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Economics

كيف يمكن لشي جينبينغ تقوية الاقتصاد الصيني

Oct 10, 2022 Nancy Qian

شيكاغو- إن شي جينبينغ على وشك أن يصبح أول رئيس لثلاث فترات رئاسية في التاريخ الصيني وذلك عندما ينعقد المؤتمر الوطني العشرين للحزب الشيوعي الصيني في هذا الشهر وهذا يعتبر فرصة سانحة لتقييم سجل شي جينبينغ المتعلق بالسياسة الاقتصادية خلال السنوات العشر الماضية واستكشاف بعض الخطوات الواضحة من أجل تحسين الأداء الاقتصادي للفترة الرئاسية القادمة.

عندما تولى شي جينبينغ أعلى منصب سياسي في الصين سنة 2012 كان الاقتصاد مزدهرًا ولكنه كان يعاني من العديد من المشاكل الخطيرة. لقد كان الناتج المحلي الإجمالي ينمو بمتوسط معدل سنوي يبلغ 10% لأكثر من عقد ولكن كان التباطؤ حتميًا وبالفعل انخفض النمو في الناتج المحلي الإجمالي في كل سنة تقريبًا منذ سنة 2008، وعلاوة على ذلك كان عدم المساواة في ارتفاع حيث ارتفع مؤشر جيني بنسبة 13% بين سنة 1990 وسنة 2000 وبحلول بداية هذا القرن تجاوز عدم المساواة في الصين مثيله في الولايات المتحدة لأول مرة في حقبة الإصلاح التي أعقبت عام 1978 .

في غضون ذلك، كان التلوث يقتل الصين حرفياً وبحلول عام 2013 كان هواء بيجين يحتوي في المتوسط على 102 ميكروغرام من جزئيات بي م 2،5 لكل متر مكعب، في حين أن لوس أنجلوس - وهي مدينة معروفة تاريخيًا بتلوث الهواء فيها - كان لديها قراءة تبلغ بي م 2،5 لحوالي 15 فقط. لقد اشتكى سكان المدن الصينية بشكل متزايد من أمراض القلب والرئة والوفيات المبكرة المرتبطة بالتلوث كما اُبتليت الصين بتلوث المياه وذلك بسبب الجريان الكيميائي من مصانعها ومزارعها ومناجمها. أما في المناطق الريفية فلقد اضطرت قرى وبلدات بأكملها أحيانًا إلى الانتقال لأن إمدادات المياه كانت ملوثة بشكل لا يمكن إصلاحه.

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vic lai Oct 11, 2022

In Hyman Minsky's view, the Main-Street capital development of a country's economy can be "ill done" in two main ways : the "Smithian way" and the "Keynesian way."
The first refers to "misallocation" : the wrong real investments are financed by the country's government and financial system.
The second refers to an insufficiency of real investments, which leads to a level of aggregate demand that is too low to promote high employment.
After the latest Global Financial Crisis (GFC) of 2007-09 :
(a) in socialist China : it's mainly been ill-done Smithian capital development;
(b) in capitalist America (especially before the breakout of the Covid pandemic there) : it'd mainly been ill-done Keynesian capital development.
---
In China :
The previous and incumbent Beijing policymakers have been misguided by their economic advisers and so they have persistently used the wrong methods to urbanize their country --- the country's urbanization strive has been deeply flawed in the past decades.
China’s urbanization strive in recent decades has not been pursued strictly according to proven economic principles, but has instead been unfolding in a socialist top-down administrative hierarchical manner.
Since all animals in the animal farm should be equal, or so they think, a lot of scarce and precious economic resources in the country has therefore been deliberately directed to the development of the small- and medium-sized cities especially in the western and middle parts of the country.
But
(i) the ongoing natural trend of the country's population migration, and
(ii) mostly-self-liquidating infrastructure and other real investment projects,
both require that more economic resources should be directed toward the country’s big cities or city groups.
Instead of developing many small and middle cities evenly in every part of the country in an egalitarian manner, the Beijing leaders should instead have developed economically a group of strategic metropolitan mega-cities, or city groups, which are located in the strategically important parts of the country.
This correct urbanization strive should not be disturbed by the recent breakout of the Covid pandemic in the country.
---
- vic lai Oct 11, 2022
  
