Cheng Shi: Not confused

Cheng Shi is the Chief Economist and Managing Director of ICBC International and a director of the China Chief Economist Forum

Forty is not confused, not confused and sound. As an outstanding representative of China's post-75s Mesozoic economists, Dr. Zhang Ming has published a new book, "Macroeconomic Analysis of China: Economic Growth, Cyclical Fluctuations and Asset Allocation". In my opinion, this is a book that resonates deeply: First, it resonates with the Chinese economy itself, economists in their early 40s and the market economy are also in the stage of qualitative change from youth and maturity, and they have a different flavor for the professional thinking of "peers" in the 40 years of reform and opening up; secondly, it integrates the resonance of different types of economists, and Zhang Ming is branded with academic economists, market economists and policy economists, different positions, different styles, Different research methods and macroscopic thinking converge in this book, showing a kind of thinking tension of the sea; in addition, it tells the resonance of our generation, between the introverted front wave and the surging back wave, the middle wave crowd in the cracks of our generation, not so old and orderly, not so avant-garde radical, which is both a disadvantage, but also an advantage, but also a feature, we are all "really lost in its way, feel that the present is not yesterday", this harmonious and different thinking paradigm is systematically displayed in this book.

Through these three resonances, I realized the meaning of "not confused". After forty years of ups and downs, Zhang Ming's research path is not confused, integrated, not afraid of floating clouds to cover his eyes; after forty years of ups and downs, China's economic development road is not confused, no questions, do not forget the original intention and then start. Not being confused is the self-confidence of the road, and this self-confidence stems from the correction of errors after trial and error, from the self-consciousness after introspection, from the transcendence after following, and from the freedom after self-discipline. For people and the country, not confused is a rare temperament and state, then, what is not confused? In my opinion, there are five interpretations of not being confused:

Not confused, first, cognition has a benchmark, and then can be guided by the situation and follow objective laws. When we are young, we all think that we are special, and the sign of maturity is to accept our own ordinariness and empathy as ordinary people. Just like Zhang Ming and I, when we were doctoral students, we danced lightly on the Sohu blog and enjoyed the pleasure of indulging in the world at will outside of academia. Zhang Ming has written about martial arts, he has written about basketball, I have written about movies, I have written music, except for naughtiness, we may subconsciously want to prove that we are special. However, now, we are invariably more focused on economic research itself, less personality flaunting, but more pragmatic. Similarly, the youth era of China's economy has also appeared special, self-positioning as a "socialist market economy with Chinese characteristics", but with the change of time, the genes of the market economy have accelerated and grown, and some universal economic laws have increasingly shown decisiveness and control, gradually dominating the actual operation of China's economy. Macroeconomic problems are big problems with grand narratives and entangled interests, if there is no logical and self-consistent scientific analysis framework, it is easy to fall into the deadlock of public opinion and reason, and China's economy is no longer special, which provides a better opportunity for rational cognition and objective prediction of the short-term fluctuations and long-term development of China's economy. A valuable feature of Zhang Mingxin's book is that before analyzing each big problem, a general theoretical model of the market economy is concisely established, which provides an analytical benchmark for the subsequent details and logical deduction. From my experience, this kind of methodology from general to special is very useful for solving some specious economic problems, and the key to it is the accurate grasp of the macro model and the correct understanding of the law itself. For example, many people think that China's stock market is very special, in the past three decades, China's economy has grown rapidly, but the A-share market has performed flat, and the objective law of "the stock market is a barometer of the economy" does not seem to be true in China. However, what is wrong is not the law itself, but the misreading of the law, looking at the world, the stock market has never been a barometer of economic growth, but a barometer of economic growth, from this due meaning, China's stock market is not special, "the stock market is the barometer of the economy" is still established in China, and it not only explains the mediocrity of China's stock market in the past 30 years, but also indicates the wonderful future of China's stock market in the real economy "deceleration and quality increase" stage. Therefore, the accurate application of theoretical tools and market laws is particularly important for China's economic analysis, and can often play a role in seeing the clouds. Zhang Ming not only has profound academic skills, but also accumulated a lot of practical experience in applied teaching and market roadshows, which makes his model selection and framework construction in analyzing economic growth, cyclical fluctuations and asset allocation very efficient and pragmatic.

