Li Xunlei: China Should Change The First Goal Of Economic Development.

However, although governments at all levels from local to central governments all regard the GDP growth rate as the primary goal, at the end of the year, when the performance of the government is evaluated, what is the actual implementation result closer to the goal, the better the performance, or the larger the deviation from the target? Theoretically, the closer the target is, the better the performance is, the better it is impartial and just achieving the goal.

But in the concept of the government and the public, it seems that the more glory goes beyond goals, the more outstanding achievements are.

But in fact, we are increasingly aware that GDP growth is too fast, which is not conducive to sustainable economic growth, nor is it consistent with Scientific Outlook on Development.

Therefore, the central government consciously lowered the growth target of GDP 10 years ago. For example, when preparing the fifteen plan, it hoped that the economic growth rate could be reduced everywhere, so the target was set at 7%, but the actual implementation result was 9.5%.

From 1994-2009 years of GDP goals and implementation results, the GDP growth rate has been overfulfilled as a contribution. Later, however, it hopes to lower the GDP growth rate and become a constraint target.

However, the actual economic growth has not slowed down. In addition to the failure of the Asian financial crisis in 1998, it has been overfulfilled every year (see chart below). At the same time, there has been no public criticism of whether the higher level government is inferior to the government or the government that it is in charge of.

It can be seen that the GDP growth rate, the first goal of the national economic development, is actually a soft constraint target, and the ranking indicators such as "energy conservation and emission reduction" are very hard targets, which can be "one vote veto" for the achievements of the government.

Since the growth rate of GDP has become a leading indicator of economic development, can it be changed? In fact, foreign indicators on how to make the sustainable development of the economy have been deeply studied, and there are a lot of indicators, such as "Genuine Progress Indicator (GPI)" for GDP, GPI = household consumption expenditure + household chores not counted in GDP, all kinds of voluntary labor and service offense, destruction of environmental factors (resource depletion, ozone damage, pollution, etc.) divorce and other negative family factors, family pressure, family debt, pressure, wealth and income distribution.

In fact, China's economic development goal is not static. For example, from the early 50s to 1987 of last century, China has always taken the growth of gross output value of industry and agriculture or total social output value as the primary goal of national economic development; 1988-1993, it used the GNP index and began to use GDP only after 1994.

Although as a national level, GDP has been regarded as an expected target rather than a binding index, but in 2009, it again proposed "guarantee eight", which shows that its function is still very sound.

Especially for many local governments, there is more motivation and motivation to set the target of GDP growth rate very high, so that we can win more national large projects to settle in the local area, and at the same time, we should also find ourselves a reason to work hard.

When the provinces and municipalities reported the 12th Five-Year plan, many places have proposed the goal of doubling GDP in five years, which means that the average growth rate of GDP in these five places will be around 14.8% in the next five years. On the one hand, the central government has been emphasizing the need to pform the mode of economic development, while many local governments still regard the pursuit of economic growth rate as the first goal, taking the investment of iron and public investment and heavy chemical industry as the main way to boost economic growth.

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Therefore, replacing the total output value with GDP means that the market economy will replace the planned economy. When a harmonious society is needed, a more scientific and more people-oriented index should be used instead of GDP.

The author thinks that it is more scientific to replace the GDP value added per capita disposable income.

Because the increase of GDP can be achieved through ineffective investment in fixed assets, but it does not necessarily increase the income of residents in proportion. Therefore, we often see that the input-output ratio of GDP in some backward provinces relative to fixed assets investment is only 1/3 or even lower than that of developed provinces.

If the growth rate of per capita income is used as the first indicator of economic development from central to local level, local governments will pay more attention to the benefits of investment and the benefits to the ordinary people.

In addition, the superiority of per capita index to aggregate index lies in the rational allocation of resources.

For example, Guizhou and Gansu are the two provinces with the lowest GDP per capita. In fact, Guizhou's natural conditions are much better than those of Gansu and Ningxia.

If Guizhou continues to use the GDP growth rate as the first indicator of economic development, it will continue to overhaul and speed up infrastructure construction. The result is that the efficiency of large investment in fixed assets is not only high, but also the 10 million people's poverty alleviation is not too effective.

If the per capita disposable income growth rate is taken as the primary evaluation index, the local governments in poor areas will encourage the population to move to the developed countries to raise the per capita disposable income level.

In fact, the level of per capita income in the underdeveloped areas of developed countries is very small compared with that in developed areas.

But China has long been through the household registration system, social security, learning, work and other restrictions on population mobility, in fact, people have increased the gap between the rich and the poor in the region, not in line with the Scientific Outlook on Development.

For this reason, the author's suggestion is that at least when the economic development targets are put forward, the indicators set up can be differentiated, and the same index should not be used uniformly. For backward provinces, the per capita index should be more reasonable and conducive to the eradication of poverty.

We should evaluate and reflect on the implementation of goals over the years.

In addition, should we evaluate the past five years' planning and the annual report on the national economic and social development plan of XX? It is a goal that can not be achieved every year, but it should be evaluated and reflected.

Some goals, such as GDP growth rate and unemployment rate of urban registered population, are always better completed; however, such as narrowing the income gap between urban and rural areas, narrowing the gap between the rich and the poor, increasing the income of residents' property and expanding the proportion of direct financing, are always put forward every year, and there is no obvious progress every year.

What is the reason? The reason is that we are not fully aware of the fact that there is a certain or even mutual contradiction between the various development goals.

For example, putting GDP growth in the first place, the government will act as an entrepreneur, but it doesn't have to bear the cost control and profit margin that entrepreneurs should bear. And the most easily controlled way for GDP to maintain rapid growth is government led investment. Therefore, relying on bank credit is the simplest way, and equity financing, debt financing and other ways require higher financial pparency, which does not meet the requirements of timeliness. This is why China's direct financing share has not been significantly improved over the past 10 years.

Similarly, the pformation of government functions was also a slogan raised many years ago. Despite the progress made in the pformation of government functions, it is still not obvious enough. The reason is that we have overemphasized the functions of the government in developing the economy in formulating development indicators, thus weakening the government's service function at the same time.

Once the primary goal is identified as economic growth, other goals are often difficult to achieve simultaneously.

For example, after the economic growth began to increase in 1992, the GDP growth rate was higher than the per capita income growth rate by 2.9 percentage points. The income gap between urban and rural residents has expanded from about 2:1 in 1990 to the current 3.3:1.

This shows that in pursuit of GDP growth, it is difficult for residents' income to grow at the same time, and can not narrow the income gap between urban and rural areas.

Again, the scope of the objectives will determine the result: since the local government is not the unemployment rate of all the workforce, but the unemployment rate of the urban registered population, who will bear the responsibility for the employment of the rural population? Moreover, if there is no quantitative assessment index, only the slogan expression is equally difficult to achieve the goal. For example, although the goal of increasing the income of residents' property has been put forward, there is little action, and the result can be expected.

Perhaps the dialectic logic in Chinese culture is so powerful that the goal of economic development is always clear and clear.

But it seems that there is a lack of quantitative Western model analysis logic, ignoring the conflict between multiple objective functions, which leads to the same goal each year, but the actual result is far away from the goal.

Therefore, it is indeed necessary to bring out the literature, such as reports, plans, resolutions and decisions published in the past year, to find out why some goals are put forward year after year, and to know the new ones in order to provide a reference basis for formulating practical goals and changing the way of economic development in the future.