Highlights

The Implications of Reading Sun Yat-sen’s Wills

MAO Yushi

It was the under the rule of Chinese Nationalist Party(or Kuomintang) that I went to elementary school, middle and high school, and college. At that time, we had a ceremony-like “memorial week” every Monday morning before class. The venue for the “memorial week” was set up in a certain form. The picture of Sun Yat-sen was hang in the middle, two elegiac couplets were by the sides, with the right written “Revolution has not been successful yet”， and the left written “and comrades still have to work hard”. The national flag of Republic of China and the party flag of Chinese Nationalist Party were hang on the top. There was also a fixed arrangement for the “memorial week”. Firstly, we would sing the national anthem, “San Min Chu-i, our aim shall be, to found, a free land…” and then we would recite the wills of Sun Yat-sen(there were three wills of Sun Yat-sen). After that, the principles, or the president, would give a speech. And the “memorial week” was not only for schools but also for government departments. The “memorial week” was just one form of party education, and it was not successful.

As we had “memorial week” on a weekly basis, even though other things were just a blur to me, I am very familiar with the will of Sun Yat-sen. The will was not long with just around 200 words in two paragraphs The first paragraph goes “I have served the cause of the People's Revolution for forty years, during which time my object has consistently been to secure liberty and equality for our country. From the experience of these forty years, I have come to realize that, in order to reach this object, it is necessary to awaken the masses of our people, and to join hands with those countries which are prepared to treat us as equals in our fight for the common cause of humanity.”I was just reciting these words in a parrot fashion without much understanding of the meaning. However, after seven to eight decades, I feel quite connected to the meaning of Sun Yat-sen’s will. If we put his will and his other statements together, we can get a glimpse of his insights into the situation back then and the future of China, which is still relevant to today’s China.

The aim of Sun Yat-sen’s revolution was to secure “liberty and equality” for China, nothing else. However, he did not make it specific about whose “liberty and equality” he was talking about, which we would never know. If we try to understand what he said in today’s context, the “liberty and equality” may well be the liberty of individuals, and the equality of every man and woman. Of course, the China back then was much different than it is today. There was extreme poverty, a weak state, and a lot of foreign abuse at that time. What Sun Yat-sen wished for China was to have prosperity and powerful national defense. But he knew clearly that without liberty and equality, the other aims would not be reached. That’s why he did not mention the prosperity and well-off of Chinese people; nor did he put the national defense or fight against foreign enemies in the first place, let alone promoting Chinese culture or competing with other countries in the world. It is not that these aims were not important, but that they could not be realized without liberty and equality. So, he put emphasized liberty and equality. Unfortunately, his comrades and protege Mr. Chiang Kai-shek and Mr. MAO Zedong did not think alike. What they envisaged for China was a path of authoritarian rule. They considered liberty and equality the most dangerous enemy of their rule, and they hunted down those who pursued liberty and equality; they also thought of foreign forces that helped China to realize liberty and equality as enemies. What they did was total against Sun Yat-sen’s will. It was only after the opening-up and reform that there existed some room for liberty and equality. As there was a minimum liberty and equality, China’s opening-up and reform achieved unprecedented success. The rest of what needs to be done is the uncompleted part of liberty and equality.

As for the method of realizing liberty and equality, Sun Yat-sen said "it is necessary to awaken the masses of our people”. What he said was “to awaken” instead of “to educate”. He thought as the masses of Chinese people were awaken, liberty and equality could be realized. But how? Considering his emphasis on liberty and equality, it can be assumed that what he wished for Chinese people to have was freedom of expression, and self-education for people, instead of the top-down knowledge cramming education。 Sun Yat-sen’s will was composed before he passed away in 1925, which was almost 90 years ago. Back then, the majority of Chinese people were uncivilized with very low literacy rate and very limited knowledge of the outside world. If Sun Yat-sen was that confident of his people back then, how can we have so little faith in our people today?

