[Biweekly Symposium] No.368, The Rise of the State
Author:Unirule
Time：2008-08-29 14:13:06 Clicks:
Topic: The Rise of the State Lecturer:Prof. Chen Zhiwu Discussants:Prof. Mao Yushi, Prof. Cao Yuan Zheng, Prof. Sheng Hong, Prof. Li Shi, Prof. Zhao Renwei
This year is the thirty anniversaries of China’s reform and “opening-up”. Unirule, which has been working on enhancing the public understanding of the merit of an free economy since it was founded in 1993, hold a series of symposium on re-examining the gains from China’s 30 years of reform and “opening-up” in this June to September. Below it’s the proceedings of the fourth of this series of symposiums. At the 368th Unirule bi-weekly symposium, Prof. Chen Zhiwu, Professor of Economics, Yale University, delivered a speech entitled “Rising of the State”. Speaking on the topic “ The Rise of The State?”, Professor Chen shared with audience his recent research on the ways that the Chinese government manages its revenues, how the government continues to play a vital role in China’s economy, and how the pattern of asset distribution for China’s Central government compares to that of the US Federal government. His findings indicate that the Chinese government, not individual households, has been making the majority of the economy’s investment and spending decisions. Consequently, the Chinese economy is driven more by investment and less by consumption, and looks to be even more so in the future. Concluding his remarks, Professor Chen suggested that privatizing state-owned assets is the way to sustain China’s future economic growth, which has primarily been driven by investment and export until this point. According to the analysis of Professor Chen Zhiwu, after accounting for inflation, from 1995 to 2007, government revenues increased 5.7 times. At the same time, the per capita disposable income for city and town residents' only increased by a factor of 1.4, while farmers' per capita disposable income increased by a factor of 1.2. Tax revenue is only the most obvious parts of government revenue. In reality, the government is China's largest holder of assets, so as the country's economy has developed, the increase in value of government owned enterprises, public land, and mineral resources is greater than that of tax revenue. The speed of increase is also faster. More than 76% of assets in China are owned by the state, leaving the people with less than 25%. Counting allocable revenue from assets along with the 5.1 trillion RMB in tax revenue, last year the government's total allocable revenue was 15.7 trillion RMB.
As the above situation demonstrates, the reality of China today is that the country is rich while the people are poor. As Professor Chen Zhiwu points out, the biggest gap between the rich and poor in China today is between the state and society, not among the majority of the people.
