Keynesianism Trips in China?（原創）

In 2004, when the government was first offered with the China-world proportion index of consumption of oil, cement, and iron ore, it was shocked as well as many scholars, thus leading to restrictions on steel industry, cement production, together with real estate. Seen from today's perspective, can that be a direct cause to a lack of construction materials, further more, rise in real estate price since 2006? Those who argued government intervention to depress a "too ho" economy now quiet down. What's more, after years of high-speed growth, we are no longer sensitive to high investment rate, high export growth, and resource consumption index in this industrialized and urbanized stage. Because the indicators in matured market can hardly bear themselves out in China.

We've learned from books that a higher interest rate leads to an increase in saving and decrease in consumption, while a lower interest rate is to reduce saving and give rise to consumption and investment. Stock market slumps at a rise in interest and goes up when interest rate goes down. However, China's situations again and again put these theories under question.

I can still remember economists loudly arguing an insufficient demand in domestic market and the enticing power of the astronomical figure saved in the bank to pull economy. Look at today, our CPI is constantly running at a speed that is terrifying. Perfect theories fail if used without taking special circumstances into account.

In Keynes' theory, economy recession is mainly resulted from the decline in aggregated demand, and three basic psychological factors leading to insufficient effective demand: marginal propensity to consume, liquidity preference and marginal efficiency of capital. In China, three reasons result to citizens' conservative attitudes towards consumption: expensive education, high fees medical care charges, and an individual-owned house that needs a life-long saving plan. Each of them can be vital, and do not threat in America and England where Keynes develop his theories.

What are our fundamental pitfalls? China's deeply-rooted problem lies in its unreasonable economic structure even social structure. The weak position of enterprises in market disable them to contend with government; consumers have twisted consumption demand because social security system is not comforting. Wandering at a transition stage, China is inevitably met with a number of problems. Any nation must make its economic policy based on its own economic situations. The effective methods are not from books, let alone carried from other nations. If Keynesianism unfortunately fail in China, and if it do work out well in an government-led economy, and we do expect a lot out of it, maybe what we should do at first is make adjustment in our own system.

作者：西南財經大學通訊員 楊倩