The current Sino -US trade friction is getting worse.The reason why Sino -US negotiations failed to reach a final settlement agreement was that the two sides failed to reach a compromise in terms of the core concern of solving the root cause of Sino -US trade imbalance.One of the focus of the dispute between the two parties is that the United States requires that China to cancel government subsidies in Made in China 2025 and believe that it has brought unfair competition to similar American companies; and China insists that this is an independent national strategy that promotes its own industrial upgrade.Retreat.
The author pointed out in the article published by the Morning Post on May 3 that industrial policies, including Made in China 2025, have many controversy within China, and should also meet the relevant provisions of the World Trade Organization (WTO).
This article further put forward: China relies on fiscal subsidies to support the development strategic industry. It is not ideal in terms of theory or practice; it should be reduced in the future and expand tax reduction.Industry and promoting industrial upgrading will have better effects and help to resolve Sino -US trade frictions. To achieve this, it is necessary to overcome the government's cognitive and interest obstacles.
Depending on the disadvantage of the strategic industry of fiscal subsidies
Theoretically, the practice of relying on government subsidy development strategic industries is essentially the idea of government -led industrial development, with the color of a planned economic ingredient.Many marketing economists believe that because the government has no motivation for profit, there is no enterprise strong, the incentive mechanism is not flexible, and the decision -making mechanism is not effective.Compared, it is difficult to achieve scientific decision -making and ideal effect.
From a practical point of view, relying on government subsidies to develop strategic industries, it has not played a good effect, but on the contrary, many problems have caused many problems, such as: many industries and enterprises have low efficiency of subsidies for subsidies, and they have not even lost.Development causes excess capacity (one of the key targets of China's internal supply -side reforms), and then dump external (one of the important reasons for China's foreign trade friction); which industries and enterprises are subsidized to a large extent on government officials’s government officials’s government officials’s government officials’s government officials’s government officials’s government’s officials' officialSubjective judgments have caused unfair competition; it is easy to bring corporate bribe officials to obtain subsidies and even deceive corruption and fraud in national subsidies.
It should be pointed out that it is difficult to rely on subsidies to generate real competitiveness, and may even have false competitiveness.For example, China once provided a lot of subsidies to the new energy vehicle and robotics industries, but the international competitiveness of these industries is not strong, far less than similar industries that Japan and the United States mainly rely on market forces.
For another example, China once provided a large number of subsidies for the photovoltaic industry, causing overcapacity, dumping to many countries, occupying the international market, and it seems that competitiveness is strong.But this is a false competitiveness, and its profit comes from subsidies to a fairly extent.
In the first half of this year, due to trade friction pressure, the Chinese government canceled these subsidies, which led to a decline in profits and even difficulty in maintaining relevant enterprises.Not long ago, they jointly called for the Chinese official media Xinhua News Agency and the government to ask the state to restore subsidies.This shows that they lack real competitiveness.
Many people believe that many Western countries also have industrial policies and subsidies. Of course, China can do it and should also do it.It should be seen that there are currently two differences in industrial policies and subsidies between China and Western countries: First, industrial subsidies in Western countries mainly exist in agriculture and a small number of industrial industries, while China exists in many industrial industries.The coverage is much higher than that of Western countries.Later production subsidies.
China can learn more about the industrial policy of Western countries.Of course, China can also claim that its industrial policy does not need to be the same as other countries.However, following the same or similar approach to most countries will help reduce the trade frictions and disputes of their own country, and create a better external environment for themselves.
At the same time, it should be seen that because the Chinese and Western systems are different, even the same form of subsidies may be very different.Western countries have a perfect supervision mechanism for government spending on government subsidies, including the supervision of internal government, the supervision of the government and the public opinion representatives of the government, so the subsidy may have better results.
The unique political system in China has made the supervision of these two aspects, especially the latter, which are not perfect. Therefore, the effects of subsidies may be limited, and more corruption and fraud are brought about.
Some people may think that the above -mentioned problems about subsidies are problems in the implementation process, and they can be solved by being converted without giving up subsidies.Some scholars supporting industrial subsidies have even used a metaphor to pour bath water and cannot pour together with their children to explain this view.
But the problem is that if you change it, the effect is always unsatisfactory, and the problem cannot be solved, which means that the problem may be an institutional problem and it is difficult to solve it.In this case, reducing or abandoning the subsidy's choice is a more wise approach.
It should be expanded to support the development of strategic industries by increasing tax cuts
After reducing subsidies, the government can support the development of strategic industry by expanding tax cuts.There are two ways to specify.One is to make targeted tax cuts to enterprises determined by the government, and the other is to reduce tax reduction of enterprises in all industries, so that enterprises have more their own funds, and the enterprise autonomously decides how to develop the strategic industry.
It should be explained that the targeted tax cuts belong to the indirect subsidy of specific industries in the World Trade Organization Subsidy and Anti -Subsidies Agreement, which still belongs to the industrial policy of the government's leading industry.Universal tax cuts are macro fiscal policies that stimulate economic growth. There are no above problems. It should be used as the main form of tax cuts.
