How hard is it for MSMEs? A few days ago, Tang Renjian, governor of Gansu Province, rarely shouted at the Gansu Provincial Small and Medium-sized Enterprises Development Promotion Conference: "Helping small and medium-sized and micro enterprises tide over difficulties is not a general emergency, but a hundred thousand urgent needs"!
Text: Zhao Xiao (Independent Economist) Responsible Editor: Li Jing
There are three challenges to China's economy: the direct and indirect impact of the short-term epidemic; the impact of the medium-term "Globalization 3.0"; and the impact of the long-term "Tacitus Trap".
1
Short-term challenges: the direct and indirect impact of the pandemic
"Short-term direct impact of the epidemic" refers to a series of shocks caused by the new crown virus to the Chinese economy, including the initial (first wave) shock, the second explosion shock, the external import shock, and the second wave that may occur in the autumn of 2020 and the third wave that may occur in the spring of 2021. As long as there is an epidemic, there is a possibility of an impact on the economy. The biggest shock to the economy comes from "shock therapy" such as lockdown and isolation.
There are three "indirect impacts of short-term epidemics": one is the external demand shock, which affects China's external demand due to the spread of the epidemic to countries around the world (such as China's exports in the first quarter fell by 11.4% year-on-year); the second is the domestic demand shock, which has led to a large number of unemployment, income decline, and deterioration of future expectations due to the impact of the epidemic, which has led to a decline in consumption; the third is that the supply chain is not smooth, and many countries have begun to restrict exports, including 16 countries restricting grain exports, which is a manifestation of poor supply chains.
These shocks brought about by the epidemic have made us see that even if China's economy resumes work, it will be difficult to resume production, and even if it resumes production, it will not guarantee that there will be a market. Under such circumstances, the post-disaster recovery of China's economy is in fact difficult to go smoothly, and the decline and downturn of China's economy for a considerable period of time cannot be avoided.
Fortunately, except for a few provinces such as Heilongjiang, the current epidemic situation in the country is generally stable. In addition, Beijing and other places have also begun to reduce the level of epidemic prevention, at the same time, there is also some good news in terms of vaccines. It is hoped that the detection technology and detection capacity will continue to rise; only when the testing keeps up, people can have basic confidence in the "fight against the epidemic".
2
If you can't protect small and medium-sized micro enterprises, you can't achieve the "six guarantees"!
Most worryingly, the risk of a massive collapse of small and medium-sized enterprises (SMEs) leading to a wave of unemployment is emerging. Once small and medium-sized enterprises go out of business, it is not an easy task to recover, so it can have extremely serious consequences, including a vicious circle of the economy.
Unfortunately, although many people, including this author, are clamoring for the government to help, so far, there has not been much that has been done for MSMEs to ensure their survival. This cannot but make people full of anxiety about the future.
At the Politburo meeting on April 17, the "six guarantees" (to ensure the employment of residents, to ensure the basic livelihood, to protect the main body of the market, to ensure food and energy security, to ensure the stability of the industrial chain supply chain and to ensure the operation of the grass-roots level) were first mentioned, which shows that there is a clear awareness of the seriousness of the situation. However, the protection of small and medium-sized enterprises is the most important, but unfortunately it is not emphasized.
In fact, only by guaranteeing small and medium-sized micro enterprises can we ensure the employment of residents (small and medium-sized enterprises are the main body of employment), the basic people's livelihood (there is no people's livelihood without employment), the main body of the market (small and medium-sized enterprises are the main body of the market), the stability of the industrial chain supply chain (small and medium-sized enterprises are an important part of the supply chain) and the operation of the grass-roots level (the grass-roots level below the county level is almost all small and medium-sized enterprises to provide taxation).
3
Be wary of the dilemma of resuming work and not resuming the market
On April 28, the China Hotel Industry Association said: Mainland catering enterprises are in the dilemma of resuming work and not resuming the market, 70.59% of the surveyed enterprises said that the most difficult time is from April to May; as of now, 36.28% of the catering enterprises that have closed some or all of their stores; 38.76% of the enterprises are forced to face the problem of partial layoffs or dissolution of employees; although stores nationwide are gradually opening, more than 90% of the 5451 stores surveyed are more than 90% The passenger flow of catering enterprises has dropped by half compared with last year, and the turnover is less than half of the same period last year...
On April 28, the central bank also released a survey report: 87.2% of bankers and 75.5% of entrepreneurs believe that the current macro economy is "cold". It can be seen that the road to China's economic recovery under the influence of the epidemic is still very long.
4
Helping small and medium-sized enterprises is not a general emergency, but a hundred thousand urgent needs
How hard is it for MSMEs? A few days ago, Tang Renjian, governor of Gansu Province, rarely shouted at the meeting to promote the development of small and medium-sized enterprises in Gansu Province: Gansu's economy has reached the point of "100,000 urgent and urgent". "Many enterprises have opened their doors without customers or very few customers", far from reaching the normal level of production and operation, especially the industry below the scale, accommodation and catering, cultural tourism and other industries are weak and sluggish, "individual enterprises even hang their lives on the line".
Among the enterprises that started construction in Gansu, 52.1% of the industrial enterprises under the regulations, 62.4% of the construction enterprises, and 54.9% of the service enterprises under the regulations were below 50% of the normal production level, 20.2% of the industrial enterprises under the regulations, 12.5% of the accommodation and catering enterprises under the regulations, and 18.5% of the service enterprises under the regulations are expected to reduce their operating income by more than 50% in the second quarter, coupled with the rigid expenditures such as taxes, rent, social security, and wages, many small and medium-sized micro and medium-sized enterprises are facing a severe survival crisis.
