Wu Jinglian: The voices that the private economy should withdraw from are not harmonious, and there should be a debate to reach an agreement

Source: Sina Finance

The "Academic Seminar to Commemorate the 40th Anniversary of China's Economic Reform and Opening Up and the 20th Anniversary of the Establishment of the 50-Member Forum" hosted by the China Economic 50 Forum was held in Beijing on September 16. Wu Jinglian, a well-known economist, attended and delivered a speech.

Wu Jinglian said that the experience of China's 40 years of reform and opening up shows that "we must adhere to the direction of market-oriented and legal reform, and use specific methods suitable for China's national conditions to carry out reform tasks."

"In the past 40 years, whenever the marketization and legal reforms have been promoted relatively well, the quality and speed of China's economic growth have been relatively good, the welfare of the people has also been improved more, and the atmosphere of social harmony can be maintained." On the other hand, when the reform is not carried out smoothly, or even when there are twists and turns, the cause of socialist construction will encounter setbacks, and the speed of progress in all aspects will slow down or even regress," he concluded.

Wu Jinglian said that the reform program formulated by the Third Plenary Session of the Eighteenth Central Committee is fuller and more accurate than the program of the Third Plenary Session of the Fourteenth Central Committee, "the 336 reforms cover all aspects of society, and the measures taken now seem to be very appropriate", "Although we have experienced many twists and turns, fortunately, every time we have made a twist, we have risen to a higher level." So we now believe that the various decisions taken since the Eighteenth National Congress should be put in place."

When it comes to the current economic operation, Wu Jinglian summarizes it as a "rocker"-type operating state - mainly relying on a large number of investments to drive economic growth, and a large number of investments have caused excessive leverage, which can easily lead to the emergence of systemic risks.

"In this case, macroeconomic policy is very difficult to deal with, you have to reduce leverage, the growth rate will go down." To maintain a certain growth rate, the leverage will come up, and the danger of systemic risk will increase", so is there a way out? Wu Jinglian believes that the key to solving the problem is to improve efficiency, "as long as you can improve efficiency, these two aspects of the problem can be solved." But whether efficiency can be improved or not depends on reform in the final analysis."

"To solve these problems at present, we must implement them one by one in accordance with the decisions of the Central Committee since the Third Plenary Session of the Eighteenth Central Committee, especially the decisions of the Eighteenth Congress, the Nineteenth Congress, the Third Plenary Session of the Eighteenth Central Committee, and the Fourth Plenary Session," Wu Jinglian admitted.

Wu Jinglian suggested that the China Economic 50-member Economic Forum should discuss the implementation of reforms one by one, and adjust those that need to be adjusted. "If these matters are all justified, they should be resolutely implemented." Some of the phenomena that are emerging now are noteworthy, such as the abolition of private property at the beginning of this year and the withdrawal of recently. It's all a dissonant voice, but they have their reasons, and if they make sense, they need to agree through debate, and implement it one by one."

　The following is a transcript of the speech:

Wu Jinglian: I am very happy to usher in the 40th anniversary of reform and opening up and the 20th anniversary of the establishment of the China Economic 50 Forum.

The first point is how we should commemorate the 40th anniversary of reform and opening up and the 20th anniversary of the establishment of the 50-member Forum. I think the best commemoration is to seriously review the course of these 40 and 20 years, sum up the experiences and lessons of these 40 years and 20 years, find out the reasons for the great achievements, and find the right direction and path to guide future actions. After research, analysis, thinking and summary, we have found the right direction and path, and we can achieve greater victories by forging ahead.

The second opinion, what are the basic experiences and lessons of the 40 years of reform and opening up, and what are the main experiences and lessons of the work of the 50-member forum, which can be observed and defined from various angles, of course, there will be different opinions. Personally, I think the main lesson of the past 40 years is that we must adhere to the direction of market-oriented and legal reform.

In the past 40 years, whenever the reform of marketization and legalization has been carried out relatively well, the quality and speed of China's economic growth have been relatively good, the welfare of the masses of the people has been improved more, and the atmosphere of social harmony can be maintained. On the other hand, when the reform is not carried out smoothly or even when there are twists and turns, then the cause of socialist construction will encounter setbacks, and progress in all aspects will slow down or even regress.

This is a basic lesson. Of course, whether this lesson is properly summarized or not, we all need to study and discuss it together.

The third point is that our reform is moving forward in a tortuous manner under the guidance of a goal, and there have been many twists and turns and ups and downs in the process of reform in the past 40 years. Studying these twists and turns can deepen our understanding of the experience and lessons of reform.