It was not enough just to “awaken the masses of our people”, but also necessary “to join hands with those countries which are prepared to treat us as equals in our fight for the common cause of humanity.”He saw the significance of uniting other countries in the world. He knew how important the world was to China. He even held high expectations of the former Soviet Union. However, history proved that the former Soviet Union had great territorial ambitions. In fact, the reason why the Republic of China became of the initiating countries to join the United Nations and became one of the five standing committee members of the Security Council after the World War II was the support of “those countries which are prepared to treat us as equals in our fight for the common cause of humanity.” Strictly speaking, the end of the World War II in the Pacific front was mainly attributed to US intervention where American soldiers took over Saipan and Ryukyu Islands at great cost. The US also played a decisive role in defeating Japan by dropping two atomic bombs. It would have not been possible for China to defeat Japan on its own for one or two decades. Therefore, it is apparent how important the world was to China. Sun Yat-sen’s view of China’s foreign policy is still the basic principles for foreign affairs in China today.

He also said that “the trend of the world is too immense to resist. Those who go with the trend survive, and those who don’t decease.” What was the trend of the world back then? The trend was the Manchu Qing Dynasty was falling apart, and the contradiction of China’s feudal system, and the inevitable shift towards constitutionalism and democracy. However, the Revolution of 1911, the Wuhan Uprising,  and the success of the national revolution were just a flash in the pan. Democratic politics was a big success in UK and the US, which was also very helpful for Sun Yat-sen to lead his revolution against the Manchu Empire. For many times, he sought refuge in London and Honolulu. He saw that Japan was taking after the democratic wave of the world, and his Japanese friends also helped him to set up bases in Japan. Therefore,I am sure the trend of the world back then for Sun Yat-sen was about democracy, liberty, and equality.

The wills of Sun Yat-sen were based on his forty-year experience. His visions are truly extraordinary. The Chinese Nationalist Party still considers him the founding father. Even the Chinese Communist Party, after years of movements, cannot diminish his importance in China’s revolutionary history. His pictures are still shown in important ceremonies nowadays on the Tiananmen Square. Many people worry where China is going, which is an unsolved problem. Maybe another look at Sun Yat-sen’s will may give us some hints.

MAO Yushi, Honorary President of Unirule Institute of Economics

Source: FT Chinese and China-Review

Current Events

Unirule World Civilization Study Trip(I): Israel

Israel, “a land flowing with milk and honey” , and God’s “promised land”, is a legendary place that also homed the important elements of Christianity that constitute the modern civilization. The education, technology, and economic performance of Israel are in the leading place in the world. Since the founding of the Nobel Prize, the Jewish people have taken 20% of it. Everyone knows about Christianity, and Israel is the origin of the origin.

September 29th, Unirule World Civilization Study Trip to Israel led a team of scholars and entrepreneurs to this sacred land. This study trip features traveling, field visits, talks with local scholars, entrepreneurs, politicians, and common residents.

During this six-day trip, the group visited Tiberias, Haifa, Tel Aviv, Jaffa, the Dead Sea, Jerusalem, and Bethlehem. The trip also covered Kibbutz in Israel, and topics including geopolitics, economics, and culture. The group also had seminars with prominent scholars of Israel, including historian, Professor Fania, Professor Hershkowitz, and the 2005 Nobel Economics Prize laureate Professor Robert Aumann. (To read more)

Unirule Invited Professor LEI Yi to Speak on Unirule Gengdan Forum

October 8th, Unirule invited Professor LEI Yi, researcher from CASS, to speak on Unirule Gengdan Forum. The topic was “The Delay of Institutions and the Fall of the Qing Dynasty”.

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.

On the forum, Professor LEI Yi presented a vivid illustration on a series of events in modern China and provoked a question: why the system of the Qing Dynasty was so lagged behind other comparatively advanced powers at that time that it fell. Professor LEI thought the main reason was that the rulers of the Qing Dynasty had a cultural Chauvinism and thought the world should change and learn from the Chinese culture instead of the other way around. The lock-down of the country and the great constraint of people’s mind posed crisis for Qing Dynasty which further led to the loss of credibility of the ruling group and the end of the dynasty. (To read more)

News

Unirule 10-D Spatial Simulation Planning Model (SSPM)

The Unirule 10-D Spatial Simulation Planning Model (SSPM) is a mathematical and computational model based on economics. It is developed by a Unirule research team led by Professor SHENG Hong. SSPM is designed to simulate the development scale, economic density, industry distribution, resource constraints, ecological preservation, institutional influence, policy effect, and the evolution process in the next ten to twenty years or even longer period for a region. SSPM provides reference for the regional economic development strategy making, which can be directly adopted in the planning on regional economic development, population, land use, industry development, townships, water and ecology.

