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Unirule’s Report to the Society 2016
Time:2017-03-24 23:04:11   Clicks:

SHENG Hong, Director of Unirule Institute of Economics

Translated by MA Junjie, Researcher, Unirule Institute of Economics

(This is a keynote speech by SHENG Hong on Unirule New Year Expectations Forum, January 10th, 2017, at Unirule Beijing Office. )

Ladies and Gentlemen,

It is a long-standing tradition of Unirule Institute of Economics to present its work to the public every year. The reason why we do this is that Unirule considers itself a public organisation. What is a public organisation, then? Unirule is dedicated to serving the Chinese society by providing the public good of knowledge. Some knowledge is privately owned, for example, the knowledge to make a profit. But when we talk about pursuing social justice, or constitutional reforms, even though there’s no direct influence on one’s personal finances, the work is good for the society. Therefore, as the definition of public good suggests, nobody’s paying for this service. But that’s what we do, and that’s why we ask for the support of the society. And that’s also why we need to present our work, our achievements, and our plans to the society. Unirule Institute of Economics is a non-governmental, not-for-profit academic organisation. Our product is a public good that is knowledge. I often use this example to illustrate my point. Someone asked Mencius, why saints didn’t cultivate in the field. Mencius asked, why farmers didn’t make pottery. Mencius touched upon an interesting issue here, that is the society is public, and everyone contribute to the society in their own way with their expertise. What intellectuals do is to provide knowledge as a public good to the society, a social capital, and knowledge about institutions, which benefits the society in general. How to do this requires the three actions venerated in Confucian ideals, namely, upholding words(立言), that is to propose institutional plans, policy proposals, and ideas; upholding the public(立公), that is to promote constitutional reforms and contribute to the current reforms. In fact, the constitutional reforms we talk about are small steps accumulated. Last but not the least, upholding virtue(立德), that is the reinvigoration of the Chinese nation, or to contribute to the new Chinese culture. 

I would also like to stress that Unirule does not take actions or promote violent movements. What we believe is that ideas are actions, to express is to act, and we have always been acting in this sense. As a part of the intellectual community, we aspire to promote the development of ideas. To summarise what Unirule has achieved in the past year requires only one sentence, that is we survived to be able to present Unirule’s work here today. This means we have fulfilled our responsibilities and survived the harsh environment in the past year. We have also completed some research and proposed several policy suggestions. Here are a couple of things I’d like to mention:


Firstly, we have achieved some theoretical research. One of the activities we undertook last year was the Interdisciplinary Conference on Historic and Institutional Research on June 25th and 26th in Xushui, Hebei Province. The first day was held at Dawu Group, and the second day, due to some unexpected inconveniences, we were forced to move the venue to several boats on Baiyang Lake. It was a success, and an unprecedented academic event. July 23rd, we held a conference on Labour Contract Law and the Supply-Side Reform. Many scholars attended this meeting. Professor Stephen Cheung also joined us and gave a speech via the Internet. On October 16th, a Forum on Entrepreneurship and Wealth and the Austrian School of Economics was held in our office. That’s something we’ve been doing for years. Another event was a seminar on Masahiko Aoki’s legacy, which was also a very successful memorial event. 


Secondly, we have done a series of educational events and trainings. Last year was the third year to hold master classes for entrepreneurs and students. There was also a class on western classics, many works by Hayek and Locke. We also held a book reading salon on Hayek’s works. I was also happy that a training program on Neo-Confucianism was initiated. 


Thirdly, we have been undertaking some research on public policy as well. We have completed a research on the fairness of resource allocation by Chinese administrative departments. The research report was also translated into English and is expected to be published later this year. All these reports are available for downloads on our websites, because we believe they are public goods. Another research project was on the institution of China’s healthcare system. We have also initiated a research on constitutional review. 

