Mr Guo: let the market play a fundamental role in allocating resources

Sponsored by the financial and new media, the "2010 Finance and New Summit: China and the World" was held in Beijing November 5, 2010 6th. The theme: The Chinese policy of changing the world. CCB Chairman Guo said that the important issue of China's market economy is that the system is unreasonable, the administrative interference is too much, the environment of fair competition is inferior. Following is a transcript of Mr Guo: Yesterday, the construction bank's market value reached 247 billion U.S. dollars, ranked first in the world.　　Before this, there are a series of adverse news, such as the large shareholder, Huijin Company's stock released from circulation, and we also began a rights issue, so the market recognition of the bank is a great encouragement, this is the Chinese state-owned commercial bank reform has made great achievements in an important performance. Mr Guo: China's economic reform has made it clear from the outset to establish a new system of market economy. Mr. Mr. Wu, one of the major advocates of market reform, has been proposing this slogan for 18 years. China's vibrant economy undoubtedly proves that the market mechanism has already played a major role in allocating resources, but up to now it is a problem whether it has reached a reasonable enough proportion of what we expect or want. Because mature countries, with the concept of quantity, market allocation of resources accounted for about 90%, the government many public services are purchased from the market. We are a developing country, should be 85%, in the end is 65%, 75%, or 85%?　　We can discuss it with you. Mr Guo: A brief review of the problems and challenges we face. First of all, the challenges of our market theory and market perceptions have affected the role of the market, and the market system and market mechanism are no longer what we imagined 30 years ago when we were reformed, or even the understanding that we had 20 years ago.　　In a market reality, the normal state is not complete, imperfect, Western economists have revealed that the so-called complete competition, information adequacy, rational choice, accountability, unified equilibrium are assumed, in fact, are purely theoretical models, the real economy does not exist. Mr Guo: Second, similar markets are developing very quickly, which can be said to be very fast fission. The personalized characteristics of the market are getting worse, which may be the result of technological progress and globalization. We can simply cite a product, such as beverages, fruit, pears, or wine, which may have a very different product market. Consumer groups are different. Economists have also investigated the fact that high-end beers and cheap beer drinkers are completely different, with little crossover. I know a lot of people here are drinking high-grade beer, I drink low-grade, in fact, we rarely cross, the market is completely different, and the substitution is not related.　　Even disposable energy, such as coal vapor, oil, wind, hydraulic market differences are also very large. Mr Guo: Third, the relationship between monopolies and competition and efficiency is beginning to blur. For example, the manufacture of civil aircraft, the world's two or three, you say is a monopoly or a minority? Laptops are not many, brand-name phones are not many homes, monopolies or oligarchs, and the pastUnderstanding is not the same, it is difficult to say that there is limited production, or to relax management, impact research and development, stimulate rent-seeking, chasing profits, using a lot of resources to maintain privileges, not the same as in the past. Including commercial banks, banks are monopolies, China's state-owned five commercial banks have not accounted for half of the loans, is about 45%, deposits more than 50%, we are worse than the United States, the top five U.S. banks accounted for the market ratio is more than 80%. Is investment banking a monopoly?　　I do not know, as if the competition is also more intense. Mr Guo: four, the natural monopoly industry is rapidly disintegrating in different ways. However, the attempt to introduce competition is a success or failure, the traditional meaning of the natural monopoly industry has become less. Like telecommunications, including gas, in the past we think it is definitely a natural monopoly industry, it is impossible to have two gas companies, but many people can not use gas, other energy, such as solar energy. China's railways are very monopolistic, but in fact there is a lot of competition between railways and highways and water transport, and it is hard to say that railways are a competitive industry.　　China railway three years ago can make the railway length accounted for 7% of the world, passenger traffic accounted for more than 20% of the world, there is a great competitive pressure. Mr Guo: On the other hand, many of the reforms in the natural monopoly industry have failed, such as the privatization of railways in the last century. A decade ago, California's electricity reform failed. Our own monopoly industry reform, exploration, generally speaking, I am afraid is also mixed, there are less successful places. We have explored joint-venture railway construction, foreign-funded railway construction, I have also personally operated this aspect of the work, I found that the completion of railway operations is very difficult, because very small railway companies, shipments are all over the country, who is responsible for the latter thing? What about the wagon?　　