This article, the history of China’s economic miracle and the future of the Big Bang that clear

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Lead: next financial industry, how to go?

Wen | Li Yang source | National Finance and Development Laboratory, ID: NIFD2015 Edit | Poker investor, please indicate the source

Mr Li Yang recently about the financial sector elocution, Awaken the common saying quite the taste, he is a personal interpretation of the financial work conference; one is directed at Fudan his recent analysis of the debt crisis
crisis in the financial sector

this past eight years, our financial sector there has been a lot of things, for example, there are four trillion fiscal stimulus, raising the debt level very quickly.
2013 appearance money shortage, the Internet financial year lending rate soared to 30%.
The stock market, doing their utmost, 4000 just started, turn-year, thousand shares limit.
Real Estate in 2015 to stimulate the 2016 strike, if in retrospect, to stimulate a year, against a year, a year stimulus, against a year.
The foreign exchange market, the 811 exchange reform, sharp drops from 6.229, is now relatively stable.
Foreign exchange reserves, we are very, very sad, calculated in accordance with our researchers, two years, a net decrease of $ 1.25 trillion, if coupled with the current account surplus this year we have 500 billion, it will be nearly two trillion.

Today we reprint is his 2015 an old article, article explores several motives behind China’s economic miracle, while financial liberalization and financial Big Bang, laid reliable in order to improve China’s savings rate
structure and mechanism basis.

On the one hand is a long-standing financial repression and soft restraint system chronic illness; on the other hand, placed in front of us is a financial excesses of the economy and the resulting debt crisis two
wonderful phenomenon exists in the transition period of China.

the next financial industry, how to go?

The key to the miracle of China, lies in creating an effective institutional mechanisms to mobilize and allocate savings.
From 1978 to 1994 just 15 years, China’s financial institutions from the People’s Bank a world exclusive, “explosive” to become a tiller including central banks, (national and regional) commercial banks, insurance companies, finance companies, urban and rural
credit unions, non-bank financial institutions (securities, trust, leasing, funds, etc.), policy banks, including a complete range of modern financial system, stock market, money market, bond market and so direct financing has gradually become
a familiar place for investment.
It is this explosion of unprecedented laid a reliable foundation for the system and mechanism to improve the Chinese savings rate.

would like to dedicate this article to the fortieth anniversary of China’s reform and opening.

Since 1978, more than 30 years China’s economic development, showing a series of distinctive features that caught worldwide attention, the most remarkable person, when pushed a high savings, high investment, high growth occur simultaneously
and the internal consistency to last for decades.
In addition, China’s economic growth is also accompanied by long-term balance of payments current account and the capital and financial account of the “double surplus”, the traditional paradigm of development economics which are not consistent.
These phenomena are so unique that the international community will be called “Chinese mystery.”

This article from the transfer of surplus labor, analyzes this development path on which to produce and was key to the success and support their institutional mechanisms, in order to uncover the mystery of the theoretical logic behind China.
We believe that the surplus labor from agriculture to industry (industrial), from rural to urban areas (urbanization), a state-owned to non-state (market) continued transfer is the key to long-term growth of China’s economy to maintain, and high savings rates and
high investment rate of long-term coexistence, mutual support, both the labor force is a prerequisite for sustained transfer and inevitable result of this development model, but also constitute the basis of this model is maintained.

China’s development road of practical experience and theoretical logic revealed by global significance, because it is a once said that “a poor and white, large population” as a large developing country’s basic national conditions, effectively broke the long-term problems
the majority of developing economies to take off deadly bottleneck – development fund shortage.

Development economics has a famous “double-gap” theory, the key points are: developing countries so backward, because that is where the prevalence of two bottleneck restricting the development funds – including the presence
the savings gap, namely the lack of domestic savings; Externally, there is the foreign exchange gap that is difficult to attract foreign investment.
Because of the severe funding constraints, developing countries ambitious investment plan will not be implemented, provide employment opportunities for its huge population and poverty task it is easy to fall, it is also easy to grow vision come to nothing.
Therefore, to break double gap dilemma, developing countries out of poverty and backwardness, ultimately the key to modernization.

