Highlights

MAO Yushi Voted Fourth in Prospect’s World Thinkers 2014

As the results of a poll for “World Thinkers 2014” by Prospect, a British magazine, came in, MAO Yushi, Chinese leading economist, Honorary President of Unirule Institute of Economics, and President of Humanism Economics Society, was voted among the top ten thinkers of the world in 2014. Among the top ten, MAO Yushi ranked fourth, followed by Nobel Memorial Prize laureates in Economic Sciences Amartya Sen and Daniel Kahneman.
According to Prospect, massive votes came from Twitter and Facebook accounts all over the world.
Prospect admitted that this poll was merely a scientific way to assess one’s contribution and no simple judgment should be drawn from the data of votes considering the apparent influence of India media’s interest in the poll itself. However, the top 5 thinkers, namely, Amartya Sen, Raghuram Rajan, Arundhati Roy, MAO Yushi, and Kaushik Basu, made significant contribution to the world as their work focused on the challenges and various facets of the world economy. For example, whether it is totalitarian politics and rapid economic growth with Chinese characteristics, or India’s attempt to share the newly gained wealth, such questions are closely linked to the livelihood of those living in developed countries and the growing pains of the developing world.
The financial crisis and its complications in the once-called “first world” was the topic of two winners: Pope Francis, who maintains a skeptic attitude towards capitalism, and Ha-Joon Chang, an economist from Cambridge University who attempts to restore the old traditions of political economy by criticizing his peers’ delusion for abstract mathematical models.
85-year-old economist MAO Yushi, who ranked fourth in the list, is “one of China’s leading economists and an outspoken advocate of wide-ranging policy reform.” He is also, according to Prospect, “highly critical of the neo-Maoist left.” He is the author of 18 non-fiction books, including bestselling Economics in Everyday Life, which aims to explain to the public the principles and functions of a market economy. The global impact of his work was recognized when he was awarded the Cato Institute’s 2012 Milton Friedman Prize. MAO Yushi is also the President of the non-governmental organization Humanism Economics Society.
The top 10 world thinkers 2014 include: Amartya Sen, Nobel Prize winner in 1998; Raghuram Rajan, Governor of the Reserve Bank of India; Arundhati Roy, female Indian writer; MAO Yushi, Chinese economist; Pope Francis, the 266th head of the Roman Catholic Church; Kaushik Basu, Senior Vice President and Chief Economist at the World Bank; Mary Beard, a professor of classics at the University of Cambridge; Peter Higgs, 2013 Nobel Prize winner in physics; Ha-Joon Chang, a South Korean economist; and Daniel Kahneman, 2002 Nobel Prize winner in economics.
Prospect is a monthly British general interest magazine, specializing in politics, economics and current affairs. It has gained general attention since its creation in 1995. Since 2005, it has been managing polls for top 100 figures in various areas in order to promote ideas and conceptions in various countries and areas of studies. 2014 World Thinkers covers experts in various areas, such as physics, psychology, economics, and philosophy.

See original article by Prospect:

Current Events

The Fifth UCERC Saloon Held in Zhengzhou

March 29, 2014, the fifth Unirule China Entrepreneur Research Center Saloon was held in Zhengzhou, Henan Province. The theme of this saloon was “Internet Finance and the Opportunity for Private-owned Banks”. This saloon was joined by famous economist Professor WANG Guoxiang; Professor ZHANG Shuguang, President of Unirule Academic Committee; Professor FENG Xingyuan, Deputy Director of Unirule and Director of UCERC; and Mr. WU Qing, Deputy Director of Bank Research Room at Development Research Center of the State Council.

Professor FENG Xingyuan gave the opening speech on behalf of UCERC. He stressed the role of “friend of thoughts” played by UCERC for Chinese entrepreneurs and introduced UCERC’s recent work. Four guest speakers gave 30-minute speeches each and around 300 participants attended the event.

