How to government of the people from the state

 How to government of the people from the state?
Mm interview with Chen Zhiwu, finance professor at Yale University
Source: South Wind Reporter: China's state-owned assets Zhaoling Min
reform began in the early 1980s, from the initial contract system, smashing debate and reflection have never stopped, and in 2004, , mostly concentrated in the state, private which is more efficient, and reform of state-owned assets will lead to loss of state assets and so on. But how to implement a fundamental absence of national asset on behalf of talk about the issue.
2007 since the end of the year, Yale University Professor Chen Zhiwu on several occasions called for the state-owned assets equally to the people, to make people share the fruits of reform and opening, in order to increase the people's assets, income to boost domestic demand, causing the public focus .2008 August, journalists in Beijing on relevant issues and Professor Chan made a communication.
reform of state-owned assets Mistakes
, you have any comment on the reforms in this area?
Zhiwu: In the past 30 years, the wealth of state-owned assets, the overall effect is positive. particularly with India, the Chinese social wealth concentrated in the hands of the situation in the country , can quickly mobilize a large number of resources, focus on the development of industrial capacity, infrastructure and so on. but not by India at both sides of the situation, they are not well-developed capital markets scattered private resource mobilization, pooling, and no resources state, so when you want rapid development of infrastructure in India to speed up construction of industrial capacity, their ability to mobilize resources more than China can not follow. Thus, after the development of state-owned system for the rapid catch-up in China, has played a positive role .
But today, the reform of state-owned system of government of the people has not accelerated to die. We can not always invest and build factories, roads, build buildings, to the neglect of consumption, and is now a serious excess of industrial capacity. Now obstruction the bottleneck of economic growth is the lack of consumption growth, rather than lack of industrial investment. In the past we always put the behavior.
the total for the previous edge in the subsistence agricultural society, low production capacity has been the bottleneck of economic development, the kind of production capacity is not the problem, the key is where to find more consumer demand to meet the capacity expansion.
Therefore, in the past from the perspective of the efficiency of state-owned enterprise privatization Why do we talk about, but today, we must From the wealth of the state or the people, who better to promote growth in domestic consumer demand, and who better to promote economic model to consider the next point of transition, the direction of reform issues.
government of the people in the productive assets of society, people from the two types of channels share the benefits of economic growth, first by the rise in labor wages, and the other is through property appreciation. That is why, despite the United States between 1998 and 1999 GDP growth rate of only 4%, but a piece of the entire economic and social prosperity. But In China only the GDP growth rate of over 9%, the community can experience the prosperity of the people is almost as limited only by rising wage share benefits of economic growth.
Seventeenth report referred to the property of the people to increase income, the policy will very good. but, under the state system, the people lack access to basic property rights of income from property. Therefore, I think, of the people of the reform is to achieve the objectives proposed by congress fundamental step is also necessary step.
economic restructuring, one of the core of the reform is to implement the owner of state assets to state ownership in the people's consumption growth will be more strong, further growth in domestic demand have a specific property basis.
strategy, but not of the government of the people is difficult to improve efficiency, how to resolve this contradiction?
Chen Zhiwu: finance, oil, defense and other industries rests in private hands would endanger national security, I do not see it. Take the oil industry situation, because the days of monopoly over good, and the enterprises for technical innovation is no power, no power to find alternative sources of energy in the long term, making the future of people's livelihood even more unsafe. in human history, lazy, do not think aggressive than the losses caused by any physical damage, but people do not see it.
in construction machinery industry, Sany, Zoomlion are the people, private enterprises, owners are private, they a threat to national security? contrary, the continuous innovation of these enterprises, the Chinese construction machinery industry, more and more overwhelming international competitiveness.
in the United States, defense and national security is directly related to this industry, but also entirely in the private sector hands. U.S. defense procurement, from fighter jets to the Patriot missile, by government to Boeing, Lockheed. Martin and other private sector procurement, and even war in Iraq, there have been many private security companies contracted to do by the military war service. never heard of these companies have threatened U.S. national security situation. driven by the interests of private enterprises, higher efficiency, better management, which is what the industry is so.
the experience of privatization and government of the people of Lessons
Privatization is the rich-poor divide and social injustice synonymous. What is your comment?
