Driving Economic Growth: Institutional Pformation Is The Basis For Development And Pformation.

The pformation of economic growth mode or the pformation of economic development mode is not a new slogan and new requirement.

Starting from the Ninth Five Year Plan of -2000 in 1996, the request for achieving this pformation was put forward, but the implementation of most of the time was very unsatisfactory.

The crux of the problem is that the pformation 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 pformation of the Soviet Union, pointing out that the pformation of the system is the basis for the pformation of the growth mode.

Therefore, the "95" plan stipulates that "two fundamental changes" should be realized: one is the change from the extensive growth to the intensive growth, and the other is the pformation of the economic system from the planned economy to the market economy.

During the "95" plan of -2000 1996, the market orientation reform was carried out in an all-round way due to the implementation of the the third Plenary Session of the 14th CPC Central Committee decision in 1993.

The pformation has also made some achievements.

However, during the "fifteen" plan of -2005 in 2001, the acceleration of urbanization accelerated the fact that the governments at all levels greatly increased the land and other important resources they had grasped in the Chinese system. Therefore, a large number of government led investment in heavy chemical industry appeared in many places.

As the government has led the allocation of important resources, the pformation 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 pformation 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 pformation of the economic development mode in the last year of 2010.

As long as the right measures are taken, systemic risks can be avoided.

I think there are many measures that can be taken, including:

First, stop ineffective investment in projects that are too low or unrewarded.

Now there is a popular saying that infrastructure construction does not need to consider whether there is any return in the near future, because things will be useful sooner or later.

This is not a way of thinking about economics.

One of the most important premises of economic considerations is the scarcity of resources.

Since resources are limited, we can not do that, so we must choose when we invest.

We can only do what is best and most needs to be done.

In this regard, we should learn from Japan's lessons in this regard.

After the lack of domestic demand in 1986, the Japanese government launched a large-scale investment plan for public infrastructure in order to boost economic growth.

It is a large number of ineffective investments that form the basis for the subsequent collapse.

Second, the use of state owned

Repayment of state contingent liabilities.

The term "contingent liability" refers to a debt that is not recorded on the balance sheet but must be repaid sooner or later.

At present, the most prominent is the gap of social security fund.

According to the calculation, the social security arrears of the old workers are as high as several trillion yuan.

And paying back such debts early can not only reduce the pressure of debt repayment, but also create a more effective form of public ownership.

For this reason, the the third Plenary Session of the 18th CPC Central Committee decision clearly stipulated that some state-owned capital should be appropriated to enrich the social security fund.

This decision should be implemented as soon as possible.

Third, we must stop pfusion of zombie enterprises.

Now there are some local governments that use loans, subsidies, tax relief and other means to maintain some enterprises that are simply unable to revive their lives.

The government is not giving full play to its social functions to help solve the difficulties brought by enterprises' discontinued production to employees, but to support such zombie enterprises to continue to meaninglessly waste social resources. This will only increase the accumulation of financial risks, but will not bring any benefits to the society.

This is also a lesson left by the Japanese government in the economic downturn.

Fourth, we should carry out bankruptcy liquidation of insolvent enterprises or reorganization under bankruptcy protection so as to release risks and turn large earthquakes into small ones, so as to avoid risk accumulation and cause large earthquakes.

Fifth, stop funding from the government and implement a rigid payment of 100% so as not to increase moral hazard.

Sixth, make efforts to revitalize.

Due to over investment and extensive growth in the previous period, a large number of "dead assets" formed in various parts of the country, such as the "Sun basking" Development Zone, the "dead city" that stretches for several blocks, and so on.

Although there is a certain degree of difficulty, efforts should be made to revitalize the balance sheet and reduce the possibility of "Balance Sheet Recession".

In addition to the above loopholes, release

Measures should also be applied flexibly in fiscal policy and monetary policy for short-term adjustment.

The comprehensive application of these two measures enables us to maintain macroeconomic stability, avoid systemic crises, and strive for time to promote reform, so that reform and development will gradually enter a virtuous circle.

Based on the above analysis, the policy we need to adopt in the current circumstances should focus on promoting reform under the condition that measures are taken 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 pformation mode, and establish a new normal consensus that is supported by higher efficiency.