(Excerpted from China's Renaissance and the Future of the World, page 665-67 1, Sichuan People's Publishing House, 1996) Looking forward to the economic trend in the 1990s-He Xin answers the reporter of China Industry and Commerce magazine: Please talk about your views on the potential problems in the world economy and China's economic development in the 1990s. Ho: From the perspective of the world economy, many problems need in-depth study and objective judgment. This is necessary for the developing economy of China. Generally speaking, the world economic situation in1960s was much more severe than that in1980s. The relationship between China's economic development and the international environment in the 1990s is closer than that in the 1980s. In my opinion, in recent years, domestic economists are too optimistic about the international economic situation. Reporter: We have noticed that you mentioned in a conversation last year that "the world economy is in deep crisis" and that "the conditions for a global economic crisis are becoming more and more mature". On what basis did you make this judgment? He Xin: From the end of 1990, the world economy entered a recession and is still at a low ebb. It seems that my prediction is correct. I made this judgment according to some remarkable situations in the development of the world economy. First, since the 1980s, there has been a surplus of primary products in the international market, and prices have been falling, with an average annual decline of about 4%, reaching 27% from 65438 to 0986. One of the backgrounds of the Gulf War is the overproduction of international oil and the drop in oil prices. Because developing countries regard primary products as the main source of foreign exchange, this situation has seriously worsened the economic situation of developing countries. The downward trend of primary product prices may continue in the next 10 year. Second, the developed countries' competition for the export of industrial products is becoming increasingly fierce. The protectionist tendency between them is very serious and the measures are getting stricter and stricter. This reflects the sales strategy of too many similar products, trying to squeeze low-priced products out of their own markets. Third, the trade protection of developed countries is actually to curb the economic growth of developing countries. Trade and technical exchanges between developed countries are often high-level, with strong complementarity and interoperability. Anyone who wants to restrict each other will also bring great losses to himself. Therefore, all kinds of direct or indirect protectionist policies adopted by developed countries are actually aimed at developing countries, and developing countries have no resistance. Fourth, under the above background, some developed countries organized and started group trade, trying to carve up the world market. Fifth, under the economic blockade and competition of developed countries, the national industries of most underdeveloped countries are generally stagnant, and even face the danger of bankruptcy, bankruptcy and elimination. At present, China is blindly optimistic about the international economic situation. Influenced by the theories of toffler and naisbitt, some people think that the current world economy is good, but only the economic situation in China is not good. That was not the case. Most underdeveloped countries (including the economies of Eastern European countries) are facing serious debt crisis and international balance of payments imbalance, and many countries are actually struggling economies. According to the annual report of UNICEF 1989, the living standard in Latin America has now returned to 20 years ago, and one third of the population (about1300,000) lives in extreme poverty. In five southern African countries, 27 million people are on the verge of hunger. These countries were food exporters before 1982. Most parts of the world, including some countries in South Asia, South America and Southern Africa, have experienced negative economic growth in the past 10 years. The population of these areas accounts for about two-thirds of the world population. Sixth, emerging countries and regions in Asia will have a hard time in the future. Taiwan Province provincial authorities have an estimate of their own economy. If the economic growth rate of 5% to 8% is maintained every year, the industry will reach 1 trillion dollars by the end of this century. I don't think this growth rate can be achieved in the next 10 year. The economy of Taiwan Province Province is an export-oriented economy that relies heavily on exports. The main export destination is the United States. However, it is very surprising that the balance of payments deficit in the United States is serious and the deficit is converted into debt. There are two main reasons for the US trade deficit: Japan, Chinese mainland and Taiwan Province Province. If the United States wants to restore the balance of foreign trade, it must do everything possible to curb imports from these aspects. The export of Taiwan Province Province is facing a very difficult situation. In the case of export difficulties, the international surplus funds will be very tight in the next 10 year. The situation that hot money flooded the international financial market in the 1980s no longer exists. Among the "Four Little Dragons", Taiwan Province