Zhiwu: it is precisely the outcome of the privatization of Russia is not complete, due to unchecked power of .1992 to 1994, Russia's first private of the distribution of government to each citizen 1 million rubles denomination voucher privatization, vouchers can be purchased corporate stock or investment fund shares, transfer or sell can be paid tens of millions of Russians became shareholders.
this that, because of inflation, some people make a living selling the voucher privatization, upstarts and managers took the opportunity to buy cheap, privatization securities to focus on their hands. But this part of the ratio is not large, but also because the Russians were No experience of the securities, that these things of little value, not worth the money.
reason why the privatization of Russia's widely criticized, the problem lies in the privatization process from 1992 to 1994, many key state-owned enterprises 40% government-owned equity to continue, so, in essence, these companies continue to be state-controlled enterprises. By 1996, these enterprises have emerged financial crisis.
At that time, Russia is facing presidential elections, Boris Yeltsin to re-election, but at this time of economic situation is not good, enterprises generally poor management, little government revenue. The Government's predicament way to the enterprises can not repay within a few years, lenders took over the personal nature of state-owned shares to become the business owner. In actual practice, although there is also bidding, but the insider trading seriously.
minority lending to businesses, then and caused by business managers conspiracy operating properly, unable to repay, in effect forcing a large number of state-owned enterprises fell to a very low price private hands, which produced some wealth oligarchs. this approach a bit like a few years ago, are engaged in domestic state-owned MBO.
So oligarchy of wealth in Russia is not privatization vouchers, but by then the . Czech Republic is also the issue of privatization vouchers, the state-owned assets will be divided equally to all citizens, citizens can buy shares of public enterprises can also be put to the privatization voucher investment fund, as fund shareholders.
privatization voucher funds to buy companies with shares return on investment, and then again into civil bonus coupon privatization. investment funds became the major shareholder of the enterprise, so that to solve the situation of fragmentation of enterprise shares. the privatization of the Czech Republic is very thorough, did not leave the state-owned shares , it does not leave any such Eastern European countries.
China's current level of public ownership is often in the real control of social resources of a small number of people, make money, blatant excuse to carve up the state-owned assets. In theory, the people of the name of the owner, in fact, the owner can not exercise rights, neither the use of state assets, management and distribution of voice and supervision, can not add value from the profit of state-owned assets. To this day, or even a list of state-owned assets are not, not to mention by independent audit firm audited financial statements of state-owned enterprises, to the people to see.
So, I'm not talking the privatization of the traditional sense, but to the state-owned enterprises ; as the identity of property owners to implement. In the past, The real br> Zhiwu: engage government of the people of China today, relatively better than the original Russian, Czech Republic, many of the conditions are ripe. Russia, the Czech Republic at the time the people of stocks, bonds, funds did not understand the value of the shares, nor any practical experience. I University of Defense Technology in 1986 to work at school, teachers forced to buy treasury bills each month, part of the wages paid directly to the form of treasury bills. I had no knowledge of the securities that it has no value, the same paper, so readily give others. I was on knowledge and attitude about bills and Russia, the Czech voucher privatization of people's understanding and attitude almost.
But now, China's situation is different, the Chinese people full stock, the fund account is more than one hundred million Members of the stocks, funds and other securities has been more fully recognized, although many issues of market regulation, but the regulatory framework already in place, there are nearly 18 years of experience. pursue government of the people of China than the original Russian, Eastern European people have much more experience, at least to get government of the people will not drink of the case for fund shares.
? political reform and government of the people the question of whether there has?