Not confused, the second is that the self has a positioning, and then can take me as the main and grasp the initiative of the strain. The manifestation of people's immaturity and self-confidence is, on the one hand, to show themselves weakly, and on the other hand, to blindly imitate others. Zhang Ming and I both once liked and recommended a movie to my friends called "Mary and Max", and one of the most touching passages in this movie is Max's last letter to Mary: "Forgive you because you are not perfect, and I am not; I want to become anyone when I was young, except myself; later I knew that I had to accept myself, my shortcomings and my wholeness, we could not choose our own shortcomings, they were also part of us." "The sign of going from confusion to non-confusion is reconciliation with oneself. We are not special, human nature is common, but we all have characteristics, face up to and accept our own characteristics, in order to go well and take the road of their own development. For the macroeconomy, the inner operation law is universal, but the natural endowments of individuals are completely different, so the economic development and financial operation of different countries are similar but not similar. In the youth of China's economy, we are always accustomed to looking at others, taking mature and developed individuals as an example, and inadvertently ignoring ourselves; we are accustomed to setting up a goal of catching up and surpassing, a reference for imitation, but the facts show that it is more and more important to surpass ourselves. Today, China is already the world's second largest economy, as Zhang Mingxin emphasized in summarizing the past, the objective conditions that can support China's economy to play its latecomer advantage are no longer available, and China needs to face itself squarely in order to truly surpass itself in the future where it is difficult to have a reference. Where are the natural endowments of China's economy reflected? Zhang Mingxin's book analyzes the five levels of labor force, human capital, physical capital, technology and system. As far as my understanding is concerned, the biggest characteristics of China are its long history and extensive geographical knowledge, which together determine the key point of China's long-term economic development. On the one hand, to liberate the productive forces, it is necessary to achieve the effective allocation of factors within a wider and deeper range, so the significance of reform and opening up for China is far greater than that of other countries, so Zhang Ming pointed out to the point that every decade, China will carry out a major economic system reform to enhance the soft power of the system. On the other hand, the development of productive forces requires the core carrier of productive forces - "people" as the core concern, the internal circulation of economic development with people's consumption demand, the improvement of people's quality to help the upgrading of science and technology competition, the interests of people to promote the fairness and justice of economic distribution, and the consolidation of hard power through people-oriented development. Zhang Ming is a very characteristic economist, he likes Chinese martial arts, he looks tough and soft inside, these characteristics allow him to fully understand the natural endowments of the Chinese economy, which in turn makes his Research on China based on this more in-depth and warmer.

Not confused, the third is to grow up and accumulate, and then be able to remove the false and save the truth, not to be trapped by the false name. Everything in the world is easier said than done, and accepting an ordinary but characteristic self, obeying objective laws and reconciling with oneself requires a process. Therefore, only forty can not be confused, and experience is the premise of not being confused. As a peer and good friend, I have watched and witnessed Zhang Ming's experience and acceleration at every step of the way in the past 20 years. Zhang Ming's resume is rich and single-minded, he has high-quality academic achievements when he is a professor, has outstanding market influence when he is a chief economist, has pragmatic policy suggestions when he is a member of a national think tank, and the key to the smooth transformation between the three roles is that he has always focused on economic research itself, and has not been distracted by the fame and fortune disputes that exist in the three rivers and lakes. Of course, such as people drinking water, cold and warm self-knowledge, everyone's growth, is not easy, I have seen too many Zhang Ming in various forums to wave the wonderful Fang Shuo, but we have also sat on the Beijing road teeth on the second pot of the head of the stamina to each other bitter water. What really makes me admire and rejoice is that growing up is not easy, but Zhang Ming has never forgotten his original intention, and he has a passage in the preface of his new book that makes me feel related: "The writing process of this book is painful and happy, I have not experienced the pleasure of this concentrated writing for a long time, and the feeling of pleasure has always accompanied the whole process, and I am still very happy." "The road is long, the scenery is vast, you can gain something, you have some accumulation, and what is really important is not to be trapped by outsiders' speech and worldly fame and fortune, follow your heart, and do what you really like and are good at." For Zhang Ming and me, the most important thing is research, which is the foundation of our livelihood and the greatest pleasure of readers. By people and countries, what is the most important thing for China's economy? The answer is simple, development is always the last word. So, what is the essence of development? For the past forty years, we think it's the number of economic growth, so there will be GDP cults, there will be strong stimulus, there will be confusion about solving one problem with another. However, more and more people now realize that development is not simply growth, but the employment that growth can create, the improvement of people's livelihood and business opportunities that can be brought about. For today's China, which has accumulated for forty years, the economic growth rate is important and not so important, and if behind the rapid growth is the people's livelihood and the national strength, then this high growth is just a flashy name. To eliminate the false and the true, to achieve sustainable development, we need to make every percentage point of economic growth lead to a more significant prosperity and national strength. Fortunately, China, which is not confused for forty years, is no longer entangled in the numbers themselves, and resolutely canceled the setting of the 2020 growth target under the impact of the new crown epidemic, which is not trapped by the false name, relies on the accumulated strength and confidence, and highlights the determination and wisdom of travel. This is precisely the real reason why Zhang Ming is objective but not pessimistic, cautious but confident in his new book looking forward to China's future.