In the keynote speech on “China’s Macroeconomic Trend and Internet Finance” by Professor ZHANG Shuguang, he emphasized four important aspects. Firstly, the structural problems of China’s economy are eminent as the investment-led growth pattern is not sustainable and there is a problem of over-capacity. Secondly, new urbanization is an important path for urban development in China as it opens market for the reallocation of resources. Thirdly, institutional arrangements should be made to improve citizens’ livelihood. And to do this, a starting point could be reform of the taxation structure. And lastly, financial innovation and regulation have always been developing hand in hand.

Nowadays, China Banking Regulatory Commission has approved only five private-owned banks, which is far from being sufficient for real financial reform. Financial reform cannot be completed without breaking financial monopoly.
What’s more, on the development of Internet finance, Professor ZHANG Shuguang pointed out that there is strong technological support and large market demand for Internet finance. What differentiates it from traditional finance is that Internet finance is a kind of commonly benefiting finance which achieved in a couple of years what took traditional finance hundreds of years to achieve. This could be good to break the financial monopoly. Online and offline financial services should be combined to compete with traditional finance. (For more information)

Unirule Invite Professor HE Weifang to Speak at Gengdan Institute

April 9th, Professor HE Weifang was invited by Unirule Institute of Economics and Gengdan Institute of Beijing University of Technology to speak on “Tradition of Governance and China’s Constitutionalism”.

Gengdan Institute of Beijing University of Technology is in long-term strategic partnership with Unirule Institute of Economics. In order to provide a theoretical and academic platform for the students and teachers at Gengdan Institute, Unirule has been working together with Gengdan Institute to invite famous scholars to speak at the Institute.

As Professor HE Weifang started his talk, he said, “constitutionalism is an attempt to contain power. As long as there is power, there is the need to contain it.” He then introduced the core problems, i.e. why constitutionalism is successful in some countries, but a complete failure in some others. As China adopted the system of prefectures and counties long ago (the system of local administration took shape during the Spring and Autumn Period and the Qin Dynasty), why China did not go on a constitutional path is a question worthy of attention. (For more information)

The Third Unirule Mentors’ Meet for Western Classics Reading Circle Held in Beijing

April 12, 2014, the Third Unirule Mentors’ Meet for Western Classics Reading Circle was held in Beijing. This meeting was held by Unirule China Entrepreneur Research Center (UCERC). Joined in this meeting were Mr. LIU Junning, researcher at China National Academy of Arts, Professor MAO Shoulong, Executive Dean of Academy of Public Policy from Renmin University of China, and Professor WANG Jianxun from China University of Political Science and Law.

During the meeting, questions were collected from the audience on John Locke’s Two Treatises of Government. The three mentors answered with comments and reference from real life cases.
At the end of the meeting, Professor WANG Jianxun gave suggestions on the Federalist Papers, which would be discussed on the next meeting. (For more information)

Press Release of Unirule Macroeconomic Report of the 1st Quarter of 2014 Held in Beijing

On April 23, 2014, Unirule Macroeconomic Report of the 1st Quarter of 2014 was held in Beijing at Unirule Institute of Economics. China Reform (Internal), Business Sohu.com, China Times, China Economic Herald and another ten newspapers and media were present at the press release. Professor ZHANG Shuguang introduced the report on behalf of Unirule research team and answered questions from the press.

Professor ZHANG Shuguang pointed out that “GDP in Q 1 of 2014 increased by 7.4%. GDP growth maintained stable with a little downturn. A decrease of 0.1% from the goal set by the government is witnessed, which is a positive result from the restructuring. The economic growth maintains stable, which means policy pivoting should not be focused on investment, but on solving structural problems. The decrease in M2 growth is a result of the Internet financing. The M2 growth rate is higher than the sum of GDP and CPI growth, which is inherent to historic data. It does not mean China is going through a Debt-Deflation process. It cannot be employed to support policies that constrain the development of Internet financing. Finance plays an important role in economic development and modern governance. The government has accumulated too many financial resources, and the financial structure is far from being balanced. Besides, with the state-owned enterprises expanding and taking over many resources, the government’s role in financial resource allocation becomes more and more prominent, which requires the government to pivot towards more efficient resource allocation and restructuring to push forward market-oriented reforms.”

