Tuesday, August 13, 2013

The economic development of China's three major mechanisms

Professor hu angang, said why Michael spence publicly acknowledged that western scholars and research institutions of China estimated that "all wrong"? This is because they only see the "digital China", but ignore the "mechanism" in China, only get used to the surface layer of research and technical economic model calculation, overlooked the economic development of China's unique mechanism of deep research and field survey. More cases, they are "only see local, not see all the, only see trees, don't see the forest". This and we advocate of "seek truth from facts" ideological line and materialist dialectics methodology is very different.

So, what is the mechanism of China's economic development? How did they live up to their role? Said hu angang, usually, pipe fitting 45 degree LR elbows in most countries, the development depend mainly on market mechanism, the mechanism of the entrepreneur as the main body of creating wealth, is supporting the government mechanism, service, and this is what we commonly see capitalism market economy system, despite the "American", "European style", "Japanese style" and so on the different type, there are also "Singapore", "South Korea", "Indian" emerging economies such as different types. And China is "unique".

China's development is a combination of three trends: one is the natural trend of development, the second is the macro planning under the guidance of market driven, three is the national development planning and strategic guidance. Our forecast for China's long-term development is to fully consider the three trends of organic connection, interaction and mutual superposition.

The first mechanism is a natural trend. It reflects the basic situation of China's development, the development stage and the development potential and limiting conditions, reflected the social main body, such as consumers, investors, producers of spontaneous demand and economic and social behavior, can is the objective trend of the observed 45 degree short radius pipe fitting elbows values. As many economic and social indicators as per capita income and per capita gross domestic product (GDP) growth trend and the change trend, it has nothing to do with the government's policy variables, but also known as the government to formulate development plan for important reference. We can use the scientific method for prospective prediction and calculation, also can find some reference from the international comparison, discover new trends from the international experience. From the perspective of Chinese culture, is to "go with the flow", follow the natural law, economic law, social law, including the international trend, "to help its natural" is possible.

The second mechanism is the macro planning under the guidance of market driving mechanism. Enterprises, whether state-owned enterprises or private enterprises, domestic enterprises and foreign enterprises, is the market main body, the subjects of investment, innovation, service main body, is the main body of social wealth, including the material wealth and spiritual wealth. The government will need to provide effective public service, good investment environment, the safety of production and living conditions, 90 degree pipe fitting long radius elbow thus reducing the external cost and risk of the enterprise; Make industrial development planning, regional development planning and industrial policies to guide and provide direction for the development of enterprise information, policy guidance, to overcome the blindness and anarchy; Making simple business registration yearly check system, market admittance threshold, the market competition rules and regulations, to ensure fair competition in the market, to avoid vicious competition, prevent monopoly competition; Set standards for environmental protection, health, health and safety standards, etc., to encourage the "fittest"; Low taxes, simplify the procedure of tax, arouse the enthusiasm of tens of millions of enterprises and individual industrial and commercial households and entrepreneurial skills.

The third mechanism is the national development planning guidance. This is the government through the rational allocation of public resources and effective use of public power, to influence the index of the actual development trend, promote its development speed (encouraging index), or to limit its development trend (binding forces), it reflects the government planning and the visible hand.

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