  Only in the large cities or in the city groups can agglomeration economies be fully realized, and in which most or more investment projects can become self-liquidating.
  People can interact with and learn from each other in an innovative manner only when they can live and group together en masse, and only in the metropolitan cities can high-end services be developed and profitably sustained in the coming decades.
  Today, especially in the small cities in the remote parts of the country, most expensive public investment projects there can have no hope of paying for themselves.
  ---
  Which means, in this country, what's really needed economically is not rebalancing from investment to consumption, but more well-done Smithian capital development.
  With much more the correct types of real investments, which means more future incomes and hence more savings left for both the workers and corporations in the country, there'll be enough household consumption spending in the future to sustain China's coming domestic-consumption-propelled economic growth.
  In China, metropolitanization ------ perhaps one of the Beijing new-policymakers' very few remaining economic Trump Cards ------ should be the name of the economic game in the coming years.
  If so, China's new policymakers can also successfully delay the eventual and sure arrival of the haunting specter known as the Law of Diminishing Marginal Returns.
  - vic lai Oct 11, 2022
    
    In America :
    The Presidents, many of the country's politicians and Congress people, and numerous scholars have been misguided by the Neoliberal Groupthink and Market Fundamentalism, which have much underestimated the effectiveness of fiscal policies in rapidly invigorating the domestic economy following the GFC.
    Most of those people have constantly been threatened by the imagined spectre of ever-rising government deficits and debts.
    As a result, fiscal austerity has persistently been pursued and the country's monetary policies, and hence the US Fed, has stolen most of the limelight of the macroeconomic stage both in the past decades and after the GFC.
    ---
    But monetary policies have not been very effective in ending quickly the "secular stagnation" in the western advanced countries, for at least the following reasons:
    (i) Suffering from balance sheet recession, the domestic economy doesn't have enough qualified borrowers that the domestic banks would like to lend to.
    (ii) The central bank's lowering of the nominal interest rate--- even to zero or a negative level --- tends to follow, rather than lead, the worsening performance of the domestic economy.
    (iii) Thanks to freer and freer capital flows across the globe, the lowering of the domestic interest rate, instead of stimulating more long-term domestic real investments, had led to more short-term capital flows out of the country, through arbitraging carry trades, in which much of the outflowing capital is just seeking much higher and quicker financial investment returns in the virtual economies of the rest of the world.
    ---
    - vic lai Oct 11, 2022
      
      After the GFC, the American government has still ignored the importance of persistently and massively using Keynesian expansionary fiscal policies to help the domestic economy to quickly recover --- she has instead mistakenly relied on the Fed's ineffective QE programmes to try to induce the country's private sector to borrow more at very low interest rates so as to spend and invest more, but mostly to no avail.
      Afterall, already highly-indebted economic entities shouldn't be further induced to incur even more debts than before --- they should more cleverly clean up their impaired balance sheets.
      Most of those people have been misguided by the mistaken Loanable Fund Theory, and the flawed Banking Money Multiplier, which are now still being taught in many popular university textbooks widely used in the country, not knowing that the country's commericial banks cannot lend out their excess reserves at the Fed to the private sector, no matter how many treasuries or MBSs the Fed buys from the private sector through her several rounds of QE programmes since the GFC---
      Even if the commercial banks can and want to lend out their excess reserves, they will fail to find enough qualified private borrowers in the market simply because most of the latter have still been busy licking their wounds during the once-in-a-lifetime balance sheet repairing recession.
      ---
      Which means, the US central government should keep deficit-spending much more than before, to
      (i) replace the country's obsolescent, deteriorating, and depreciating old infrastructures,
      (ii) help crowd-in more private real investments,
      (iii) help stimulate the domestic economy's aggregate demand, raise the GDP growth rate, increase further the country's national income, and so accommodate the private consumers' increased desire to both save enough and spend enough in the coming years.
      There is no secular stagnation in America as such --- only insufficient net government spending and hence insufficient Main Street net capital development.
      ---
      - vic lai Oct 11, 2022
        