News

Unirule Meeting with Financial Times Chinese

Current Researches/ Consulting

Theoretical Research and Reforming Solution on Opening the Markets of Crude Oil and Petroleum Products

The present system of petroleum industry in China generally has 3 characteristics —— it focuses on state-owned business, price control and restricted access. Thus China’s petroleum industry has a highly administrative monopoly. A few enterprises have completely monopolized the supply lines from its exploration, mining, refining, wholesale and retail, even to its imports and exports. The research intends to break the administrative monopoly of petroleum industry, stating its objective for the reform and meanwhile figuring out feasibility reforming solution to further liberate the markets of crude oil and product oil.

Strategy of Developing Areas and Planning Studies on Urban Industrialization For Yangcheng County in Jincheng City of Shanxi Province

On the basis of rethinking the strategy of development, the transformation of urban functions and the adjustment to industrial structure for Yangcheng County, Unirule Institute of Economics has developed a unique space-institution mathematical economic model which can reunite three-dimensional space time of cities and regions, their industries and institutions, and their economic policy analysis. The Unirule Institute will put the strategy into practice. Meanwhile, such mathematical model will be used to simulate market mechanism, to predict the final size for the long-term developing balance of cities and regions, the space distribution of population density and other economic density, the development time and process of cities and regions, the industrial distribution and its development track, and to test the flexibility of economic systems and policies. Thus the model can be used for the spatial planning of urban and rural areas in Yangcheng County.

Fairness and Efficiency of Financial Resource Allocation

The first scale problem of the fairness and efficiency of financial resource allocation is whether the overall tax bearing standard falls within the optimal interval, whether the design of tax kinds and the mechanism will harm the development of the economy. The second scale problem is whether the expenditure structure of the existing financial resource allocation, especially transfer payment, obeys the principal of justice, and the efficiency of financial expenditure especially the general administrative costs.
Unirule Institute of Economics is going to undertake research on the fairness and efficiency of financial resource allocation with the emphasis on the second scale problem. In order to fulfill the ideal of justice in a society, the involvement of financial resource allocation is one of the methods, and a universal one. A state can promote justice by implying financial expenditure in two ways: the direct and the indirect way. When applying the direct way of implying financial expenditure measures to promote justice, financial expenditure is directly distributed to individuals to fill the gap of incomes between individuals. Among the financial expenditure items of China are pensions and relief funds for social welfare, rural relief funds as well as social insurance funds. The indirect way is by governments' increase in expenditure used for supporting agriculture and villagers, construction of infrastructure, education and medical treatments. This research is on the justice of financial resource allocation and it deals mainly with whether the transfer payment of financial resources obeys the second rule of Rawls's theory of justice, which states that when violation to the first rule has to be made, resource allocation can be towards the poorest group of people. Besides the justice issue, efficiency is also involved in the financial resource allocation. The administrative costs of China have long been above the average standard of other countries in the world, therefore, a big amount of public financial resources are wasted (trillions of RMB per year as estimated). In regard with the efficiency issue of the financial resource allocation, this research deals mainly with the change of ratio of administrative costs by government agencies (in addition to other costs, such as medical treatments of government officials covered by public budgets, and housing subsidies) of financial income. The reform of the fiscal and taxation system is one of the core issues in China's on-going reforms. This research aims not at a comprehensive examination of the fiscal and taxation system, but a specific aspect which is the "fairness and efficiency of financial resource allocation", and evaluating the status quo of China's financial resource allocation.