Zhiwu: the lack of power in a society where democratic supervision, the more need is government of the people, let the lack of checks on government power does not corrupt the asset base.
because the government of the people of not just an economic issue, you can also play in the political constraints on the effect of government power. state system so that the people affiliated with government power, while the government of the people the system is constrained in favor of Establishment of government power, because most people With property assets of wealth in particular, will increase the size of the middle class, people realize their aspirations value of the property will be more intense, rights awareness will increase, will be more confidently monitor and challenge of power.
Therefore, present a fundamental breakthrough in political reform is difficult under the premise of the reform of the government of the people may be able to raise another point of view of democracy in China.
of the limitations ?
Zhiwu: a national, private and public where the boundary should be in the end, depends on the following factors:
The first is the country's institutional framework, whether there is a high level of democracy and judicial independence. these areas The higher the degree of realization of the higher level of support of public ownership, brought about by state ownership is lower agency costs, the wider the more the boundaries of public ownership. Only when the citizens of the state-owned assets, possession, use, disposal, have full oversight powers, it may reduce agency costs. This level of democratization of politics makes high demands.
followed by the number of the population. Singapore, Sweden, Denmark, a small country can engage in public ownership, because these social only a few millions of the population, a high degree of homogeneity, so that managers and information asymmetry between the peoples of the relatively low level agent in the process of reducing moral hazard.
like China, population 1.3 billion power, the complexity of state-owned asset management over people's imagination, agency cost far more than any of the benefits of public ownership can bring. Of course, one way is to create a huge bureaucracy to manage the public assets of 1.3 billion people, but the number of bureaucratic more information and resources at an advantage, not only moral hazard will be surprisingly high, and let the people at a disadvantage in the game.
again is with a country's level of development, development stage. In China needs high-speed industrialization, need to build a huge infrastructure network period, the economy driven by investment, then the proportion of state-owned economy can be higher, which is conducive to the concentration of investment resources is conducive to rapid industrialization. However, once the industrial development of mature, even excess capacity, high proportion of state assets, it will cut economic growth in the community can generate the wealth effect and hinder the growth of domestic consumption, is not conducive to investment-driven economic model from the transition to consumer-driven. Therefore, industrialized society, the state-owned economy weight must be reduced, its borders should be narrow, otherwise, will hinder further development.
national interests of the Fund's operating
at the operational level, how the state-owned assets in the government of the people of the specific practices, what are your ideas?
Zhiwu: a model for reform with a per capita, fair and transparent as possible put an end to trade power for money.
Theory on the specific approach that is: about 150 central enterprises formed the national interests of the Fund at the national level, 31 provinces, autonomous regions and municipalities have set up their own citizens based on local state-owned property rights and interests of the Fund, including the jurisdiction of the state-owned assets. so there are 32 national a national equity funds exist.
then, to all citizens an equal share of the national interests of each coupon by the number of people willing to spend the price voluntarily decide to buy other people's national rights and interests of the Fund's shares. of course, may or many people choose to buy the country, Guangdong, Shanghai and other developed areas of the civil rights fund shares, some people may also buy Xinjiang, Shanxi and other places of energy resources civil rights fund shares, then the national interest in these areas will increase the Fund's share price. This the formation of a competitive situation, the national interests of the low price will find ways to improve fund management level and efficiency.
2006 by the end of the net assets of state-owned enterprises worth about 13 trillion yuan, about 10,000 yuan per capita, GDP, if current growth rate of 10% of the total, per capita income from property, there each year 1,000, a family of three would increase the cash flow of about 3,000 yuan, which is sure to stimulate domestic demand is very helpful.
The key is Only the people in the past the basic wage share of this single channel benefits of economic development. It is through the government of the people of the reform, opening asset appreciation benefits of economic growth in this channel to share the time, this is a fundamental reform of the liberation of private consumption. In addition the state-owned economy will depend on investment by export-driven growth, and if you want to rely on domestic consumption-driven growth, we must first government of the people of property rights.
Now, the government of the people of the reform is only the choice of timing problem.