Highlights
What to Reform When We Talk about Supply Side Structural Reforms
by SHENG Hong, Director, Unirule Institute of Economics
Translated by MA Junjie, Researcher, Unirule Institute of Economics
There has been a big fuss about the so-called supply side structural reform lately in China. The theoretical basis of this reform is the supply economy. And the essence of the supply economy is Say's Law that stipulates aggregate production necessarily creates an equal quantity of aggregate demand. This supply must be valid supply, i.e., supply that can be sold. When the supply gets sold out, income is created, and income creates demand.
Apparently, the precondition of Say’s Law is an effective market. The correct signal in such a market will inform the suppliers to provide in accordance with the demand. There are three conditions for an effective market: firstly, the factor of production can be freely exchanged; secondly, enterprises are free to enter any industry; and thirdly, the price is set by the market. Only when the factor of production is freely exchanged, can reallocation of resources take place from places of low productivity to those of high productivity; only when enterprises are able to enter any industry, can the distortion of industrial structure be corrected quickly, and temporary shortages be compensated; only when the price is set by the market, can correct price signals be produced to direct the resources.
Taking a look at China’s institutional environment, we’ll see it’s far from the ideal situation. Firstly, a large proportion of resources are possessed by state-owned enterprises (SOEs), especially central government owned enterprises. However, SOEs are not playing according to the market rules. Even though they are making huge losses, they won’t quit. Therefore, a huge amount of resources cannot be reallocated. According to Unirule research on SOEs, deducting the government subsidies and the underpaid costs, the real net RoR of industrial SOEs in 2013 was -3.8%. In the same year, the total assets of SOEs accounted for RMB 104 trillion, and the net assets accounted for RMB 37 trillion. It means if these assets could be reallocated, and the net RoR was raised by 10% to 6.2% (the non-SOEs’ net RoR was 15.6% in the same time period), a total of RMB 3.7 trillion of GDP could be achieved, which accounted for 5.4% of the GDP in 2013.
It can be seen that the problem with SOEs has nothing to do with corporate governance, but it has a lot to do with macro-governance. Were SOEs really reformed, the implications could influence the macroeconomy. According to the National Institution for Finance and Development, the total assets of China amounted to RMB 691.3 trillion in 2013, and the net assets amounted to RMB 352.2 trillion. The total assets of SOEs accounted for 15% of the national total, and the net assets of SOEs for 11% of the national figure. As we see, the SOEs with such a big proportion of total and net assets and at such low efficiency are undertaking no tangible reforms due to the stubborn resistance of the SOE executives for the sake of their own interests. As a result, SOEs have been stalling China’s economic growth. Therefore, the major aim for the supply side reform is the SOE reform.
Secondly, enterprises are not allowed to enter all sectors of the economy due to monopolies and entry barriers, take the oil industry, for instance. There is monopoly in the oil industry from the top to the bottom. In order to maintain this monopoly, the import of crude oil was shut down to non-SOEs. As of this moment, the capacity of refineries other than the Three Buckets of Oil, i.e., the three state-owned oil companies including CNPC, SINOPEC, and CNOOC, is about 1.88 trillion ton. However, due to the crude oil import control, most of these refineries have to import fuel oil or process for the three SOEs. That is about 60% of the capacity stand idle per year. If the import of crude oil is open, these refineries will create another RMB 300 billion industrial added value in addition (2011).
Thirdly, some of the prices of essential resources are regulated by the government, such as the price of gas. In fact, the price of gas is heavily influenced by the SOE monopolies. China’s economy fails to enjoy the benefits of the decrease of fuel prices. The pricing of China’s petroleum products is set with reference to the three largest international oil exchanges. However, against the backdrop of the plummeting oil price in the global market, this mechanism is halted in various names. Apparently, the monopoly of the Three Buckets of Oil has a say in this. As Unirule research estimates, for the oil of the same quality, the price of China’s gas in 2015 was 21% higher than the weighted average of that in other major countries of the world, and the price of diesel was 28% higher. The cost for fuel accounted for 3% of the GDP as petroleum products are widely used in China. If the price is 25% higher, that accounts for an extra 0.8% of the GDP in cost. This increase of cost will set off the effect of the interest rate decrease due to the macroeconomic policy, which will set back the recovery of the economy.
Lastly, due to the institutional obstacles, the biggest resource in China, land, is not effectively reallocated. On the one hand, much of the state-owned land is used for free by SOEs, accounting as assets without paying the land rent, which leads to a loss of land rent revenue amounting to trillions per year. That is to say, SOEs are not able to put the land into effective use, and not willing to reallocate the land to other enterprises. Therefore, SOEs cause the loss of land rent. In Unirule research report “The Nature, Performance, and Reform of State-Owned Enterprises” (2nd Edition), the underpaid land rent by SOEs in 2013 is estimated to about RMB 1240.9 billion, which is 2.1% of the GDP that year.