So far, SSPM has been adopted in the industry planning of Qianhai Area, Shenzhen, and the economic development planning of Yangcheng County, Shanxi Province.

Learn more about the SSPM

China’s Economy Back to Stabilization with Increase of the Tertiary Industry and Correction of Dependence on Policy Still Needed - Analysis on Quarter 1 Macroeconomics 2014

July 22nd, Macroeconomic Analysis on Quarter 2, 2014 was released at Unirule office in Beijing. Professor ZHANG Shuguang, Chairman of Unirule Academic Committee hosted the meeting and took questions from the audience.

Here is the abstract of the Analysis.
China’s economy stabilized due to intensive stimulus policies. In the first half of 2014, the GDP growth was 7.4% with the industrial added value increasing by 8.8%. Economic indicators look more promising than in the first quarter with the weight of the tertiary industry increasing, which shows improvement in the economic structure. In the meantime, a dependence on policy comes into existence. Adjustment and control of the real estate industry and the monetary policy are faced with great difficulty, and efforts should be taken to manage the reserves against deposit. As there is opportunity cost for any policy and government conduct, the administration needs to judge and weigh the task of guaranteeing short and long term economic growth and the task of promoting reforms and restructuring.

Current Researches/ Consulting

Business Ethics Declaration of Chinese Entrepreneurs

Over the last three decades, China’s economy has been embracing rapid growth with entrepreneurs being a key drive. The biggest and most significant structural change is the rise of entrepreneurs who constitute the pillar of the society nowadays. Today, the biggest, and the youngest group of entrepreneurs are going international, bridging China and the world.

However, because of the abnormal political, social and ideological environment of China for the last five decades, Chinese entrepreneurs happen to be widely confused and for the last thirty years, the emerging group of entrepreneurs has been suffering from severe anxiety over identity:

Firstly, due to the long time anti-market ideological propaganda by the authorities, many entrepreneurs believe they have the “original sin”. They are led to believe that their profits are based on exploiting the workers, which further leads to their confusion and anxiety over the ethical justification of their fortune and profits.

Secondly, this anti-market ideology also affects the public; leading the public to envy the fortune of entrepreneurs while disrespect them since their deeds are “unethical” and “dishonest”. This public opinion, in return, affects entrepreneurs’ self-identity. They, therefore, can’t convince themselves of the contributions they make to the society, or identify themselves within the social hierarchy.

Thirdly, Chinese entrepreneurs, especially those whose enterprises have gone international, are bothered with this severe identification anxiety. Chinese people stand out in entrepreneurship, so do Chinese enterprises. But what are the driving forces behind? Thanks to the long time culture break-up from the traditions, and the anti-tradition propaganda, Chinese entrepreneurs find it hard to comprehend and identify their cultural and social roles. This leads to the chaotic and restless mental state of entrepreneurs. This also results in the lack of a cultural supportive pillar for enterprise management in China.

“Business Ethics Declaration of Chinese Entrepreneurs” aims to provide answers to the anxiety over identity for Chinese entrepreneurs, to re-identify them by providing authentic and orthodoxical conceptions, to help them mature their thoughts and corporate social responsibilities.

This research project is committed to establishing a value system for Chinese entrepreneurs. To confront the anxiety over identity for Chinese entrepreneurs, this project provides answers to the three questions below:

1.Do Chinese entrepreneurs have the “original sin”?
2.What do Chinese entrepreneurs contribute to the society?
3.How do Chinese entrepreneurs gain respect?