Research on China's Urbanization on the Local Level

Urbanization is one of the most essential economic and social policies of the new administration. The emphasis of this policy is posed on medium and small cities as well as townships. As noticed, there are thousands of industrialized townships in China with their social governance lagging far behind their economic development.
Firstly, a big population is located in between the urban and rural level, which can't transform into citizens. Hundreds of millions of people have left their villages and moved to commercialized and industrialized towns. They are in industrial and commercial occupations and it is highly unlikely that they would go back to their villages. However, they are not entitled to local Hukou registration, which further leads to the deprivation of various rights, for example, the right of education. Secondly, public governance in such industrialized and commercialized towns, in general, is at a rudimentary level. The number of officially budgeted posts is asymmetric with the population governed, which leads to the employment of a large number of unofficially budgeted staff and unjustified power to govern. There is a lack of financial resources for the local government to carry out infrastructure construction or to provide public goods sufficiently. Thirdly, the urbanization results in imbalanced development of the structure of society. Since the industrialized and commercialized townships are unable to complete urbanization, urbanization in China has basically become mega-urbanization which is dominated by administrative power. Local governments centralize periphery resources with administrative power and construct cities artificially, which impedes townships and villages from evolving into cities by spontaneous order. Fourthly, industry upgrading can't be undertaken in those industrialized and commercialized townships and the capacity for future economic development is greatly limited. The industry upgrading is, in essence, the upgrading of people. Enterprises ought to draw and maintain technicians, researchers, and investors, to meet their needs for living standards, which cannot be satisfied by townships. Similarly, the lagging urbanization reversely sets back the cultivation and development of the service industry, especially the medium and high-end services.
Unirule Institute of Economics is going to carry out research on urbanization of China on the local level, aiming at improving public governance of the industrialized townships, optimizing the urbanization methodologies, and improving the "citizenization" of migrant workers, therefore further pushing social governance towards self-governance and democracy.

Research on the Public Governance Index of Provincial Capitals

At the beginning of the year 2013, Unirule conducted field survey, including more than 10 thousands of households in 30 local capital cities. According to the field survey, the Public Governance Index was derived. The main conclusions of the PGI report as below:
Three statements summarize the status quo of public governance in provincial capitals. Firstly, public services have generally just gotten a pass. Secondly, protection to civil rights is disturbing. Finally, governance methodologies need improvements. These statements point out the solution: the structure of the society needs to be altered from that with a government monopoly to a civil society with diverse governance subjects. The ranking of provincial capitals in the public governance assessment from the top to the bottom is as follows: Hangzhou, Nanjing, Urumqi, Tianjin, Chengdu, Shanghai, Beijing, Nanchang, Xi'an, Xining, Shijiazhuang, Wuhan, Guangzhou, Yinchuan, Hohhot, Chongqing, Shenyang, Changsha, Jinan, Kunming, Nanning, Haikou, Fuzhou, Guiyang, Harbin, Hefei, Changchun, Zhengzhou, Taiyuan and Lanzhou. Generally speaking, all provincial capitals are graded comparatively low in the three public governance assessments from 2008 to 2012. Even those that ranked the highest in performance have just barely passed the bar of 60 points. Few provincial capitals with poor public governance got over 50 points.
There is a certain amount of correlation between the changes of ranking and improvements in public governance in provincial capitals. In the short term, should the capital cities be willing to raise their rankings, they can achieve this by increasing transparency in government information and civil servants selection, encouraging local non-governmental organizations, or promoting wider participation in local affairs. There is but a weak correlation between public governance and the local GDP level. However, a strong correlation exists between the rankings and the equity of local fiscal transfer payment. That is to say, a region gets a higher ranking in public governance if subsidies to local social security, medical care, education and housing are distributed more to the poorest residents in that region. On the contrary, a region's ranking falls if such resources are distributed with prejudice to the groups with high incomes. This phenomenon shows that equity is of significance in the assessment of the government by the people.
When residents are not satisfied with medical care, elderly support system, water supply and electricity supply, the situation can be improved when they complain to the government. But when similar situations take place in public transportation, environment greening, heating systems, and garbage management, whether by collective actions or filing complaints to government agencies, residents can hardly be satisfied with what the government does.
According to the three public governance assessments carried out from 2008 to2012, we discovered that the Gini coefficient of residents in provincial capitals was decreasing and the income fluidity was improving. From 2010 to 2012, citizens' comments on protection of civil rights are deteriorating, especially in terms of property and personal security. The request for freedom of speech is also increasing. For the moment, citizens in provincial capitals have a low evaluation on the cleanness and honesty of local governments.

