Per 睡觉's request

睡觉大亨 said...

BONNIE姐姐能不能为我们解读下最近中国这个4万亿的救市计划算不算政府的又一敛财手段啊??
目的是拉动内需,刺激经济,可用在能让人民无后顾之忧花钱的社保,医保,养老是整个计划资金的1%...不用来发消费卷,也不用来发展民间企业..却大部分去用来建设几条可能空空荡荡的大路..这合理么~~~
我很郁闷,看着台湾消费卷拿的啪啪的,很是眼谗~~
PS:最近很喜欢听郎咸平吹牛~~~

February 9, 2009 8:35 PM

I am glad you are keeping track of the news! A lot going on to digest. Here are my thoughts.

The infrastructure has been the main construction point as China currently is under the developing process instead of the Taiwan's mature social situation; and the more critical problems will be caused only if the huge gap between poor and rich has not been relieved-a widespread concern in China. Some simple ideas about that: a misleading direction might provoke worst situations: 1) more bribery and corruption through such consuming coupons since people can use such tribute things but not cash anymore and this way would be harder to control by prosecution; 2) it limits people consuming space and choices; 3)black market since Chinese people are always very clever (like people resell the gift certificates on a certain level of the original price, e.g. 20RMB for 100RMB gift card, or this coupon becomes a special goods in the commodity circulation); 4) it is hard to make the voucher can be gathered from a fairly selection of the consuming places, example like the government might choose this mall but not that mall to distribute coupon, or the government might choose mall but not KTV to reallocate the coupon, or it is more difficult to make an impartial competition to keep the market's balance.

Honestly, Taiwan has not really put the consuming certificates into practice yet, and Japan's example cannot prove this actually works well. Chinese special national condition is: so many people dont have a basic "well" living environment and living capability. What they concern is focusing on the food, ordinary clothes for cover or some other fundamental living needs. Do you know their real expectation is for what? Can the village people access the market to expense the consuming tickets? Or they might just save that but not spend? You are above the average living level of Chinese people, so you dont have the representativeness for the government to plan how to use the stimulus capital.

In terms of the proposed stimulus package, I AM interested to see the government focus on 'social' infrastructure a little bit more than 'hard' infrastructure like roads. The excess saving in China, in my opinion, is due to very high precautionary savings -- for example saving in case you get sick. Suppose the government would give every citizen a 'health savings account'. This money would go into the banks, which gives them a bigger deposit base and therefore ability to lend. Second, if everyone has this health savings account, they would not need to do so much precautionary saving, and would be willing to spend more on products. So, the government would get the production boost that they are looking for. However, such a health savings account would not employ all the construction workers that are now out of work--so that is a problem.

We should admit that it has been difficult for the Central Bank to manage business cycles in China because its ability to do monetary policy is constrained for several reasons. First, interest rates do not play all that much of a role in allocating credit to borrowers. Rather 'credit guidance' seems to be more important. Statements on credit guidance are more an on-off switch than interest rates, which act more continuously--that is however, if the market for lending and borrowing is more mature and stable. For example, in the US generally speaking interest rate changes lead to more or less lending or borrowing on a continuous basis, but now with the unstable market it is more similar to China!

In addition to the problem of on-off credit guidance, the People's Bank also has the problem of dealing with the large quantity of international reserves and the need to sterilize. This problem may become less severe as the PBOC now wants more credit to enter the economy.

As for the potential inflation later on--right now the global downturn is quite severe. So I do agree with you that, it is important to use all levers to get consumption, production, and investment back on track. At the same time we should also think about how to deal with potential inflation the next or after next year when nowadays' deflation is over.