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Zhou Tianyong: The key to supporting China's economic growth is these 800 million people

Source: Sina FinanceTime: 2019-07-23

科创沙龙”于7月21日在上海举行。 Sina Finance News "The second quarter of 2019 macroeconomic situation analysis meeting and Lujiazui Science and Technology Salon" was held in Shanghai on July 21. Zhou Tianyong, director of the China Strategy and Policy Research Center of Dongbei University of Finance and Economics, and former vice president of the Institute of International Strategy of the Central Party School (National School of Administration) attended and gave a speech.

Zhou Tianyong emphasized that the key to supporting China's economic growth lies in the 560 million rural resident population and about 240 million urban non-hukou population. "It is necessary to increase their income, increase their spending power, and curb overproduction and economic recession. "Without raising the income of this part of the population, and not vigorously carrying out related reforms to increase the income of residents, all short-term measures and policies are useless and will not reverse the trend of continued economic decline."

The following is the speech record:

Zhou Tianyong: Customs export data, the growth in January-February was very strong, and then rose after May. Exports in June increased by 6.1%. Exports are slightly better expected. The overall economic growth, from the speed of 2014, the lowest in the second quarter to 6.2%, is on a downward curve.

In 2006, when the ratio of exports to GDP was at its highest, it was as fast as 36%, and then fell. It dropped to about 18% last year. At present, developed countries, especially the United States, are not willing to demand so many commodities from China. Some late-developing developing countries have squeezed China's exports in the markets of developed countries. China is now experiencing two squeezes.

How to do? Must support domestic consumer demand. However, consumption and income are related, especially the consumption of residents. If there is no income, or if income growth is not satisfactory, there will be insufficient consumer demand for payment. Therefore, when we talk about consumption, we must talk about consumer demand with ability to pay.

In terms of income, the per capita disposable income of residents nationwide was 15,294 yuan, urban residents were 21,342 yuan, rural residents were 7,778 yuan, and urban residents' per capita consumption expenditure was 13,565 yuan. In 2017, the urban residents' income consumption rate was about 67%, and now it is 63.56%. The consumption of rural residents was 6310 yuan, and the income consumption rate was 82%.

In terms of the proportion of residents 'income to GDP, in the first half of the year, the total GDP was 45 trillion, and the proportion of total residents' income to GDP was 47.48%. Generally, in a country with a development level like ours, the income of residents should account for 60% -65% of GDP. Departure from the standard value by 12-17 percentage points. It shows that GDP is either railway, highway, or machinery and equipment, but residents consume less.

From the perspective of GDP distribution, Chinese residents are divided less. Household consumption accounts for 32.07%, which is generally 50-55% internationally, a deviation of 18-23%. Even if South Korea has a relatively high capital accumulation, it is still more than 10 points higher than ours. What are industrial products? Now they are street lamps, streets and other things.

In the first half of the year, our industrial capacity utilization rate was 76.15%, and the surplus was about 563.7 million yuan.

What is particularly interesting is that the property income of urban residents was 2,209 yuan in the first half of the year, but the property income of rural residents was 217 yuan. The urban residents were more than 10 times the rural residents, and about 12 times the previous two years. Zoom out. The income consumption rate of urban residents in the first half of the year was 63%, compared with 67% in 2017, indicating that the income of urban residents is increasing. The income consumption of rural residents was 82% in 2017, and it became 83% in 2018. This year, it has dropped to 81.13%, indicating that farmers' income will increase in 2019.

Let's analyze the income of urban and rural residents by the three-point method again. The Bureau of Statistics only sees the disposable income per capita of urban residents and the disposable income of rural residents. But in fact, some of them are in the middle tier, with about 240 million non-registered urban population.

According to our current household registration rate, the urban registered population is 602 million. Their per capita disposable income was 21,342 yuan in the first half of the year, and the total income of urban residents was 14,104.42 million yuan.

There are 238 million non-hukou residents in cities and towns, multiplied by their disposable income of 12,402 yuan, and their total income is 29.518 million yuan.

There are 560 million rural resident residents, and their per capita disposable income is 7,778 yuan, and their total income is only 43,556 trillion yuan.

About 43% of household registered residents earned 14 trillion yuan in the first half of the year, but non-registered residents registered 238 million plus 5.6, which is nearly 800 million, and the total income was only about 7.3 trillion yuan.

The income gap between urban household registration residents and urban non-hukou residents and rural resident residents can also be estimated from the residents' consumption of the three-point method. The income of urban household registration residents is multiplied by their consumption rate. Urban non-hukou residents plus the income of 560 million rural resident residents multiplied by the consumption rate, and 800 million people spent 560 million yuan on consumption.

From the perspective of the five equal income groups in 2018, the income of 20% of high income is 19 trillion. 20% of middle- and high-income people earn 10 trillion yuan, 20% of middle-income people have less than 6 trillion yuan, and 40% of low- and middle-income people have a total of 560 million people and their total income is less than 58,000 100 million yuan.