Improving Entrepreneurs' Survival Environment: Abolishing Death Penalties in Relation to Fund-Raising Cases in China

In recent years, environment for private enterprises has been taking a deteriorating turn, which attracts attention from the media and the academia. The causes are complex and multi-faceted, including: 1, the abuse of powers by government officials as the government powers expand; 2, “the private-owned deteriorating with the state-owned advancing”(guojin mintui) worsens the picture where the survival environment for private enterprises gets more and more squeezed; 3, external demands of enterprises decrease while internal cost increases; 4, financial suppression escalates with the industrial restructuring and updating lagging behind; and 5, the fluctuation of macroeconomic policies by the government poses uncertainty for production and investment. Moreover, many innocent entrepreneurs were labeled and persecuted for their “gangster behaviors” by the policy and law enforcements in Chongqing city, which was just a glimpse of similar occasional “gangster crashing” movements in the country. Many entrepreneurs are suppressed and sanctioned in the name of “illegal fund-raising”. According to active law, the court can sentence entrepreneurs to death penalty with this charge.

Unirule Institute of Economics is planning to undertake research on the problems of the crime of “illegal fund-raising” and specific method to abolish this charge.

It is fit for Unirule to carry out this research project. Unirule Institute of Economics is a non-profit, non-governmental organization, which focuses on institutional economics with expertise in economics, laws, and politics. It has been dedicated to independent research on China’s institutional reforms and public policies as well as the reform of private finance. In 2003, 2011, and 2013, Unirule held seminars on the cases of Mr. SUN Dawu, Ms. WU Ying, and Mr. ZENG Chengjie. These seminars have been very influential before and after the close of the cases.

Unirule Institute of Economics has undertaken research projects in corporate finance and private finance in recent years. Over the years, Professor FENG Xingyuan has been carrying out pioneering research on private finance and private enterprises. He has gained rich experience and published many publications and papers on relevant topics, including Report on the Freedom of China’s Corporate Capitals, Report on the Survival Environment of China’s Private Enterprises 2012, Research on the Risks of Private Finance, etc. In August 2013, Professor FENG Xingyuan and his research team completed and released the Report on Private Enterprise Fund-Raiding in West Hunan and the Case of Mr. ZENG Chengjie, which analyzed and assessed the process, nature, problems, and causes of a series of events and proposed policy recommendations concerning the fund-raising activities in West Hunan and the case of Mr. ZENG Chengjie. Besides, Professor MAO Yushi, Honorary President and celebrated economist of Unirule Institute of Economics, is also an expert in private finance as Professor FENG Xingyuan.

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 shows 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 feasible reforming solutions 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.

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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. 513: 7th November, 2014
Biweekly Symposium No. 514: 21st November, 2014

Previous Biweekly Symposiums

Biweekly Symposium No. 508: The Periodical Mismatch between the New Normal of the Economy of the US and China
Time: August 29th, 2014
Lecturer: Professor WANG Hongju
Host: Professor ZHAO Nong
Commentators: CHENG Shi, XU Hongcai, YU Chunmei

Professor WANG firstly introduced the meaning of “New Normal”. He explained the features of the New Normal of China’s economy, with a comparative perspective of the New Normal concept proposed by Mr. Mohamed El-Erian, Chief Economic Adviser of Allianz, a multinational financial services company. The New Normal for China’s economy meant the subprime high speed growth stage, and the new normal status that featured “maintaining economic growth” and “containing risks”, restructuring, new constraints of factor provision, and the needs for reforming and completing the national security governance. Professor WANG also illustrated three prospects for China’s New Normal.

By analyzing some short-term economic indicators(Coincident Index by Federal Reserve Bank of Philadelphia), Composite Leading Indicators(OECD), indexes of the real economy, and other coincident indexes of the US, Professor WANG discovered the periodical mismatch between the economy of the US and China. By employing the dynamic variants model on the comparison of the GDP, investment, and consumption of the four major economies, namely, US, Japan, Europe, and China, and calculating the common variant, the mismatch still stands. In order to deal with this mismatch, Professor WANG pointed out the following policies to be adopted to avoid the reoccurrence. The policy proposals are to achieve a growth rate that’s higher than the bottom-line growth rate by micro-stimuli while de-leveraging, to avoid decoupling with the American economy, and to suppress speculation in the property market and to speed up economic restructuring by reforms.

Editor: MA Junjie
Revisor: Hannah Luftensteiner