A few days ago, Dean of the National School of Development of Peking University and Boya Distinguished Professor Yao Yang published an article on NetEase’s “ Finance and Economics Think Tank ”, talking about the current economic situation and the best strategy to promote economic recovery , with sharp views and harsh advice !
The following is an excerpt from the full text:
The current unemployment rate is high, and under the circumstance of heavy economic downward pressure, the expectations of various employers will not be good. When expectations are not good, recruitment will be slower, and even layoffs will occur.
There must be some means to stimulate the economy. Now when it comes to stimulating the economy, the only thing that can be done is government investment. Over the years, at least since the global financial crisis , every time encounters a problem, it is government investment, and it seems that they will not do anything else. I think we need to change our way of thinking, we need all-round stimulation and investment, but don’t ignore consumption.
The best way to stimulate the economy is to find gold. Give cash to those who are unemployed, low-income, or directly to the bottom 50% or 30% of the population.
Over the past 40 years, although our service industry has developed greatly, in the minds of many officials and scholars, it is still impossible to mention consumption. If we want to raise consumption, we will raise lazy people. We can't afford it. We are still a developing country and we need to focus on production.
Many investments in China are actually consumption-oriented. For example, our high-speed rail is mainly used to transport people, not goods. But China's high-speed railways are all loss-making. I don't know how much debt Railway Corporation has now. Two years ago, it was five trillion or six trillion yuan.
It is right to build high-speed rail, and it is right to build subways, but it is wrong for ordinary people to consume immediately. This thinking is wrong. Moreover, the repair of this kind of infrastructure requires continuous investment in maintenance, and long-term maintenance costs must be considered. Why do we have to build so many high-speed rails? Many high-speed rails do not have many people on them, and they are all wasteful. Then why not increase the immediate consumption of ordinary people?
Appendix: Profile of Yao Yang
Yao Yang, 1986 graduated from the Department of Geography, Peking University, with a bachelor’s degree, in 1989, from the Management Science Center of Peking University, with a master’s degree in Economics, and in 1996, graduated from the University of Wisconsin in Agriculture and Applications Department of Economics, Ph.D. in Development Economics. Now he is Peking University Boya Distinguished Professor, Peking UniversityNational Development InstituteDean, Peking University China Economic Research Center Director, Ministry of Education Changjiang Scholars Distinguished Professor (2016), Executive Dean of Peking University School of South-South Cooperation and Development. The main research fields are China's economic development and new political economics.
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