Inventory Of Three Factors Driving Economic Growth

The policy we need to take in the current circumstances should focus on promoting reform under the conditions of taking measures to ensure that there is no systemic risk. Because only by comprehensively deepening reform and building a good social and economic system can we optimize the structure and transformation mode, and establish a new normal consensus that is supported by higher efficiency.

How did the rapid growth in the past 30 years come?

It depends mainly on large-scale investment. But there are other factors. The first factor is a large number of new labor force, that is, the "demographic dividend" by Cai, Professor of the Chinese Academy of social sciences. Another factor is efficiency. Reform and opening up have a very positive impact on improving efficiency. On the one hand, the market reform has changed the situation of urban and rural isolation. A large number of inefficient rural labor and rural land have been transferred to cities in the past. This structural change has improved the efficiency of resource utilization. On the other hand, opening up enables us to rapidly improve China's production technology level by introducing foreign equipment and technology, so that the technological gap between China and developed countries is rapidly narrowing. As a result, after the reform and opening up, the contribution of production efficiency to growth has been greatly improved compared with before the reform and opening up.

The problem now is that these factors are conducive to maintaining a high growth rate, some of which are being reduced and some have disappeared.

First of all, the contribution of new labour force to economic growth is also becoming smaller and smaller. Professor Cai has pointed out in 2006 that according to their previous three years' survey, the situation of unlimited supply of surplus labor is changing, and the "Lewis turning point" has emerged.

Secondly, as China's general technology level is close to that of western countries, it will be very difficult to improve its technological level by introducing foreign equipment and technology. Professor Bai Chung en of Tsinghua University and other researchers have generally agreed that the contribution of TFP in China's economic growth has been significantly reduced since the beginning of this century, and the potential growth rate of China's economy has declined.

The basic principle of economics tells us that in the case of the potential growth rate determined by the existing resources and technological conditions, the only way to increase the rate of growth in the short term is to adopt stimulus policies and expand the market through credit expansion. But in China's case, a long period of stimulus has made the macroeconomic fragile and systemic risk.

Gu Zhaoming, chief economist of the Nomura Institute of Japan, wrote several books to sum up the lessons of Japan's economic recession in recent years. In his book, he pointed out that Japan's economic recession and many important financial crises all over the world are the balance sheet recession after the bubble burst, and the basis for the emergence of the balance sheet recession is the defect of high leverage ratio. In my view, if the western countries' balance sheet defects are mainly caused by high consumption and high welfare, the excessive leverage rate in East Asian countries is mainly caused by excessive borrowing of enterprises and governments at all levels. At present, when the leverage ratio of our government agencies and enterprises is too high, the debt repayment difficulties and even "run away" debts in some sectors are common. Under such circumstances, what the government should do is "deleveraging". Eliminate risks Instead of strengthening the "stimulus" approach to maintain a high growth rate. Continuing to increase leverage will increase the risk of systemic risk.

What's more, the effect of reducing stimulus has been very obvious since 2009. If the 4 trillion yuan investment (two years) and 10 trillion yuan loans in 2009 also raised the growth rate of the four quarter of 2009 and the first quarter and the two quarter of 2010 to more than 10%, the growth rate of 1 trillion yuan in the two quarter of 2014 increased from 7.4% in the first quarter to 7.5% in two quarter, which rose by 0.1 percentage points, and in the second quarter, it fell back to the "0.1". The effect of diminishing return on investment has been fully demonstrated in economics.

The above analysis shows that the only way out is to improve the so-called Solow allowance, that is, the contribution of technological progress and efficiency improvement to economic growth, that is to say, we need to optimize the structure and promote innovation so as to realize the fundamental transformation of the economic development mode from extensive development to intensive development.

Starting from the Ninth Five Year Plan of -2000 in 1996, the request for achieving this transformation was put forward, but the implementation of most of the time was very unsatisfactory. The crux of the problem is that the transformation of the mode of development is constrained by the old system.

When formulating the "95" plan in 1995, the State Planning Commission first proposed the need to change the growth pattern from extensive growth to intensive growth. In the later discussion, people summed up the lessons of the unsuccessful transformation of the Soviet Union, pointing out that the transformation of the system is the basis for the transformation of the growth mode. Therefore, the "95" plan stipulates that "two fundamental changes" should be achieved: one is the change from the extensive growth to the intensive growth of the mode of economic growth. economic system From planned economy to market economy.

During the "95" plan of -2000 in 1996, due to the implementation of the the third Plenary Session of the 14th CPC Central Committee decision in 1993, market oriented reform was comprehensively promoted, and the transformation of the mode of economic growth has also made some achievements.

But during the "fifteen" plan of -2005 in 2001, Urbanization The acceleration of this good thing has greatly increased the land and other important resources in the hands of the governments at all levels under the Chinese system, so many places have seen a government led boom in heavy chemical industry investment. As the government has led the allocation of important resources, the transformation of the mode of economic development has also reversed.

"11th Five-Year" summed up the lesson of "fifteen" and put forward the main line of changing the mode of economic growth. However, due to the slow progress of reform during the "11th Five-Year" period, although we have worked out a good "11th Five-Year" plan, we have not been able to make good progress in the transformation of the mode of economic development. As a result, the Central Committee of the Communist Party of China (CPC) had to issue a call for accelerating the transformation of the economic development mode in the last year of 2010.