Use universal tax reduction to replace the direct subsidy for the targeted industry for specific strategic industries to support the development of the strategic industry, and its effect may be better.The reason is that for enterprises, it is an extra wealth from the government. The enterprise may not cherish it, resulting in low efficiency; and the increase in the retaining profit after tax reduction is the company's own funds.Will cherish it, high use efficiency.
In essence, relying on subsidies to support the development of the strategic industry determined by the government is the development model led by the government; and through the government's tax reduction and letting enterprises determine what strategic industries to develop by their own funds, it is a market -led development model.The effect will be better.
People may have two questions about the use of universal tax cuts and self -determination of their own funds to develop.The first question is, will the company choose the strategic industry that the government wants to develop?This doubt is essentially because the government or the enterprise should define the strategic industry and the development of the leading industry.As mentioned earlier, the government has determined the focus of industrial development. Compared with the independent decision of industrial development, it is difficult to achieve the scientific decision -making and ideal effect.
This is determined by the government's disadvantages of profit -driven, incentive mechanisms, and decision -making mechanisms.Therefore, the government hopes that the strategic industry that the government wants to develop is not necessarily an industry that really develops value, and its judgment may not have the accuracy of the company's judgment.
The second question is that most of the strategic industries are emerging industries, with great investment and risks. Are companies willing to develop these industries?In terms of development, although emerging industries have a lot of investment and risks, once the investment is successful, its return rate is also very high, and it is full of high profit opportunities.Enterprises are direct -oriented, and there will always be enterprises to keenly capture high -profile opportunities, willing to bear the corresponding risks, and invest in development.Risk investment has developed internationally. In recent decades, it has also achieved good development in China, which is evidence.
In terms of development capabilities, because venture capital can focus on many investment entities, it can overcome the problem of insufficient strength of a single investment entity, and support high windInvestment demand.
It should also be seen that many emerging strategic industries are emerging industries in China, and emerging industries for developed countries such as the United States, Europe, and Japan.In other words, China and developed countries may be on the starting line.In this case, the simultaneous development of Chinese and foreign enterprises can do it as well as foreign companies if they all rely on market forces.For example, in the Internet industry, China and foreign countries have almost developed simultaneously (the United States has just been introduced by China shortly). China's online shopping and mobile payment, such as Ali, and JD.com, have developed well and lead the world.
For example, in the communication industry, Huawei in China has also done well and has world -class competitiveness.None of these companies were supported by the government.This shows that Chinese enterprises are willing and capable of developing emerging strategic industries. China can rely on market forces instead of government subsidies to develop emerging strategic industries.
Reduce the resistance of subsidies to expand tax cuts and go out.
In reality, reducing subsidies and expanding tax cuts may encounter greater resistance and need to overcome.
The first is the government's obstacles.Due to the system and historical reasons, the Chinese government is accustomed to guiding and grasping the national economic development direction by itself. Through taxation, financial resources are concentrated in their own hands, and then supports the development of industries that should be developed according to their own intentions and subsidies.This seems to be a matter of nature to many government departments.The tax reduction is essentially the company's independent decision of industrial development, which is a market -oriented development model, and does not meet their inertial ideas.
China ’s tax cuts some time ago have been criticized by many people and scholars as the name reduction, which has caused discussions on Sang Hongyang.The well -known financial writer Liu Mingyan posted a post saying that China's tax cuts and losses were the root cause of the inconsistency of the market economy.
Followed by the government's obstacles.Government policy is always realized by specific government officials.Develop a specific industry through the method of collecting tax (universality) and then subsidies (specialty), and officials responsible for the formulation and issuance of government departments who are responsible for the formulation and issuance of subsidy rules can decide who can get subsidies and how much subsidies can be obtained. This will provide them with providing themGreat rent -seeking bribery opportunities.This is the corruption problem caused by the subsidy mentioned earlier, and it is difficult to eliminate under the current system.Once the subsidy is changed to tax reduction, the opportunity of officials will be completely eliminated.
Therefore, some people in the industry pointed out that cancellation of subsidies is equal to reducing the military power of government officials and will threaten the fundamental interests of relevant officials.Therefore, they may try to hinder this reform.
To eliminate the above two obstacles, it requires the common efforts of the folk, industry and academic circles to call on the reform of the government's highest decision -making layer cognition, firm confidence and trust in the market system, eliminate the resistance of interest groups, restrict the power of the government, promote economic developmentThe model has changed from government -led to market -led, which is not only conducive to the healthy development of China's strategic industry and the macro economy, but also to eliminate the root cause of the system of trade friction between China and the United States.
(The author is a professor of economics at Shanghai University of Finance and Economics in China)
China relies on fiscal subsidies to support the development strategic industry. It is not ideal in terms of theory or practice; in the future, subsidies should be reduced to expand tax cuts, so that enterprises rely on their own funds instead of national subsidies, independently develop strategic industries, promote the industry to promote the industryThe effect will be better, and it will also help resolve Sino -US trade friction.