For decades, the two-gap theory tested.
The crisis began, the world seems to see the future to get rid of the curse of the double gap.
In the first years of the crisis years, when the United States and other developed economies every situation Kusakabe, continued its “wide amount” is overweight, has affected the economy of developing countries, alone out of the wave of beautiful growth market,
so that the “two-speed derailment” exclaimed.
However, when the United States began “wide amount of exit”, the ED also a large number of heavy capital reflow of the United States, people do nothing to see 70 to 80 years of the last century occurred in Latin American countries, as well as the 1990s occurred in South Korea, Thailand and other Southeast Asian countries
immediately repeat the old story, the developing countries have been caught in the economic slowdown, inflationary pressures increased, stock market crash, the deterioration of the balance of payments, capital outflows and difficulties in the currency exchange rate volatility in the sharp depreciation of.
This wave of “roller coaster” cycle depressing reminder that: most of the domestic structural distortions in developing countries has not improved, dual-gap predicament remains unchanged.
This situation is more fully explained: depth development of globalization and the United States continues to play a leading role in the international environment, no country can be spared.

It is against this background, the world looked after the crisis, people are more aware of the value of China’s development path: Since 1994, China will basically rely on their own strength to get rid of the “two-gap
“bondage; Yiping abundant domestic savings, China is not only the US-led economic spillover impact of domestic policies in developed economies,” despite the wind and waves, sit back. ”

This is a miracle of global significance.
Therefore, to explore China’s development path, one important task is that summarizes the key results in this miracle occurred, and corresponding changes in institutional mechanisms associated with it.

key to understanding the status of the savings / investment in the economic operation of

The basic characteristics of modern social reproduction is to expand production, and the scale expanding reproduction needs
there are constantly new capital formation.
Therefore, investment, and it is based on the formation of new capital, is one of the core task of a country’s economic growth and economic development.

From the operating mechanism of macro-economic point of view, the reality of the process of capital formation consists of two aspects.
The first part of the process of capital accumulation, namely saving process; the second part is the process of using the savings that the investment process.
The core of the macroeconomic balance is to keep the savings and investment balance.
Here, the savings is a kind of economic concept, it refers to the unconsumed portion of national income.
Residents, savings refers to the disposable income remaining after subtracting consumption; in the enterprise, the savings refers to the balance of the distribution of profits to its owner after tax profit deducted; in government, savings refers to the government department
revenue deducted for the remainder of the current account expenditures defense, education, administration, social relief and so on.
Main source of government savings tax, fee income and other income and debt.

portrayed in the national economy macroeconomic theory, the constant savings equal investment.
However, this savings and investment “equal”, but a “hindsight” (ex-post) of the definition of sexual relations.
In other words, the so-called “ex post” is in terms of results.
The key elements of keeping the identity of the “inventory” particularity in the economics of the system: the supply side of the national income, output of new business inventories are classified as deposits; and in the demand of national income (ie use) end,
it also has been defined as inventory investment.
We can say that it is this inventory in the national statistics of dual existence, the “savings” of course equal to “investment.”
Of course, it is precisely because of inventory in supply and demand in this dual existence, inventory will become particularly macroeconomics is one of the core issue of the economic cycle.

Since the “after”, there is a “pre” (ex-ante).
In the economic analysis, the “advance” refers to the various economic agents to follow its own decision-making function, in which the economic activity of self-determination in accordance with the objective environment.
In other words, “advance” is just the starting point in terms of.
There is no doubt, from the point of view of the whole society, savings, and investments in advance in advance is always unequal, so he may have insufficient savings or underinvestment phenomenon appears.
When the lack of savings, the economy (after the fact) they exist inflationary pressures; and when there is insufficient investment, it may be (in hindsight) leads to increased inventory, resulting deflationary pressures.
In this way, the core task of macroeconomic regulation and control, is urged to save and invest equally in advance; when the conditions are not equal appears, will have to try to adjust to both ends of their relationship through a variety of policy instruments.