For example, in the reform that began in the late 1970s, everyone felt that the general direction was market orientation, and the saying at that time was called "combining the planned economy and the market economy". But what is the market economy like, because we have been cut off from the mainstream of international economics for many years, so we are solving the problem with the same set of political economy that we learned from the Soviet Union. After a few years of doing so, it was found that it was not very successful, so there were twists and turns in the early 80s, and it was mainly promoted to the planned economy.

After going through twists and turns, in 1984, we summed up our experiences and lessons and went a step further, and at the Third Plenum, we set the goal of reform to build a socialist market economy or a planned market economy. But at that time, our respective understandings of what a socialist commodity economy or a planned commodity economy were were were also different.

After repeated discussions and choices in the mid-1980s, at the National Party Congress in 1985, it discussed what kind of economic form the socialist commodity economy or socialist planned commodity economy is, and finally chose the market economy model with macro-management.

But then there were twists and turns, and in 1986 it was called a supporting reform, but a few months later it felt that this thing could not be implemented. In 1987, another model called the combination of planning and market was chosen, and the state relied on regulating the market to guide enterprises.

Around 1988, there was another twist and turn, and some people thought that this socialist commodity economy still had not been able to highlight the plan, so the slogan was changed, called the combination of the planned economy and market regulation. Originally, some people advocated a return to the planned economy as the mainstay, supplemented by market regulation. But Comrade Xiaoping said that he could not change it, and not a single word could be changed. Therefore, it is called the combination of planned economy and market regulation. The nature of the economy is still a planned economy, which is a general box, so there is a three-year recession.

This twist and turn eventually led to the Fourteenth Congress in 1992 setting the goal of reform to build a socialist market economy, especially after a year, the Third Plenary Session of the Fourteenth Central Committee formulated a 50-point program, which determined the establishment of a unified, open, competitive, and orderly market economy, so that the market can play a fundamental role in the allocation of resources. The implementation of this decision enabled the Chinese economy to take off at the turn of the century.

However, at the beginning of this century, especially in 2005 and 2006, there were new twists and turns, and some people believed that it was necessary to emphasize the management of the state and the important position of the state-owned economy, and even some phenomena of "the country advancing and the people retreating" appeared. But soon this twist and turn led us to a historic decision at the Eighteenth Congress.

The Third Plenary Session of the Eighteenth Central Committee formulated a program for reform, which should be said to be fuller and more accurate than the program of the Third Plenary Session of the Fourteenth Central Committee, and the goal of reform was set to make the market play a decisive role in the allocation of resources. These 336 reforms cover all aspects of society, and the measures taken now seem very appropriate.

Although we have many twists and turns, fortunately, every time we go through a twist, we actually go up a step. Therefore, we now believe that on such a basis, we should implement the various decisions taken since the Eighteenth National Congress.

The fourth opinion is that economic reform is not fully in place, so the transformation of economic growth and economic development mode is not in place, which has caused some problems. In general, we describe it as a "rocker" economic operating state. That is to say, economic growth is mainly driven by a large amount of investment, and a large number of investments has caused excessive leverage, resulting in hidden dangers of systemic risks. In this case, macroeconomic policy is difficult to deal with, if you want to reduce leverage, then the growth rate will go down, if you want to maintain a certain growth rate, then the leverage will come up, the probability of systemic risk will increase.

Is there a way out? In fact, there is a way. The key factor is to improve efficiency, and as long as efficiency can be improved, both problems can be solved. However, whether efficiency can be improved or not depends on reform in the final analysis.

Therefore, in the final analysis, in order to solve the current problems, it is necessary to implement the decisions of the Central Committee since the Third Plenary Session of the Eighteenth Central Committee, especially the decisions of the Eighteenth Congress, the Nineteenth Congress, the Third Plenary Session of the Eighteenth Central Committee, and the Fourth Plenary Session. Now it seems that implementation will not be easy.

Finally, I suggest that the 50-member Economic Forum can discuss them one by one, as I have already said once, 336 reform measures, we discuss one by one, adjustments that need to be adjusted, in my opinion, are generally appropriate and correct. Of course, where adjustments need to be made.

If these things are all valid, then you should resolutely implement them. Some of the phenomena that have emerged now are noteworthy, such as the abolition of private property at the beginning of this year, and the recent withdrawal. It's all a dissonant voice, but they have their reasons, and if it makes sense, it needs to be agreed through debate, and it needs to be implemented one by one.

Our 50-member forum should make our contribution in clarifying ideas and promoting reform. Thank you!