        (i) Facing the Thucydides Trap, or the long productivity-enhancing Marathon Racing Game, between herself and China in the coming decades, instead of (or in addition to) doing whatever it takes to prevent China from catching up with her, the US herself should rather start running much more quickly than before, and doing so requires the country's ruling government to engage much more in well-done Keynesian capital development.
        (ii) It seems that, today, the US "entrepreneurial state," facing China's latest relative global lead in 5G communication and artificial general intelligence, among others, seems to have lost her own long-held full confidence of being able to propagate and hence lead the next round of industrial and technological global revolution under the sun, and such a new 21st century revolution is obviously a healthy positive-sum game for the world as a whole.
        Hence, the current relatively short-sighted ruling politicians in the country have chosen instead to instigate more and more local agency wars in other continents, and strive to gain as much as possible from such malicious and dirty zero-sum global geopolitical wargames.
        If this is not far from the truth then it's really too bad for the coming world as a whole.
        ---
        But the current ruling US elites should remain as self-confident as in the good old days, and choose instead to fully utilize the government-assisted well-done Keynesian capital development mentioned upstairs to keep benefiting the current and future human generations in the coming decades.
        Only by doing so --- turning once again the US federal and local governments combined into an innovative "entrepreneurial state" ------ will the US parents be able to tell their children and grand-children proudly and honestly in the future that their own country has remained the most important and unique power-generation plant of our world's non-stop civilization progress.
        ---
        
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vic lai Oct 10, 2022

In the aftermath of the breakout of the pandemic in America, the much-increased, vote-begging, and well-intentioned deficit-spending of the American federal government has mostly been in the form of de-facto transfer payments (and tax exemptions) delivered to the country's suffering households and corporations, enabling them to come quickly out of the pandemic relatively unscathed, with resulting pumped-up and so seemingly rather healthy balance sheets each of their own.
A potential great economic depression that would otherwise have developed in the country was therefore also avoided.
---
But the latest rather quick and seemingly healthy recoveries of the balance sheets of both the households and the corporations in the US, especially relative to that in most other foreign countries, was not caused by the truly-healthy and sustainable overall rise in productivities of both the labor and the corporations of the country, but rather mostly by the federal government's willingness to incur much more debts of her own than before, the new debts of which
(i) has mainly been financed by the Fed's new round of MMT-like new-money-printing QE, and hence the resulting time-lagged runaway inflation that's currently still haunting the country,
(ii) has not mostly gone to finance and bid up the sorely-needed long-term real investments of all kinds in the country's Main Street, and hence the relative lack of genuine rise in productivities of the country's labor and corporations just mentioned.
---
- vic lai Oct 10, 2022
  
  On the contrary, the Chinese central government has over the years mostly encouraged the country's local governments in various provinces, the state-owned enterprises, and the private and public real-estate firms, to incur ever more and more debts and deficit-spend accordingly (until recent years), which in turn have mainly been financed by the country's new-money-printing commercial bank credit creations, thereby
  (a) leading to a very substantial and quick rise in the country's money supply, and
  (b) helping creating China's world-famous economic miracle.
  Problems is, today, many of China's real investment projects have run into the inescapable problem of diminishing marginal returns.
  ---
  Also, unlike the macroeconomic situation in America especially since the sudden breakout of the pandemic there, China's central government has too-conservatively (or too-cleverly) remained under-indebted almost all the time, and so hasn't deficit-spent enough over the past decades and up until today, which in turn has therefore failed to much strengthen or repair the already-weak or impaired overall balance sheets of the country's households, local governments, and private and public corporations alike.
  Hence
  (i) the observed relatively weak Chinese household consumption spending over the decades, and
  (ii) the perennial economic problem in China of weaker and weaker aggregate demand (or, the other side of the same coin, more and more excessive productive capacities) over the past years, and also the country's lower and lower yearly real GDP growth rates that we are now observing, given also the weaker and weaker external global demand for China's net-exports both since the GFC and during the current global deglobalization trend.
  ---
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كيف يمكن لشي جينبينغ تقوية الاقتصاد الصيني

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