Province is in debt, and South Korea's debt is even higher, reaching tens of billions of dollars. This means that South Korea will use a considerable part of its export income to repay the principal and interest. When a Japanese economist predicted the economic development of the "four little dragons" in Asia in 1990s, he thought that the shadow of debt had enveloped Taiwan Province Province, South Korea and other emerging Asian regions. Seventh, there has been a large-scale capital return in the world economy. According to our imagination, rich countries should invest in poor countries, and money will flow to poor countries. In fact, a lot of money is flowing from poor countries to rich countries in the form of interest and profit. Since 1980s, the amount of this capital return has increased year by year. According to my estimation, in the 1980s, about $30-50 billion flowed from developing countries to developed countries and from poor south to rich north every year. According to the statistics of the United Nations, the seven developing countries with the heaviest debts 17 have to pay the principal and interest of13 billion dollars to Japan, the United States and Europe every year. Several countries in Latin America paid interest of 180 to 1987, which means that they have to pay 4-5% GNP to the United States every year. This is a clear example of the transfer of huge amounts of money from developing countries to developed countries. Under such circumstances, it is hard for us to imagine that developing countries are still rich. For another example, China's current purchase of a Boeing 747 from the United States is $654.38+300 million. We sell a pure wool suit to the international market at the price of 100 USD. This means that it takes 6.5438+0.3 million suits to change a plane. If the two sides of the exchange are converted into labor, the disparity is amazing. This shows that developed countries can obtain excess profits by grabbing the added value of high-tech products, and it is too high, which is actually a very unequal international exchange. Eighth, the adjustment of industrial structure in eastern Europe in recent years can be called early bankruptcy if viewed from the background of unified competition in the world economy, or it can be said that under the background of industrial crisis in the current world economy, some inefficient and low-tech industries went bankrupt first, and then were eliminated by international capital and selectively merged and unified into the world economy. This is also part of the current global economic restructuring. Ninth, the world capital market in the 1990s was not as rich as that in the 1980s. In the early 1980s, there was a huge capital flow in the world capital market, and oil-producing countries made huge oil profits. They deposit these petrodollars in banks in developed countries and become interest-bearing capital for borrowing from developing countries. Now this part of the funds has become industrial capitalization. New sources of funds did not appear. Iran, Iraq, Kuwait and Saudi Arabia are all poor, and the United States does not have much hot money. On the contrary, it has serious debts. Now, one country that can provide funds is Germany and the other is Japan. However, Germany occupied a lot of funds due to the reunification of Germany and Japan, and Japanese funds were repatriated last year. In other words, the source of funds is much narrower than that in the 1980s. Tenth, I personally observed that at the end of the 20th century, one of the world economic trends was the internationalization of the national economy. The reform in China, the reform in the Soviet Union and the economic and political changes in Eastern European countries are all related to the internationalization of national economy. So, in the next 10 year, it's hard to find anything. In this case, I think we should make corresponding adjustments in the face of the new world economic situation; Otherwise, China's national economy may also be involved in the process of economic bankruptcy of developing countries. We don't want to see this. Reporter: The 1990s were a crucial period for China's socialist modernization. In this 10 year, we should achieve the second-step strategic goal and lay a good foundation for future development. At this new starting point, what do you think of the current domestic economic situation? He Xin: Our economic situation has greatly improved compared with the hyperinflation of 1988. Our economy can be divided into two levels. One is the people's livelihood economy, which is the daily life of ordinary people; The other part is basic industry and national economy. From the perspective of people's livelihood economy, the situation has been quite good in the past two years, relying on the sustained bumper harvest of agriculture and the state's emphasis on agriculture. The richness of light industrial products is envied by the Soviet Union and eastern European countries, which is the good side of the situation. But from the perspective of national economy, it is quite severe. In his report, the Prime Minister pointed out three problems: first, the country's financial situation is grim; Second, large and medium-sized enterprises are trapped; Third, the economic cycle is not smooth. In fact, although the national economy and the people's livelihood economy are two levels, one is the foundation and