In a market economy, because people only exist on a large part of the social division of labor and exchange system, savings and investment entities subject phase separation will become the norm.
The usual pattern is: residential sector as the main consumer, much higher than their savings to invest in the sector, so it is society as a whole the largest surplus funds sector; the corporate sector as investors, their savings are often insufficient to support investment in the sector,
so it is society as a whole in the short largest financial constraints sector; government savings and investment dynamic definite rules, but in many cases, government savings are insufficient to support the government’s investment, therefore, government departments usually short of funds constraints department
.

Now that savers and investors often held by different entities in the national economy, each subject capital surplus and deficiency conditions are different, so there will be savings into the investment necessity, there will be a corresponding conversion of savings to investment
the mechanism.

savings into the investment, to finance through the media, but also by the financial media.
The former refers to the government through taxation, fees and other means to save a part of folk together, and ultimately to the way the budget expenditures invested by the government; the latter refers to the savers by purchasing certificates of deposit, foreign exchange, stocks, bonds, financial
way products and other financial products to their savings into the hands of investors (through financial intermediaries), investment by the latter.

Like all developing countries, pre-reform China was short of savings constraints of the country.
1958’s “Great Leap Forward” and the level of domestic savings to support “foreign leap forward” so catastrophic damage to the national economy, because “leap” needed domestic investment far beyond 1977.
Since the founding of Comrade Chen Yun summed up in the 1981 State Conference on lessons learned during the economic construction in my country, it has the general policy of my country’s economic work summarized as “feeding the people first, then building” [1].
He used simple language to clarify the relationship between the national economy in several types of key factors.
Here, food comes first meaning; warm enough apart, have savings; With the savings, investment (construction) have non-inflationary sources of funding support.

Therefore, the effective mobilization of savings, membership in order to support a high level of investment, start the process of industrialization and urbanization, a growing school-age population to ensure that employment has become the number one task of reform and opening.
Quality words, if China’s economic miracle thanks to the demographic dividend, industrialization and urbanization while deployed and complement each other, then, of these factors, “the situation will be,” it is clear that the steady improvement to start saving and investment rates.
In this connection, the key to the miracle of China, lies in creating an effective institutional mechanisms to mobilize and allocate savings.

[1] “Yun Biography”, Central Literature Publishing House, 2005, pp. 1616.

reforms to stimulate savings will

mobilization of savings, the first meaning, is to stimulate microeconomic willingness to engage in savings.
The goal, before the fourth session of the Third Plenary, mainly through the promotion of progressive decentralization reform and develop the financial system achieved; after 1993, the overall implicit in the process of building and improving the socialist market economic system.

nearly three decades before the economic and financial sector in the People’s Republic of China is run under the traditional planned economy, after more than thirty years to the Chinese economy, financial reform, it is a planned economy system
to a socialist market economic system, the closed economy to an open process of economic transition.
In China, this course initially adopted gradual decentralization reform model.

differs

market economy and a planned economy in the fact that the latter decided to unify deployment of resources by the central planners, while the former is made by a large number of decentralized economic decision-making parties according to market price signals, these decisions
collection guide the allocation of resources.
Therefore, the planned economy to a market economy essence, that is the decision-making process of resource allocation by “centralization” to “decentralization.”

This decentralized resource allocation powers ( “separation of powers”), consists of two parts: first, the government decentralization to businesses and households, the steering public business from a highly centralized planned economy,
business oriented market economy.
It is a “economic decentralization”, which represents the highly centralized planned economy to a decentralized market economy reforms aimed at giving the majority of clear property rights microeconomic stimulate their savings, investment and production enthusiasm;
second, the central government to local government decentralization, which is “administrative decentralization” one among all levels of government, including reconfiguration of powers and expenditure responsibilities between the central and local levels designed to stimulate large-scale
the enthusiasm of the local government economic development.
Unlike the former Soviet Union and Eastern European countries, economic decentralization and administrative decentralization reform in China are taking a gradual, rather than “big bang” pace.
This is not only in the understanding of the objectives of the reform is to gradually deepening, but also in the reform measures also step arrangement, and as far as possible along the Pareto efficiency improvement path to be implemented.