For the survival crisis of small and medium-sized enterprises, Governor Tang Renjian said: "Helping small and medium-sized enterprises to tide over the difficulties is not a general emergency, but a hundred thousand urgent needs." "At present, there are 1.765 million market entities in the province, and there are tens of millions of practitioners behind this." If you can't pass this 'hurdle', the risk it brings will definitely be a 'butterfly effect', causing bad debts in banks, mass unemployment, and contract breaches, which is certain, and the lack of smooth economic circulation and even obstruction is also a matter of high probability. More seriously, it is likely to evolve into people's livelihood problems and even risks in the socio-political field. ”
It is conceivable that if it is dragged on, the fate of the national fortune and the fate of the Chinese will face great risks; once again, it is recommended that the government rush to help small and medium-sized enterprises!
5
Medium-Term Challenge: Vigilance for the "New Cold War" under Globalization 3.0
In addition to the near-term worries about the impact of the epidemic, the "de-Sinicization" of "Globalization 3.0" will be the biggest challenge that China's economic development should be considered and dealt with in the medium term.
In "Globalization 3.0 and China's Choice", the author said: Globalization 1.0 is force and colonial-driven globalization, Globalization 2.0 is money and market-driven globalization, and Globalization 3.0 will be on the power of money (market), plus the brakes of safety and the steering wheel of values.
The author also predicts that globalization 3.0 will reorganize the group according to the three views after the epidemic and start again. For China, a big risk and challenge is the issue of "de-Sinicization" that many countries are discussing now.
Trust is actually a factor of production as important in economics as technology and capital. Today, due to various reasons, people in many countries no longer trust us, which is the so-called "de-Sinicization."
Regarding "de-Sinicization" and the restructuring of global industrial chains, there have been some recent debates. There is a view that China's total economic output has accounted for 20% of the world's total, China's dominant position in the global industrial chain cannot be shaken, and the world has no way to leave China. Of course, this view is not unreasonable, but it is obviously not profound enough, and it is too much to regard the operational problem as a trend problem!
The trend is that the United States and other countries not only want to decouple from China, which means that globalization 2.0, which was the most important driving force for China's economic development, has come to an end, and the United States and the Western world are even about to form a "new Cold War" situation with China, so the future trend is far more worrying than the average person imagines.
In fact, in today's Western world, from the political circles to the intellectual circles, business circles, and industries, people generally believe that the confrontation between the United States and China has been comprehensively unfolded and rapidly escalated, which can be called a "new Cold War." Niall Ferguson, a researcher at stanford University's Hoover Institution, believes that the second Cold War will begin in 2019 in the eyes of future historians (Xie Tian, 2020).
The clearest sign of the "new Cold War" was the 2019 North Atlantic Treaty Organization (NATO) summit in London, which for the first time highlighted the "Threat of China." Observers believe that the "new Cold War" combines hot war, psychological war, information war, trade war, asymmetric war, and ultra-limited war, which is unprecedented in human history; the depth, breadth and intensity of the new Cold War will not be inferior to the old Cold War, and it is surpassed in almost all aspects.
After the curtain of the "new Cold War" is opened, decoupling will be inevitable, the world is bound to reshuffle, and the countries of the world are bound to re-queue; and the situation of the group sitting in the rows must be certain, and the duel will begin.
If it develops to this point, it is possible for China to return to the international form overnight before 1976. Although China can still operate behind closed doors with its huge land resources, population size, and market size, the economic vitality brought about by China's scientific and technological progress, institutional innovation, and overseas markets will no longer exist.
As Huawei Ren Zhengfei frankly stated: aside from technological progress in the global open market environment, Huawei's operating system "Hongmeng" will take 300 years to catch up with Google and Apple in the United States.
China's experience is that opening up drives reform, and the coast drives the interior. Without opening up, where will reform begin? Without reform, where will China's economic vitality begin? This cannot but create a sense of distress. Whether China's economy will continue to move forward in the quagmire after the epidemic, and Iran's decoupling from the Richest Country in Asia to the Poorest Country after decoupling from the United States, is a lesson for the past.
6
The Long-Term Challenge: How to Get Out of the Tacitus Trap?!
In addition to short-term and medium-term challenges, China's economy is also facing a long-term historical challenge, that is, we must not fall into the "chaotic cycle" of history. What kind of modern civilization will China build in the future? This is completely separate from challenges such as the short-term impact of the epidemic and the "globalization" impact in the medium term. The "Tacitus Trap", which has occurred repeatedly in Chinese history, tells us that we have never jumped out of the Tacitus trust trap before, and thus have never established a civilization of mutual trust, social harmony, happiness for all, and a sustainable economy and long-term peace and stability.
The biggest challenge brought to us today by China's thousands of years of history is that even if there are no short- and medium-term risks and challenges, whether China itself can transcend the "law of historical cycles" or the cycle of chaos in history and cross the "Three Gorges of History" of civilization as Tang Degang said is still a challenging thing that will be hated for thousands of years if it is not careful.
"The great changes that have not occurred in three thousand years" mean that changes are general and development is general; if it does not change or retreats, sooner or later, the driving force of economic development will be lost little by little! What choice do we make?
Source: Chinese and foreign management
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