Research on Disclosure of Government Information

Room for reforms is getting narrower as the opening-up and reforms deepen. It also leads to a more stabilized vertical mobilization of the demographic structure with the conflicts in the distribution of interests exacerbating. A collaborative system centering the political and law system and involving close cooperation between the police, courts, petition offices, and the city guards (Chengguan) is developed to deal with social unrest. This system is operated by local governments and finalized as a system of maintaining stability (Weiwen). There have been Internet spats over the amount of Weiwen funds. It is unsustainable to maintain such a Weiwen system, and the disclosure of government information is the most significant approach for this end. The essence of public governance is to dissolute conflicts instead of hiding and neglecting them. And one way to achieve this is by sufficient communication. Public and transparent appraisement and supervision cannot be achieved without transparent government information, otherwise the result will be the exclusion of citizens from public governance.
Unirule Institute of Economics has been undertaking research on the disclosure of government information since 2011. This research is carried out not only from the perspective of the regulations for the disclosure of government information which evaluates whether governments of various levels are obeying the regulations and their performances, but also by examining information disclosure laws in developed countries while looking at the status quo in China. There are seven aspects where government information disclosure can be improved, namely, information disclosure of government officials, transparency of finance, transparency in the decision-making mechanism, transparency in administration, transparency in public services, transparency of enterprises owned by local governments, and transparency in civil rights protection.

Upcoming Events

Unirule·Journey of World Civilization (I) The Trip of Seeking Resources---Israel
Unirule Institute of Economics plans to host a 9-day trip to Israel to seek resources. We set up 6 topics for visiting and discussion including Judean Glamour, Faith Core, Jesus Footprint and Wisdom Business. We are going to visit the humanities and natural landscapes in Tel Aviv, Jerusalem and Galilee, etc. Besides, we will develop both formal and informal discussion to unlock the mystery in our minds. Only 30 people are designed to join us in this trip. Unirule·Journey of World Civilization combines visiting, learning and exchanging and disseminates the positive energy of civilization. Welcome to join us! For more information or signing up in advance, please contact:

Email for signing up: wmzl@unirule.org.cn
Contacts: LI Yunzhe 13718353757 ZHAO Huijuan 13661058464

PS.
1.Cost：Applicants must pay RMB1000 for application fee. After approval, the overall cost of the trip should be separately paid for RMB68,000.
2. Tips: Applicants sign up before the official enrollment i.e. the applicants in advance will enjoy 88% discount (cost of the trip RMB59,840 ). The application deadline is April 5, 2014.
3. Cost for family members: The family members of applicants signing up before April 5 can get 70%discount and those signing up after April 5 can also get 80%discount.
4. Gentle hint: For the sake of SAFETY, we don’t suggest that the kids under 10 years old join this trip.

2014 Unirule Education Forum
“2014 Unirule Education Forum” will be held in Beijing in the second half of 2014. This event will focus on the development of private education and social science of higher education.

Unirule Biweekly Symposiums 
Unirule’s Biweekly Symposiums are known in China and throughout the world for their long history of open and in-depth discussions and exchanges of ideas in economics and other social sciences. Over 380 sessions have been held and over 15,000 scholars, policy makers and students, as well as countless readers on the web, have directly and indirectly, and participated in the Biweekly Symposium for close to 20 years. 
Biweekly Symposiums begin at 2 p.m. every other Friday and are free and open to the public.

Schedule 
Biweekly Symposium No. 498: 11st April, 2014
Biweekly Symposium No. 499: 25th April, 2014

Previous Biweekly Symposiums

 Biweekly Symposium No. 496:
Time: March 14th , 2014
Topic: The Establishment of the Market Economy and the Reconstruction of the Criminal Law
Lecturer: Mr.CHEN Youxi
Host: Professor ZHANG Shuguang
Commentators: Professor XU Xin, Professor SHENG Hong, Professor FENG Xingyuan, Professor YANG Junfeng, Professor LI Shuran

Executive Editor: LIU Qian
Editor: MA Junjie
Revisor: Hannah Luftensteiner