is directly related to his research and judgment of the current situation.

Previously, Zhou Qiren wrote an article entitled "The Only Way Out for China's Economy", in this article, Zhou Qiren expounded a point of view: from the perspective of the global pattern, China is sandwiched in the middle, with the "small courtyard and high wall" of developed countries, and the transfer of competitive industrial chains such as India and Vietnam, which have lower costs and greater efforts to attract investment; Internally, China's costs are changing, and at the heart of it is a resurgence in institutional costs.

From today's point of view, the views expounded by Zhou Qiren's article are obviously very reasonable, and this is also the fundamental reason for Zhou Qiren's return to the high-level forum, that is, to re-design the top-level for the current system cost.

From an external point of view, the current international situation facing the mainland is that external demand is shrinking and anti-globalization. How to understand the shrinking external demand and anti-globalization?

The answer is actually very simple, since the introduction of the market economy on the mainland, the mainland has been deeply involved in globalization, although the developed countries in Europe and the United States have enjoyed high-quality and low-cost goods, but due to the impact of cheap labor on the mainland, the unemployment rate in Europe and the United States has remained high, and the internal economic problems are numerous.

Trump's inauguration marked the rise of American conservatism, behind which was the perennial unequal trade volume between the two countries, so Trump unilaterally announced tariffs on the mainland.

The result of this is that the mainland is open to the outside world in the market, deeply integrated into globalization, and has become the world's factory, but it has also destroyed the olive-shaped society established by developed countries after World War II, and the polarization is serious after globalization, and the Gini coefficient has risen.

As a result, the most uncomfortable people are the manufacturing workers and the middle and lower classes in the United States, and today we say that the rise of Western conservatism is actually behind the shift in the votes of the traditional middle and lower classes.

It is against this backdrop that Trump emerged, signaling Americans' desire for more social resources to be tilted toward the middle and lower classes, rather than to the traditional elites.

So, Trump started pointing the finger at us.

I think this is also the fundamental reason why Zhou Qiren was able to come back to the mountain this time, because our past top-level design has collided head-on with the rise of Western conservatism, and relying on export and industrial policies has begun to fail.

As early as a few years ago, we had conceived of becoming a manufacturing power, and in "Made in China 2025", we mentioned that in order to become a world manufacturing power in 2025, it can be compared with European and American powers in terms of advantageous industries.

But this vision is premised on the continuation of globalization.

Now we have reached the point of manufacturing power, but we obviously did not expect the rise of Western conservatism, on the one hand, the mainland's industrial output value is getting higher and higher, but on the other hand, the trade tariff barriers of European and American countries are also correspondingly higher, which leads to the embarrassment after becoming a manufacturing power: who will pay for the mainland's goods?

Relying on domestic demand? According to the 2019 report of Beijing Normal University, there are only 70 million people with an average monthly income of more than 5,000 in the mainland, while the total population of the mainland is as high as 1.4 billion.

Therefore, Zhou Qiren opposes market intervention and industrial policy, and his presence at this symposium itself means a certain signal.

In the traditional economic theories of the past, there was a theory of comparative advantage, and the founder of this theory, Ricardo, said that countries should make use of their strengths and avoid their weaknesses, and choose things with high productivity, so that the overall output of the whole society will be high.

Comparative advantage later became the underlying theory of allowing globalization in Europe and the United States.

However, the great economist Samuelson later concluded that this was not right, because China did everything, and after making socks to build cars, and after finishing cars to build airplanes, everyone's advantages converged, forcing developed countries to not know what to do.

Before he died, Samuelson asked a question: what did the original people who built bicycles now start to build airplanes?

Samuelson's simple and crude conclusion also warns the West of the risks of globalization: under a common comparative advantage, one side could permanently harm the interests of the other.

Is Samuelson right? Absolutely.

It has been true that the mainland has been doing almost everything in airplanes, semiconductors, and automobiles, even if it can't be done temporarily, we will invest hundreds of billions of dollars in it first, and this is the case with the chip industry.

So why do we do everything? This is back to the old line that Zhou Qiren opposes: industrial policy.

If we look at airplanes, clean energy and chips, we will find that almost none of these things are products of the market economy, but products of industrial policy.

When the non-market-oriented forces overtake in the market, our comparative advantage is still there, and we have earned a huge high trade surplus over the years, but the comparative advantage of Europe and the United States is gone, and their advantageous industries are now also developing, and at this stage, the law of the market does not work, and the law outside the economy will play a role.

Trade frictions, barriers, and even international tensions are coming, and the financial crisis is coming.

But these are not enough to explain why Zhou Qiren came out of the mountain.

The complexity of the economic situation we face today is not only external, but also internal.

From the outside, our economic downturn is first of all the global external demand contraction and trade barriers, if you are an economy that relies on domestic demand development, the impact on you is small, but we are in the rapid growth, we are highly dependent on external demand, the natural impact is greater.

At this time, when the comparative advantage caused by industrial policy is completely lost, and under the rise of Western conservatism, Zhou Qiren's emergence may be transformative.

We not only need to go back to the market route, but we also need to reduce the cost of our system again.

Returning to the market means respecting the market's own choices, and no longer relying excessively on the power of industrial policy as in the past.

Reducing institutional costs means transforming the deep-water zone.

What is institutional cost?

The period from 1995 to 2012 was the period of the highest growth in the mainland; Our nominal GDP growth is 8.6 times, the corresponding national total wages have increased by 8.8 times, taxes have increased by 16.7 times, local income other than taxes has increased by 18.8 times, and the social security insurance and one housing fund that must be paid by law have increased by 28.7 times, and the most important thing is land, and the land transfer fee obtained by exclusive land supply has increased by 64 times!

This set of data is a good explanation of what institutional costs are.

GDP has increased by 8.6 times, but the subsequent cost increases are far more than GDP growth, in the long run, our enterprise costs remain high, business pressure increases, corresponding to the employees, that is, income decline, employment dilemma.

Zhou Qiren has long been clearly proposed in his past articles how to ensure our cost advantage, that is, to reduce institutional costs and innovation.

Zhou Qiren once said that if the mainland does not innovate and reform, it will not get out of its current predicament.

I think what he said is just a big truth, and the appearance of Zhou Qiren at the symposium this time also means that the top management has begun to seriously examine his views, as for how much can be adopted, I believe that with our wisdom and Zhou Qiren's own personality charm, something in the deep water area will definitely come.

The road is long and resistant, and I encourage you.

end.

Author: Luo sir, concerned about the economy, society and everything in our world, curious about the logic behind the development of things, optimistic pessimist.

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