What exactly? The consumption conversion rate of investment has dropped from about 40% in the 1980s to about 20% now. In the first half of the year, the investment space in the industrial sector was limited due to excess, which only increased by 2.9%.

Local government debt risk. After local borrowing is standardized, local investment capacity declines. There is uncertainty in the trend of real estate investment. Private investment is lacking. Overseas investment in China is uncertain. Exports also have difficulties and uncertainties. The rest is population. The declining population, the shrinking and aging population of the main economic force are under long-term pressure on consumption growth. It may lead to the normalization of surplus, which will cause economic growth to decline for a long time.

The opportunity to support our growth lies in raising the income level of 800 million people (560 million rural residents and 240 million urban non-hukou population). To increase their income, increase their spending power, curb overproduction and economic recession . All short-term measures and policies will be useless without raising the income of these residents, and will not vigorously carry out related reforms to increase the income of residents. They will not be able to reverse the downward trend of the economy.

The key is that there can not be so many exports. Later developing countries are competing for international export markets. If their consumer demand can no longer be met, the economy will not be able to support it. The key is whether the income of these 800 million people can be increased.

So, how to raise their income level? The key to increasing the income and expanding consumption of rural residents and urban non-hukou residents is the interactive integration of rural land system reform and urban and rural population factors. Since the reform and opening up, 8,500 mu of land has been transferred from the rural collectives in the urban built-up areas. Since the local government paid land use and bidding in 1998, the transfer income has accumulated a total of 43 trillion yuan up to last year. How much has it been given to farmers? I estimate that there is no 3 trillion yuan. Because the arable land in the countryside is tens of thousands of yuan, the average price of land auction last year was about 2.7 million acres.

After the reform of commercialization and marketization of urban housing, many urban residents have accumulated real estate wealth to varying degrees, and farmers have their own cultivated land, forest land, and residential land that cannot be traded or capitalized and put into operation. There is almost no wealth in value.

The government also did not provide infrastructure for rural residents. I went to the countryside to investigate. Farmers said that I could not build toilets. Why not? Without manholes and sewage pipes, we built a toilet, and the local government demolished it in violation of construction.

I think it's time to leave the land income to the farmers and build a unified and equal urban and rural competitive land market. To provide peasants with property income, there must be constant production and perseverance, and a series of capital, labor, and other factors between urban and rural areas must flow in both directions. This is what the central document and the central leadership talk about.

Arable land and forest land can be traded to form family farms and forest farms, and construction land indicators and cultivated land red lines can be abolished. The shortage has led to a planned economy, which in turn has led to more shortages of cultivated land, construction land and food. I don't think that unless the construction land indicators and cultivated land red lines of natural resource management departments are abolished, China's rural areas, agriculture, farmers, and real estate will not be peaceful for a day.

New rural and suburban communities such as one-family construction, dual-use, joint-row, and multi-story construction should be developed. The government stared at the construction site, demolished the peasant's yard, and let the peasants go up to high-rise buildings. Now China has become a country of crazy construction of high-rise housing. In South Korea and Japan, people are all courtyards, and many villas. We seem to have a deep hatred with the villas. When we see the villas, we are afraid and we need to demolish them. When the peasants become rich, they are farmhouses and villas. We will not let the villas be built. We demolish the low yards, free up land construction land indicators, and take them to real estate developers. The land is too expensive. Finally, the developers said it was too expensive. The local government has continuously adjusted to high standards. The original 20-story, 22-story, rising, and finally the country is full of dozens of high-rise houses. There is no micro-business, micro-employment, micro-entrepreneurship, micro-community, and eventually a universal high-rise slum.

Urban household registration is fully liberalized, providing fair education and other public services, and providing low-rent housing. Urban funds can go to the countryside, and urban people can go to the countryside to buy homesteads. Some rural people have worked in Shenzhen for ten or twenty years and their houses have collapsed and cannot be sold. This is not a market economy.

Promote the reform of the land system, the reform of the household registration system, and public services to enrich farmers and allow them to have income. In general, it is necessary to increase the income of 800 million people to strengthen their ability to pay for consumer demand, purchase industrial products, and alleviate or even eliminate overproduction. Employment and entrepreneurship should be encouraged in both urban and rural areas. There is also a word called "home ownership" here. People in the city can "home ownership". A large courtyard in the countryside does not allow "home ownership"? Now, under the premise that the collective ownership is unchanged, farmers need to have land use property rights, which can be traded, leased, purchased, mortgaged, inherited, and constructed. Land has changed from the means of living and production to valuable assets. We should call them from the proletarian. It is now about to become a property owner with land assets. In a socialist market economy, it is wrong for farmers to be proletarians.

Promoting land reform, opening up and invigorating, enriching low- and middle-income people, buying industrial products, and maintaining a certain economic growth rate, we must cross the middle-income stage and enter the ranks of high-income countries.

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