This is a big problem. Mr Guo: the product and housing markets have never been more financially developed, and prices of commodities and precious metals have fluctuated sharply. While there is no extreme crisis, there is little change in commodity indices from 1973 to 2003 and 30. After 2004, the double rose. At present the latest figure, crude oil is 86 dollars per barrel, although it has not reached the top level of the previous year, still half the distance. Gold is 1390 dollars, if according to comparable count, 1980 is 1538 dollars, this time the highest level. The dollar effective exchange rate index, whether nominal or practical, is low in innovation. In particular, the dollar's loose plans are now about 75%. But in the past 40 years, from the 70 's dollar crisis to the present, there has been a rise and fall, the average line is about 100%. By the way, the euro has been basically stable over the past 20 years, we are very worried that the United States will not appear the issue of banknote printing machine, unlimited expansion of the dollar, there is no good, no big help for the U.S. economy, bad for other countries, pushing the global asset bubble is a big problem. But the dollar is 60% of GDP, and we are about three times times as much. So the question of the market I think need to rethinkTest, what kind of market play what role? Mr Guo: the main reason for the low efficiency of the economy is not to say that the market, China's problem is mainly high input, low output, both investment and consumption are huge waste. The root of waste is the unreasonable system, the administrative intervention is too much, the environment of fair competition is inferior. Developed countries are the same, is not the market has completely failed?　　Not as a basic tool for resource allocation? Mr Guo: I am afraid that is not the case, the root cause of the financial crisis in the United States is social and political reasons, not market economy. Because the subprime mortgage and the entire mortgage, equivalent to GDP of Shivan housing loans, it is the direct result of the ownership of society, is the American dream, everyone must have a house, a big house, so relaxed standard lending. Moreover, governments or government-backed companies, Americans say China manipulates the exchange rate, typically used to manipulate financial markets, bond markets and borrow money. Fannie Mae and Freddie Mac are able to borrow at the lowest interest rates and refinance to other home loan banks.　　It seems that there is not much to do with the normal operation of the market, but government intervention, but the intervention is more indirect and covert.　　Mr Guo: In short, we look at the low efficiency of other economies, the main source of the market is not developed, or the adjustment of vested interests is more difficult, institutional barriers, more administrative intervention, who want to dismember the market, distort the market, or indefinitely spread the risk of the practice caused great danger. There are many differences between the internal structure of the market and the external conditions, especially in space and time to borrow money, resulting in a greater efficiency difference. Because of the relationship between time I do not expand.　　In this respect, Governments are not aware of the problem. Mr Guo: It is a great honor that we are pleased to see that the central government's proposal for the "Twelve-Five" plan clearly suggests that it is a very correct choice to deepen the reform of the price and factor market of resource-oriented products. In this context, I would like to say the third part, the construction of a harmonious relationship between the government and the market. In market economy we must also face the market is the basic economic relations, but also a basic way of allocating resources, we must use the development of the market to solve the problem of market deficiencies, which I am afraid for quite a long time or the main contradiction. There is a big difference in the rules of the market, from the additional value composition, Fixed assets depreciation, employee remuneration, operating profit, indirect tax these four components, some goods include one, some two, some three, some four.　　In short, these products and services are no exception. Mr Guo: "Twelve-Five" clearly put forward to carry out the classification of public institutions Reform, these institutions in China called Science and technology, education, culture, medical, sports, these are very large, related to these services in the Non-public services should be clearly market-oriented, this reform is a certain historical significance. To solve these problems, we must fully understand and respect the individuality of the market, we see a lot of similarities, but the personality has not been taken seriously. To straighten out these market relationships and deepen the reforms is not to add newThe distortion, the greatest threat, it is possible to simply apply a commodity market model to other commodity markets, or simply impose the concept of the commodity market on the factor market. Mr Guo: So, think carefully, the market difference, cabbage and radish market is very different, not to mention housing and land, Financial and Labour. Therefore, attention to market segmentation, attention to market stratification is very critical. We all know that the housing market is a very typical case, the market is strictly separate.　　From the international market, we think that more developed, very perfect, competitive commodity markets, international foreign exchange markets, gold market, in fact, there are very big differences. GUO: International foreign exchange market until now, it has been suggested that China's foreign exchange reserves should not be concentrated in the dollar or the euro, should be highly dispersed, avoid risks and increase profits. In fact, this is not to be done.　　