can now confirm that, compared with the former Soviet Union and Eastern European countries hope that prevailed at that time from a planned economy step “jump” to a market economy naive idea, gradual decentralization reform is undoubtedly a pragmatic, prudent
and success.
The process of decentralization gives the parties to the microeconomic property rights, its economic activities and create a framework for incentive-compatible, thereby stimulating investment in power savings, making it revitalized economy; and incremental approach is to let policy makers, including
All parties, including the economy can have a constantly explore new things, trial and error, review and become familiar with the process, but also to establish new mechanisms and perfected in such a gradual process.

Looking back over thirty years of economic and financial system, we found that 1994 was an important watershed.
This aspect refers to the “Decision on Issues Concerning the establishment of a socialist market economic system,” November 14, 1993 Third Plenary Session made, and finally identified the clear objective of building a socialist market economic system, which thereafter
the previous reform initiatives and there is a huge difference; on the other hand it is because, one of the most fundamental macroeconomic performance in the relationship – the relationship between savings and investment – there is a directional difference before and after this.
After

establishment of a socialist market economy targeted, “plan” and “market” unnecessary controversy has basically ended.
In the focus of the reform, the focus of talk before 1994 “devolution of power” rather than on changing the system of property rights, only concern “to benefit” rather than on the parties to establish a simple approach microeconomic incentive and restraint mechanisms have also been corrected, enterprise reform began to emphasize clarity
property rights, improve the governance structure, establish modern enterprise system, financial system also began a profound impact on the “tax system” reform.
Since then, not only has become the enterprise market players their own decisions, and, through the “tax system” of financial reform, the local government also received a great deal of economic management authority – came to be known as China’s economic development and domestic and foreign scholars
initiative a “key” local government economic development and intergovernmental competition on the basis of expanded since then began.

continuous deepening of reform, undoubtedly contributed to the rise in the savings rate and the investment rate in my country from the system level.

First, a direct result of market-oriented reform is investors shift from state-owned economic units to diversify the main body.
Transformation of investors, meaning that market economy mechanism gradually play a role.
This not only greatly stimulated the rise in investment and improve the efficiency of investment, but also greatly stimulated the enthusiasm of saving micro-economic subjects.
We can say, diversity “enterprise” companies and investors, is the support of high savings and high investment, thereby supporting one of the basic system of my country’s industrialization and urbanization factors.

Look further, in-depth market reform, making the working population to enjoy a variety of benefits to gradually reduce and even disappear under the traditional planned economy.
On the demand side, these reforms make the transfer to the market demand will inevitably require residents to save more in advance in order to reserve the ability to pay.
In addition, compared with the employment and welfare institutions, pension integration of the planned economy, market-oriented reforms may also result in the labor force increased uncertainty about the future expectations, which will additionally increase precautionary saving residents.
In the supply side, the market mechanism of supply and change the subject of the plan to gradually replace the mechanism, greatly stimulated investment in the whole society.
Needless to say the surge in investment in manufacturing, housing, pension, health care and education have long been shielded from the government to invest the majority of the list of “people’s livelihood” areas, have begun to attract increasing investment, and then, when the economic and social infrastructure
after the infrastructure into our field of view, China’s long-term investment is entering the high-growth period.

financial “big bang”

and power economic reform in resource allocation to a market-led orientation program agreed by the government, since the reform and opening up began,
“Unity” people’s Bank of China in a financial system will be gradually split into increasingly complex financial system, including central banks, commercial banks, non-bank financial institutions, at the same time, compatible with a large number of other market economy
financial institutions such as credit unions, finance companies and include capital markets, money market funds and a variety of markets, including financial markets have sprung up on the land of China; the allocation of financial resources are increasingly composed of various types
financial institutions, financial markets and decentralized decision-making non-financial sector joint decision.