There are several issues we concentrate on. One of them is the private enterprises. We have completed a research on corporate tax burden for private enterprises. It shows that China ranked second in the world, which is really the first in the world, in terms of taxes. A catchy phrase of “death tax rate” was coined by this research and started quite a discussion around the nation. On January 28th, we also held a seminar on trademark protection and judicial justice, which addressed several trademark violations. On August 9th, a Forum on China’s Private Enterprises’ Survival and Development was held to address the issue of decreasing domestic investment rate, which was an appalling 2%. China’s development relied heavily on the growth of private enterprises. All the new jobs were created by private enterprises, and 95% of the GDP growth was attributed to private enterprises. This shows the utmost importance of private enterprises. Another seminar on this topic was held on November 27th to echo the decision made by the central government on protection of private property rights. We also held seminars on some other public affairs, such as the seminar on poverty relief. This was the first session of Unirule Policy Watch which addressed the  new models and new directions for poverty relief on March 29th. Another two serial forums are our salon for new economy that deals with the contribution of the new economy; and another was our salon for urbanisation. The first session was held on December 29th, dealing with the scope of the new urbanisation process. 

There was also a special seminar on the constitutional constraint on judicial power. In this seminar, we talked about the recent case of Mr. LEI Yang. As we concluded, this case should really be settled carefully, and justice should be done to Mr. LEI Yang. Otherwise, the society would have to bear the fallouts, and so would the government and the ruling party. We never concede from social affairs, and we have an obligation to speak and to comment. It’s a constitutional right. 


Of course, we have kept holding our Biweekly Academic Symposium. Last year, we held 25 sessions of this forum. Famous scholars such as Professor ZHNEG Yefu were invited twice to speak. Unirule also held a quarterly economic performance press release. It was a project of Professor ZHANG Shuguang. In terms of publicity, Unirule has an official websites called china-review.com. It is a website for comments, academic exchange, and research. In order to keep up with the latest development of the social media, we created several WeChat public accounts, such as Unirule Cloud Words(天则云思), a symbol of our free thinking and spontaneous comments on current affairs. Another is Unirule and Friends, created quite early with a big following. We also have several personal accounts of Unirule scholars, such as that of Mr. MAO Yushi and mine. 


Last year also saw frequent international exchanges. In June, the Swedish Entrepreneurship Forum invited Mr. MAO Yushi, Mr. MA Junjie and me to speak in Stockholm. In September, I was invited by EFCR to speak in Berlin. We also organised a study trip to Israel last year, getting a glimpse of its culture, history, and economy. We run a column in Financial Times Chinese. There are also two translation projects going on, one on rent-seeking theory, the other a series of Unirule scholars’ works. 


There are several things we have achieved. In 2004, entrusted by the Kashi regional party committee, we proposed an economic circle development strategy around Kashi, encompassing Central Asia, and South Asia. This strategy was further integrated into the local development strategy which is now known as the New Silkroad. In a way, our strategic thinking has contributed to the One Road, One Belt initiative. In 2012, we completed a report entitled The Cause, Behaviour, and Elimination of Administrative Monopoly that proposed the break of monopoly in several areas, such as oil and table salt. Now we are happy to see that the table salt monopoly is no more. We have taken a step towards more competition, and less monopoly. Another influential research was in the oil industry. We thought it could be a workable process to first open the import business to private enterprises first, which could be of very low institutional cost, and then moving on to break the whole monopoly in the oil industry. Two seminars were held on private financing in 2012 and 2013. We discussed the WU Ying case and proposed that the criminal charges of unlawful private financings should be invalidated. We saw in 2015 that the Amendment 9 to the Criminal Law stipulating that death penalty for private financing and freud is abolished. 


We have been advocating protection of property rights, and many seminars and forums have been held. We are known as a school of property rights, therefore, it is our job to promote the protection of property rights. In 2011, a seminar on private property rights and public rights was held. Last year, the CPC central committee and the State Council issued a suggestion on protecting property rights by law. It is fair to say that our work has influenced the decision-making of the central government. 

There’s a lot to do this year. We plan to hold an interdisciplinary theoretical seminar on “global governance and cultural order” in May. There’s also a new research project on the mobile Internet, economic institution, industrial structure, urban planning, and macroeconomic performance, etc.. Again, we are going to work on our research in judicial justice, the resource allocation efficiency by administrative departments, fiscal policy and tax system. We are completing our research into China’s healthcare system. We are going to still carry out all the old programs in the coming year. 


Last but not the least, I would like to thank all of you for your constant support without which none of these would have been possible! I would also like to hope that more and more people would come to realise the importance of the public goods we provide and the positive influence on the society. Thank you!



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