Although the world's convertible currency, tradable currencies can even be called hard currency, but in the forex market, the actual weight of these currencies varies enormously, especially if you have hundreds of millions of dollars, or tens of billions of dollars, and more than 20,000 billion dollars, you don't have much choice. Guo: Our understanding of the market, although every day in the trillions of, Shin transactions, in fact, the real economy, real money, real transactions are very limited, this is not the same as the hype, and derivative products are very different.　　The same goes for commodity markets, where China is now becoming a major player in the international marketplace, and a central one. Guo: From the international market, we have a lot of common places, such as every commodity market, international foreign exchange market, gold markets are very uneven between the varieties, the difference between the metal is very large, short-term volatility, long-term performance smooth, spot and futures combined, derivative trading more developed, China has long been a decisive player, but the decisive role has been played out. For example, in iron ore consumption, China consumes half of the world's iron ore. But we have no pricing power and no decision-making power. Other non-ferrous metals, on average, are consumed in 30-40%. Market regulation, how to play the role of the market?　　The same is true of agricultural products. Mr Guo: Taking full account of the background of globalization, the need to open regulation and the fact that there are many examples here, the domestic foreign exchange market, the convertibility of the renminbi, I think the conditions of actual maturity is much better than we think. Apart from other reasons, the understanding of the market itself is also a reason, some people say that so many foreign exchange reserves can be canceled, dispersed? The new part does not increase, the Tibet sinks in the people bar. The problem is that the exchange rate mechanism is linked to the exchange mechanism.　　That's a problem. Mr Guo: In fact, in the domestic foreign exchange market, the renminbi is already convertible on most of the trading items, including capital trading projects. Although we must also maintain the supervision and control of Cross-border transactions. Real Estate ManagementAlso so, we see the recent inflow of foreign capital, speculation is very serious. But the most important problem is that in addition to plugging, to the domestic real estate development enterprises to open a normal financing channel. The problem is equally important, even more important, because there is no channel to invest, although China has the highest savings rate in the world. We have been an exporter of capital, the largest country in the first.　　The United States has become a net debtor since 1985 and is now the world's biggest debtor, but don't forget that these countries are the most competitive.　　In short, we need to look at what the government should do and what it should not do, and it should have a regular assessment and review. Mr Guo: the main problems in the current development factor market, in my view, to solve this fundamental problem, reduce control, segregation, enhance fair supervision, improve the ability of the situation, from the financing market, risk and efficiency should be balanced, especially we can not imagine that our risk is from the financial market dispersed, dissolved,　　Must be within the system. Mr Guo: In addition, China's situation can not be simply compared to foreign countries, large banks can not fall, there is systemic risk, China's banking system risk, I agree that the big banks have higher requirements. But in China, too, small banks also have problems that cannot be closed, and can have systemic effects.　　More importantly, the proportion of direct financing, especially the various companies in municipal debt, high income debt, including stocks of the gem, private equity funds to further accelerate development, to solve the capital market, financing market, the most fundamental problems. Mr Guo: in the labour market, I think the main problem is to provide equal bargaining status for both the supply and demand sides, the role of the trade unions is very controversial in history and will play a different role in different periods. But as far as we are concerned, the role of trade unions is missing and inadequate.　　The other is to unify the market, in terms of wages, welfare and social security, the average level of migrant workers is actually the city has a registered household workers to do the same job One-third, different pay for work. Mr Guo: the problem of the core of the land market is also to open the main gate and block Pang men. First of all, we need to implement strict post control, protect agriculture, protect the environment, and make planning into law. However, farmers must be admitted to the right to use land for a certain period of time, under the premise of planning, to allow him to enter the market free trade. This is a way out of the problem.　　Another aspect, is China's peculiar problem, wants to rectify and compress collective construction land, under the premise that the interest relation is transparent, allow enter the market. Mr Guo: There is also an important problem, one of the outstanding problems in our resource-strapped countries, namely, the huge potential of the city's stock of land, in Beijing and Shanghai, not to mention the new city. The density of the building is still very low.　　The extent of land use, intensive and economical use, is far from the population density. Mr Guo: In short, I want the market to play a fundamental role in the allocation of resources, there are many things to do, we must continueContinue to firmly clear, open and pragmatic and gradually perfect attitude to deal with these relations, and strive to "Twelve-Five" period to make China's market system maturity has a significant increase. Thank you!