This is known as domestic and foreign researchers lifting “financial repression” of the reform process, the first hit is the price of money, have long been repressed in the distorted low level of interest rates with in-depth financial reform gradually
improve, and become an important factor to stimulate the Chinese savings rate is rising.
However, the general conclusion is simple textbook different factors that affect saving behavior of Chinese residents is very extensive, including at least: tilt to the distribution of national income residents; As China continues to deepen the degree of monetization of the economy, the currency of the income level of Chinese residents quickly
rise; rapid institutional change and uncertainty enhanced, resulting in precautionary savings will enhance the general population; China has adopted policies to curb consumption credit, resulting in a very low rate of household indebtedness, and so on.

However, the main driver of China’s savings rate is rising, no doubt due to the rapid development of the financial system: financial institutions, financial markets, and constantly enrich financial products and services for the majority of microeconomic entities provide
increasingly broad savings channels.

1978 years, the People’s Bank of China and only Chinese financial institution.
The bank monopolize all the functions of a central bank and commercial banks, at the same time, it is a ministerial administrative organ of the government.

1978 ~ 1984 years and the process of economic diversification and market-oriented operation of economic agents adapt, China’s financial system also began the process of diversification.
Here the most impressive event, People’s Insurance Company of China, China Construction Bank (later renamed China Construction Bank) and the Agricultural Bank of China have been restored and established.

With the loosening of financial controls, various non-bank financial institutions and credit unions also began to develop.
October 1979, China’s first trust and investment companies – China International Trust and Investment Corporation was established.
In 1980, in order to meet the financial needs of urban collective enterprises and the rapid development of the individual, the first urban credit cooperatives listed business in Hebei Province, and soon in the country led to the formation of urban credit cooperatives climax.
Meanwhile, with the rapid development of township enterprises correspond to the number of rural credit cooperatives exist in rural China from 1953 already rapidly growing.
April 1981, China Eastern Leasing Co., Ltd. was established, marking the leasing industry also began to enter China’s financial system.

1985, with the People’s Bank of China began to exercise independent central bank functions, a new undertaking is separated commercial banking functions of state-owned banks – Commercial Bank of China – was proclaimed.
In this way, play a leading role in China’s banking system in state-owned commercial banking system formed the basic framework.

to create a central bank system as an opportunity to further China launched a massive financial institution innovation boom.

In commercial banks, in 1986, China’s first organized in the form of joint-stock commercial banks – Bank of Communications reopened.
In 1987, the first group of companies initiated the establishment of the Bank – CITIC Industrial Bank was established.
Followed, the first regional commercial banks to local financial institutions and enterprises jointly funded – Shenzhen Development Bank is also open for business.
Subsequently, another Minsheng Bank, Hainan Development Bank and dozens of other joint-stock commercial banks as well as Beijing, Shanghai, Shenzhen and other dozens of city commercial banks to become a new member of the Chinese commercial banking system.

With the city’s non-state economic development, urban credit cooperatives in China’s rapidly growing popularity of the city, in the most prosperous period, the total number has reached more than 3,000.
Rural credit cooperatives to adapt to the rapid development of township enterprises has also expanded, while the most prosperous, the total number was as high as more than 40,000.

non-bank financial institutions also grew rapidly.
Trust and investment companies have sprung up.
Enterprise groups based finance company began in 1987, and soon reached the scale of dozens.
Investment funds have also emerged with the development of the securities market.
After 1991, with the rise of the stock market, securities companies in the rapid development of the country, had the most up to nearly 200.

based on the above development, since 1994, according to the phase separation policy business and commercial operations, as well as the principle of banking, trust and securities separate operation and management of the sub-sector, monetary authorities
financial and institutional system of China on a large scale restructuring.
Has long been included in the state-owned commercial banks, policy loans business is separated, handed over to the newly established National Development Bank, Export-Import Bank and the Rural Development Bank, three policy banks; at the same time, state-owned banks on commercial banks
direction began another round of “commercialization” of reform.