On the other hand, much of the land cannot be freely exchanged. This land is the land owned by the rural residents. Though these residents have owned the land for generations, the Constitution stipulates that rural land is collectively owned, which means rural residents don’t have the full property rights of their land. The Land Administration Law, in accordance to the Constitution, stipulates that rural collectively owned land has to be transformed to state-owned land before construction is undertaken upon it. And the compensation for acquiring the rural land is 6-19% of the yearly yield of the land. That is way lower than the agricultural use of the land.
Against the backdrop of the development of automobiles and the Internet, cities are becoming flat and suburbanized, while tourism will flourish. If rural residents have full property rights over their land and are free to change its use, for example, from agrarian to touristic or real estate, then their income could increase by ten times. My personal investigations of some touristic areas show that the household income of the rural residents increased from several thousand to tens of thousands. These residents not only have the income from their estates, but also the revenue of other touristic operations. A local market of goods and services comes into being as more tourists and urban residents come pouring in, which is good for the local economy. Of course, not all the rural areas are fit for developing tourism. But simply consider that 1% of all Chinese villages take this path, a significant increase of GDP can be anticipated.
The static estimation above shows that the reform of SOEs and the land institution will bring about significant GDP increase. For example, if the SOEs begin to eradicate monopoly, abandon possession of the state-owned resources they use for free or at a low price, a 1% GDP increase per year is to be anticipated, should the reforms be completed within five years. What’s more, the dynamic repercussions are even more exciting if such reforms are to be taken. As SOEs become fair players in the market place, various factors will be freely exchanged, which will promote the development of division of labour and professions, the innovation of technology and institution. All this will have a long-term effect on China’s economic development.
This article is a speech of the author on the Chinese Economist 50 Forum, Feb. 19th, 2016.
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Current Events
Seminar on “Protection of Trademark and Judicial Justice” Held in Beijing
January 28th, 2016, a seminar on “Protection of Trademark and Judicial Justice” was held in Beijing to address the dispute between Wuliangye and Dawuliangye, two liquor brands in China. Professor GAO Yan, Deputy Director of Unirule held the seminar. Professor Xingyuan gave an opening speech. He said that “Unirule Institute of Economics is known for providing independent opinions on major social affairs and public policy, which led to the ranking of top 175 think tanks in the world. Unirule has taken efforts to maintain social justice demonstrated by several cases, such as the SUN Zhigang incident, the fundraising case of SUN Dawu, the WU Ying case, and the ZENG Chengjie case. Unirule gathered several jurists and economists to hold seminars and promoted the abolishment of death penalty for illegal fundraising. Such seminars have helped to better handle the cases and to promote the progress in China’s judiciary.”(To read More)
Seminar on “Corporate Tax System in the USA and China: Problems and Reform” Held in Beijing
February 21st, a seminar on “Corporate Tax System in the USA and China: Problems and Reform” was held at Unirule Beijing Office. This seminar brought in significant study results and international experience for the ongoing research project on “The Survival and Development of China’s Private Enterprises and the Tax System”. Unirule was proud to have Mr. Daniel J. Michell, Senior Fellow from CATO Institute(US) to speak on this seminar.
Mr. Michell has been a fervent researcher on corporate tax. He was the co-author of Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It, a world renowned book that discusses global corporate tax, single tax system and the tax competition.
This seminar also brought together famous domestic tax experts, including Professor FENG Xingyuan from CASS, Professor CAI Chang from Central University of Finance and Economics, Professor LI Weiguang from Tianjin University of Finance and Economics, and Professor NI Hongri from Development Research Centre of the State Council. Audience from the media, businesses, and institutions were also present.
Mr. Michell started from the engine of economic growth, stating that the origin of growth is the rational investment of capital and labor, and a good tax system will facilitate the formation of such an investment combination. To illustrate, the prosperity of a nation relies on the low tax rate, avoiding dual taxation on deposits and investments, and a flawless tax system that is neutral without favorable treatment of different tax payers. If the tax rate exceeds 20%, or 30-40%, then negative effect on the economic growth will show, and more incompliance will come about. He came to these conclusions after his research on American corporate tax institutions.
Professor NI Hongri thought the problem of dual, even multiple taxation on corporates exists in China. The value added tax and the income tax are, in fact, triple taxation on enterprises. Further reforms should be undertaken to improve and correct the flaws.
Professor LI Weiguang explored the issue of liberty and freedom in the tax system. He emphasized that the Chinese tax system have many flaws that impede the creativity of enterprises and individuals. Besides, he thought the main tax structure in China relies heavily on enterprises, which showcases the operation pressure faced by China’s private enterprises.
Professor CAI Chang started with commenting on Mr. Michell’s book. He touched upon the point of the on-going flat global tax dynamics which is further made transparent by the big data and the Internet. He also raised the issue of tax system competition and the potential of new forms of tax in the information era.