Not confused, the fourth is to have reverence in the heart, and then be able to seek truth from facts and not be limited by conclusive conclusions. The accumulated results are happy, but the process of growing up is painful. Zhang Ming once wrote in another book of his that this pain stems from the friction and contrast between theoretical beliefs and market reality, and he, me, and our good friend Guan Qingyou have all experienced this pain. We are phDs of the same year, and when we were studying, we were all passionate, fierce, and each one of us seemed to be high, but as soon as we graduated, the subprime mortgage crisis in 2007, and the theoretical self-confidence accumulated in the school was quickly impacted by the cruel reality. After entering the society from the ivory tower, we have all experienced the change from macro research within the system to market-oriented investment bank research, and we are forced to put our own research in the market and be repeatedly refined and beaten. Stepping out of our comfort zone and doing sell-side research in a competitive, fast-paced financial market is undoubtedly painful, and we've all had the experience of predictions being punched in the face, opinions being questioned, and roadshows being humiliated, but it's all worth it because it teaches us an important lesson to get not confused: know how to be in awe, fear of reality, fear of the market, fear of the future, fear of humanity. Only by learning reverence in the market grinding can we break through our own consensus in research, just like Guan Qingyou said: "To do the right and useful research", as Zhang Ming wrote in the preface to the new book: "If macroeconomics is to apply what we have learned, we must combine theory with reality." "How to combine? Zhang Mingxin's new book gives a methodology that complements near and far, complements the short and long terms, and logically self-consistent, that is, to adopt the idea of "from long-term to short-term, from situation to policy, from macro to configuration", "Only by understanding the logic of medium- and long-term economic growth and structural changes can we make a more accurate judgment on short-term economic trends; only by comprehensively, fully, and systematically grasping the macroeconomic situation and being familiar with the ideas and logic of the government formulating macro policies can we make a more accurate outlook on the future macro policy trends." Only by fully understanding the current situation and prospects of the macroeconomic situation at home and abroad can we make more rational and accurate decisions on large-scale asset allocation. This kind of thinking with both academic rigor and objective reality is pragmatic and efficient for interpreting the Chinese economy that is not confused for forty years, and it is just right. Theory is a high degree of condensation of reality, reality is the verification and innovation of theory, and theory and reality are essentially endogenous relations that promote each other, which is deeply reflected in the operation of China's economy. The development of China's economy not only follows the law, but also constantly enriches the connotation of the law itself. For example, the RMB exchange rate is a very interesting Chinese variable, exchange rate theory can help us to understand its actual operation, its actual operation promotes the development of theoretical innovation, many times, the change of the RMB exchange rate is neither determined by the market, nor is it determined by policy intervention, but the result of the "visible hand" and the "invisible hand" game, and this game process can be explained and predicted by rigorous economic methods, Zhang Ming and I have done an analysis of this, predicting who is right and who is wrong is not important. What is important is to help the market form a more rational understanding of the renminbi, and by participating in it, we have gained endless interest in observation and speculation.

Not confused, the fifth is to have a direction to move forward, and then to be able to be gentle as jade and control the ups and downs of the world. Wandering between the collision of theory and reality, unconsciously, from 2007, which wants to say goodbye, to 2020, which is more difficult to encounter in a hundred years, the world is becoming more and more crazy, how can it be at ease? Only to find the direction. After forty years of confusion, the direction of life is becoming clearer and clearer, it is not difficult for yourself, do not let go of yourself, learn to compromise, know how to be in awe, but never give up, do something and do not do anything, and try your best to realize the value of life. Humble gentleman, gentle as jade, not confused after Zhang Ming, more and more professional, but also more and more interesting, he on the KEEP every day fitness, read different types of books, from time to time to watch movies, write articles, constantly update and improve his cognitive Chinese economy of the analytical framework, he said in the preface to the new book: "Macroeconomic analysis will be an interesting game through my future life course", this leisurely, methodical state is the true embodiment of finding the direction. Also desperately needing to find direction after not being confused is the Chinese economy. As Zhang Ming analyzes in the new book, the past success of China's economy stems from the continuous investment of factors and the activation of micro potential by reform and opening up. However, now, factor input is facing a natural bottleneck, and reform and opening up meet the challenges of protectionism, interest barriers and class solidification, and the future of China's economy looks uncertain. Because of this, many people are skeptical about the Chinese economy in the middle-income trap. In fact, the characteristic facts and policy logic of China's economy are very clear, and the choice in front of China is almost inevitable, that is, to further improve micro incentives through reform and opening up, activate development potential through the optimal allocation of resources in a wider area of land, labor, capital and data, accelerate the closed-loop construction of the economic and financial internal cycle through supply-side structural reform, consolidate the micro foundation of macroeconomic growth through the sinking of the policy center of gravity, and seize the opportunity in the global upgrading competition through scientific and technological investment and global governance game. The future direction of China's economy is not to deliberately become something, but to conform to the global trend and human trend, accelerate, smooth and promote the process of economic endogenous optimization and self-evolution, and follow the trend and innovate and develop.

Forty are not confused, not confused, not afraid of action. Zhang Ming is like this, and so is China.