money market and capital markets have long been denying people also happen to financial markets from the early 1980s.
1981, in the most economically developed in China, Jiangsu and Zhejiang region, there have been some “underground” to regulate the funds remaining places for the purpose of money lending activities.
January 1986, lending market was officially incorporated into the Chinese financial system.
In 1982, the People’s Bank of promoting the implementation of “three votes a card” (that is, bills of exchange, promissory notes, checks and letters of credit), can be described as the originator of Chinese paper market.
In 1982, China resumed issuance of treasury bonds, the development of the capital market began to launch.
In 1991, the Treasury market infrastructure development has been a considerable extent on the national debt repurchase started a pilot.
More should be written about the major events in the early 1990s, on the basis of the previous pilot national joint-stock companies on the Shanghai and Shenzhen stock exchanges were opened at the end of 1990, marking the stock market officially became China Society
an integral part of the market economy system.

In summary, from 1978 to 1994 just 15 years, China’s financial institutions from the People’s Bank a world exclusive, “explosive” to become a tiller including central banks, (national
and regional) commercial banks, insurance companies, finance companies, urban and rural credit cooperatives, non-bank financial institutions (securities, trust, leasing, funds, etc.), policy banks, including a complete range of modern financial system, stock market,
money market, bond market and so direct financing is becoming a familiar place to invest.
It is this explosion of unprecedented laid a reliable foundation for the system and mechanism to improve the Chinese savings rate.

Statistics show that from the beginning of 1994, my country’s savings and investment rates they both took to the steady improvement of the road.

1978 years ago, as the economic development of the classic argument, China’s fixed asset investment and economic growth has always been “savings gap” (the savings rate is lower than the investment rate) constraints.
The situation at the start of reforms in 1978 to reform the construction of socialist market economic system into the new phase in 1993 16 years, the Chinese savings rate is lower than the investment rate in the rate of investment and savings rates were 8 each year.

After 1994, the situation has radically changed.
Savings rate is higher than the investment rate, China’s economy has become the norm.
This situation reflected in the country, that is, long-term bank deposit growth; performance in the foreign economic relations, it is a long-term, sustained current account surplus, foreign exchange reserves and the resulting growth.

1978 years, my country’s savings rate was 37.9%, in 1994 it rose to 42.6%, and exceeded the investment rate of the year (41.25%).
Since then, my country’s savings rate soared in 2008 will rise to around 51% in 2013 remained at about 50%, although a slight decline in 2016, but remained at about 47%.
Corresponding, our rate of investment (capital formation) increased steadily: in 1978, up from 38.22 percent in 1994 to 41.25% in 2008 to 44% in 2013 to rise further to about 49%, but the past two years,
in many domestic and foreign factors working together, China’s investment rate was slowly decline, but still tied for highest in the world.
On average, 30 years of savings and investment rates reached around 39% and 38%, much higher than in other developing countries and developed historically high growth period over the same period.
It is so high for so long, and mutual support savings and investment rates, and laid a solid economic foundation for our 30 years of average annual GDP growth of nearly 10% of the miracle.

Population: From the “burden” to “bonus”

In the short term, the investment rate and the savings rate is primarily a function of capital and interest rate margins;
in the long term, the investment rate and the savings rate is mainly determined by the level of population structure.

high investment rates and high savings rates of long-term coexistence, leading to the “demographic dividend” appears.
Demographic dividend produced in the age structure of the population: in the decades after the wave of “baby boomers”, the phenomenon usually happens is to increase the proportion of working-age population in the economy, while the proportion of child population (children dependency ratio) and the elderly population
specific gravity (elderly dependency ratio) is relatively decreased.
In this process of change occurred in the structure of the population, if the working-age population has access to employment at the same time, the labor force participation rate of the population increase.
Participation rate rose from at least two aspects of promoting the rise in the savings rate: first, the rise in the proportion of the working population leads to an increase in total revenue of the entire population, which is bound to raise the level of savings; second, the relative increase in the young working population, will
resulting in an overall population decline in the propensity to consume, propensity to save rises, thereby creating additional savings rate increased effect.
Look further, at a high savings rate context, if the investment rate can also be a corresponding increase, the economy will maintain a high growth rate.
This lead to high savings rates by the demographic changes, high investment rates and high rates of economic growth in parallel and support each other in the contact phenomenon is the “demographic dividend.”
However, the need clearly pointed out that demographic change is only one of the necessary conditions to produce demographic dividend, which is a sufficient condition for continuing to provide large-scale employment opportunities, which apparently can only arise from large-scale industrialization and urbanization
process.