Professor FENG Xingyuan moderated the seminar. In his comment, he introduced Unirule research on the survival and development environment of private enterprises in China and the tax system. He stressed the importance of adopting a single tax system that will greatly improve the environment of the private enterprises. He also pointed out the potential of further economic growth should this tax system be reformed in that direction. (To read more)
Unirule Board Meeting 2016 Held in Beijing
On the morning of Feb. 19th, 2016, Unirule Board Meeting was held at Unirule Beijing Office. A total of 16 members of the Unirule Board were present. They are CAO Yuanzheng, FAN Gang, GAO Yan, LI Weiguang, LU Yuegang, MAO Yushi, SHENG Hong, WU Bin, WANG Yongfeng, WANG Xiaowen, XU Zhangrun, WU Si, YAO Zhongqiu, and ZHANG Shuguang.
Reports on Unirule’s work last year were subsequently given by the President of Unirule, the Director of Unirule, and the Chairman of Unirule Academic Committee. The members voted on some arrangements in essential issues and personnel:
The incumbent President of Unirule, Professor YAO Zhongqiu introduced the agenda of this meeting, restated the responsibilities and obligations of Unirule Institute of Economics as an NGO, and proposed a rotation of presidency to the board.
Mr. MAO Yushi, Honorary President of Unirule acknowledged the contributions of Professor YAO Zhongqiu and stressed that the key issue of this meeting was to elect a new president. He extended his welcome to the newly elected President of Unirule, Mr. WU Si, famous historian.
Professor SHENG Hong, Director of Unirule reported Unirule’s work in the past year. Professor ZHANG Shuguang introduced Unirule’s academic activities, including the Biweekly Academic Symposium, the China’s Economics Series, and the publication of Case Studies of China’s Institutional Transition. President YAO Zhongqiu reported to the meeting the efforts of Unirule in transforming into a more dynamic and relevant organisation in the new conditions.
At last, all the members of the board commented on the reports.
According to the Charter of Unirule Board, Mr. WU Si was elected the new President of Unirule, and Professor SHENG Hong, Director of Unirule.
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
Current Researches/ Consulting
Improving China’s Implimentation and Supervision Institution of the Constitution
At present, research on the implimentation and supervision institution of China’s constitution is insufficient. Multiple problems exist in the current studies, such as the lack of a cultural perspective, and empathetic understanding of China’s political tradition; a lack of authentic Chinese perspective and an indulgence of Westernized framework of analysis; and a lack of reflection of the reality and the existing political framework.
The research on China’s constitution review institution should put the protection of civil rights and constitutional construction first, with a reflection of China’s reality and take in the advantages of external researches. A plausible research approach is as follows: 1. This research ought to provide a right relief mechanism; 2. It should take into account that China is a vast country with imbalanced regional development realities which foster unique and differentiated conceptions of the law and politics in general; 3. It should be built upon the current constitutional structure and take into account the interactive system of the power of the party, the National People’s Congress, etc. in order to make it a progressive research, which can enable the elements of constitutionalism to supplement the current constitutional framework; 4. Scrupulous examination should be given to constitutional practices in other regions and cultures, especially those influenced by the Chinese culture or with a similar institutional set-up, such as Taiwan and France; 5. Observations should be made in regard to the traditional Chinese institutions, such as the institution of the expostulation system (“谏议制度”, or giving advice), supervision system, and the institutions established in this light, e.g., Taiwan’s Control Yuan.
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 methods 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.
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?
An Economic Research of Chinese Urban Smog Management
The issue of smog has been on the spotlight in China that no matter government officials, ordinary citizens, or journalists and the press have expressed serious concern and anxiety towards it. Unirule Institute of Economics takes on this research topic and is conducting an economic research on China’s urban smog management.
The urban smog is attributed to multiple factors with many interest parties involved, which also makes it an economic issue. Unirule seeks to find a solution to the management of smog by the design of institutions from an economic point of view.
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 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. 543: 26th Feb., 2016
Biweekly Symposium No. 544: 11th Mar., 2016
Previous Biweekly Symposiums
Biweekly Symposium No. 541: A Unified Theory of Exploitation and Moral Economy.
Lecturer: XU Jianming
Host: ZHAO Nong, Vice Chairman, Unirule Academic Committee
Commentators: XAI Jiming, DANG Guoying, MO Zhihong, SHENG Hong, ZHANG Shuguang
Dr. XU Jianming started with introducing the concept of exploitation in the economic theories. He thought this concept was heavily ridden by ideologies, and it had disappeared from the contemporary standardized economic textbooks. Dave Friedman even thought it was not worth discussing. Dr. XU claimed that what he tried to do was to prove in competitive equilibrium, exploitation and morality coexisted and constituted the starting point in terms of logical reasoning.
Dr. XU discovered that when marginal productivity was high enough, and then there was no limits to the utilities of workers or farmers, there was no exploitation, or moral economy.
Professor CAI Jiming thought the issue of exploitation was certainly important. One of the reasons that we are eradicating private ownership today is the connection between exploitation and private ownership. He objected this connection and the labour value theory based on it.
Professor MO Zhihong thought the proposal of a concept was supposed to deal with specific problems. She thought the concept was insufficient to explain the reality and therefore, should be either abandoned or reexamined.
Editor: MA Junjie
Revisor: Hannah Luftensteiner
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