the other is the surface, and the two are very closely related. Damage to the national economy, in the long run, will eventually affect the people's livelihood economy and people's daily life. This is my general view of the current situation. Reporter: At present, China's economic development has encountered one of the most intractable problems, that is, low economic benefits. If this problem is not solved, it will be difficult to idealize economic development. Hu: What is the essence of the so-called economic benefit problem? Is the ratio of input to output. Our current ratio is sometimes negative because there is excessive distribution in the national economy. Some enterprises use various methods to increase various unproductive expenditures, wages and benefits, and the growth rate greatly exceeds the output value and labor productivity. You know, China's labor productivity is lower than that of developed countries. At the same output level, our energy consumption, material consumption and manpower consumption are quite high; In addition, wages and bonuses are out of control and the distribution structure is unreasonable, which leads to low enterprise efficiency. The production cost of enterprises rises, and the price rises. As a result, the state straightened out the price and carried out price reform. Soon, the wages and bonuses that have been rising rapidly surpassed them, and both of them are competing to rise. In this case, it is hard to imagine that it can really solve the problem of low economic benefits. I think this problem is caused by mistakes in economic reform. Now the state must completely change this situation through taxation, credit and administrative means. Reporter: Since the reform and opening up, all regions and industries have made great progress, which is beyond doubt. However, we also see the imbalance of regional and industry development. What do you think of this problem? He Xin: We should realize that there is a north-south difference in China's economy. Some economically developed areas in the south and traditional industrialized areas in the north, as well as areas providing primary agricultural products, have experienced obvious economic disparities. In recent years, the status of Shanghai and Tianjin in China's economy is declining, which is closely related to the rise of "foreign-funded" enterprises providing light industrial products in the southeast coast. This rise and fall are synchronous. Reporter: What is the potential problem of this North-South difference? Mr. Hu: I think we should be alert to the erosion of China's national industries by transnational capital. China's large and medium-sized state-owned enterprises are mainly concentrated in the western and northeastern regions, mainly composed of machinery, mining, aviation industry and military industry. At present, they are facing serious losses and finished product accumulation. I want to point out that the large and medium-sized state-owned enterprises in China are actually the foundation of China's national industry. Of course, there are many reasons why these enterprises are trapped, including backward technology and equipment, slow equipment update and lax internal management. And structural problems. But at the same time, there is a problem that must be guarded, that is, most light and small processing enterprises in the south rely on foreign technology and capital to compete with domestic state-owned enterprises for market, manpower, energy and raw materials. This brings a potential problem: China's national industries are gradually eroded by foreign capital, which must be paid attention to! Reporter: Since the reform and opening up, we have introduced a lot of foreign capital and technology. How should we consider this in guiding ideology? He Xin: In the past few years, there have been some problems in the structure of introducing foreign capital, mainly concentrated in labor-intensive and low-tech industries. In fact, in these industries, China's technology is not far behind them, such as shoes, hats, clothes and even cigarettes. However, high-tech industries that are fundamental and decisive to the revitalization of China's national industries are very scarce. This kind of introduction can actually be said to be low-level. As a result, in a sense, we became a base for others to dump surplus technology and equipment, and gave our market to others at a low price. On the other hand, when we introduced technology, we also neglected and made mistakes in selection and identification. For example, we have introduced many color TV assembly technologies, but as the core of this technology, the introduction of integrated circuit manufacturing technology has not been successful. I think there is a problem that needs to be studied. Only imports and investments? I think there is a problem with development strategy, which should be limited. Because some things are beneficial in the immediate future, but will they be beneficial in the long run? My personal opinion is that at least the following points should be considered when introducing foreign capital: 1. Will it harm the employment opportunities of domestic counterparts? 2. Does it cause the loss of scarce domestic resources? 3. Is it helpful to introduce new technology? If we don't think about these problems, there may be some benefits at present. But in the long run, there will be endless troubles!