Studies have shown that the demographic dividend is a universal role of economic phenomena, but, in different countries and regions, the demographic dividend period occurred one after the other, and its impact on economic development
the extent there are shades of difference.

Since 1949, China’s population growth significantly experienced two waves of baby boomers.
Wave during the 1960s of the last century, the natural population growth rate remained at about 20 ~ 30 ‰ level; another wave in the 1980s after the reform and opening up, the natural population growth rate remained at around 15 ‰ level.
They will know a simple projection: born during the baby boomer population is currently about 60 years between 45-55 years of age, the age of the population is not only a major part of the work force of reform and opening up, and, with the gradual their work
stable and their children grow up, the relative growth and relative decline in consumer income, will be the main cause of these population savers.
Similarly, born during the baby boom of the 1980s the population has now also become a major producer and savers.
There is no doubt that the two waves of baby boomers, especially the baby boomers of the 1960s, a strong impetus to China’s demographic changes, and economic growth here had a tremendous impact.

like others, changes in the age structure of the population in our country has also had a high savings rate, high investment rate and high economic growth rates in parallel “demographic dividend” phenomenon.
An increase in the proportion of working-age population at the same time, the employment rate of working-age population in our country has been maintained at around 98%, which leads to labor force participation rate of the population changes with age structure of the population is incremented.
In 1979, the beginning of reform and opening up, China’s total population participation rate of only 42% by the year 2004, the total force participation rate has reached nearly 58% in 2010 to as high as 74.2%, since then, China force participation rate began to decline
in 2014 fell to 67.0% [1] – though has declined compared with the previous, but still significantly higher than 60.4% in middle-income countries over the same period of 63.6% and Taiwan, China.
Judging from the trend, the total force participation rate and savings rate, investment rate of change is highly consistent.

In recent years, as China’s economy has entered a new normal to the rapid growth of the basic characteristics of the demographic dividend has become one of the hot topics ruling and opposition parties.
Most people say mean, the past few decades China’s economic growth relies on several harvest dividends, which, the most significant demographic dividend also the most durable.
But now, from about 2009, the demographic dividend will die, we urgently need for the future of China’s economic growth plan new support.

The idea of ​​normal and reasonable.
However, we particularly want to point out that, if the death of the demographic dividend only as population problems, which mainly focus on planning for the future and expand the population, it may be a misunderstanding.
Merely drew attention to the fact enough: now everyone is distraught as total population growth and participation rates necessary conditions arising from demographic dividend rise, before the reform and opening up, and after a period of reform and opening up, but everyone must
want to get rid of the burden.
At that time, addressed the population, from domestic to foreign countries, from theory to policy, unanimously agree that it is China’s development of “cancer”, “dead load.”
Because too many people have, and the younger population structure height, Chinese they can not solve their employment problems and eating problems, so it is necessary to control the population, and finally to produce the now “family planning” policies controversial.
If the in-depth discussions on this issue, before the reform and opening up as well as the famous Yinchu Distinction worth remembering.
When he was president of Peking University, Professor Ma Yin-chu insisted that people are “mouth.”
Given little less food, people and more reality, he advocated family planning and population control.
Opponents insisted that people are “hand”, “Many hands make light”, so do not mind the population growth.
In a period of time and after, the Ma Yin-chu is clearly right.
Opponents, while still insisting on oral Yinchu of “horse” is the Malthusian “horse” rather than Marx’s “Ma” giving criticism, but in practice had the Cultural Revolution in the late 20 million “educated youth” even some
decentralization of urban youth to rural areas to ease the plight of the city’s employment.
However, it must be admitted that, since the reform and opening up, we are obviously under the concept of “demographic dividend”, enjoying the traditional system left many of our young population.

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