Xiao Geng: Bank Savings And Loan Interest Is Too Low Is The Biggest Unfair Social Distribution.

Reforming the wage system of state-owned enterprises, especially monopoly industries, has recently been regarded as an important way for the government to achieve the goal of adjusting the income distribution policy.

PetroChina has even surpassed Exxon Corporation and Microsoft Corp for the first time in the world, making it the largest market capitalization company in the world.

Public opinion generally believes that this is actually the result of administrative monopoly.

At present, the competition in the competitive industry is becoming more and more intense. The monopoly power of the monopolistic industry is getting bigger and bigger. People can hardly see the possibility of narrowing the income gap between industries.

Through this phenomenon, we can see that the root of the problem is the negative impact of administrative monopoly on national economic and social life.

Professor Xiao Geng, director of the Brookings public policy research center of Tsinghua University, interviewed by the China Times reporter in June 3rd, said that only reforming the wage system of monopoly industries can hardly change unfair distribution.

The main reason for the serious economic imbalance is:

Monopoly industries are too profitable.

Q: how do you see the negative effects of administrative monopoly on the social, political and economic fields of the country?

A: the status quo of the monopoly industry in the mainland has its deep historical background.

In the course of the reform, the state-owned enterprises that had to reform because of losses were caught in the hands of the most profitable enterprises. Finally, it was discovered that the most profitable enterprises are monopolistic monopolies.

On the one hand, it has played a great role in the construction of China's infrastructure. On the other hand, when these facilities are built, they need to rely on private enterprises to make money more efficiently.

Therefore, in this sense, state-owned enterprises have made great contributions.

But at present, a very bad consequence is that because of monopoly, supervision is needed, but at some level, it is too dead, so that it lacks enough vitality to compete with the private enterprises in the domestic market.

The special status of state-owned enterprises also makes it impossible for them to fully participate in the competition in the overseas market.

The monopoly state owned enterprises will gain a lot of money after they make money in the domestic A share market, but they are basically not paying dividends.

And most of its huge operating profits have not been invested.

These state-owned incomes or wealth have not basically become purchasing power.

As a result, we can often see that monopoly state-owned enterprises use large amounts of money to buy land.

Those land kings and excess capacity often cause serious imbalance in the national economic structure.

The most important problem is that the income of senior executives of state-owned enterprises is considered to be high, which is increasingly causing public dissatisfaction.

But according to market standards, the income of top executives of state-owned enterprises in China is not high, and some are even very low.

Individual industries, such as the financial sector, or those with relatively successful management, are likely to have relatively high executive income.

But why do ordinary people feel unhappy about the high income of state owned executives? This is because monopoly state-owned enterprises get monopoly profits.

The most unfair distribution of social wealth is:

Bank deposit and loan interest is too low.

Q: industry monopoly has indeed been considered as an important reason for the widening income gap. The institutional adjustment of breaking the income distribution is obviously required to operate monopoly industries. How do you think we should proceed?

A: I think we can see that monopoly income is very high, but this is the surface.

Compared with foreign companies, it is not high.

The real difference is that the Chinese monopoly industries can borrow large amounts of low interest loans from banks.

I think China's Bank loan interest is too low, so China's investment return rate is very high, especially in the monopoly industry, the rate of return on investment is very high.

A recent study by me found that China's investment return rate in the past thirty years was 20%, while the US investment return rate was about 5%.

Why is bank lending cheap in China? Because the interest on bank deposits in China is too low.

The monopoly of state-owned enterprises to expand the huge profits is at the expense of the vast majority of people's bank deposit profits.

This is unfair.

When people put money in the bank, they saw that prices rose very fast.

Large state-owned enterprises can easily borrow a lot of money from state-owned banks and earn a lot of profits.

The rich can often borrow money from banks for real profits at very low interest rates.

These are the most unfair phenomena in the distribution of social wealth.

From this point of view, if we want to adjust the distribution of income and reform the wage system of monopoly industries only, it is useless to limit the wage growth of monopoly industries.

Because in the monopoly industry, any expenditure, such as going abroad for business study and welfare tour, can cost a lot of money.

The fundamental problem lies in the fact that monopoly state-owned enterprises can not be allowed to operate and expand loans from banks at low cost, and gradually reduce the monopoly rights of monopoly industries.

If the interest rate of bank deposits and loans is raised, the property income of ordinary people will increase, and loans for SMEs will also be easily obtained from banks.

Therefore, I think it is not the most important thing to adjust income distribution only to pay attention to monopoly industry wages.

Restricting senior executives' annual salary is a wrong direction.

Q: do you think it doesn't make sense to restrict senior executives' annual salary?

Answer: there may be some differences in the annual salary of senior executives.

Because state-owned enterprises also need good leaders to control them. If wages are low, only those who want to be officials will be willing to work.

If we want to run state-owned enterprises as a successful large enterprise, wages must be matched with the market.

Otherwise, how can we find the best people to manage and manage?

From the perspective of the development of large state-owned enterprises, their executive salaries should be marketization.

But there is a premise that the operation mechanism should also be marketed.

If the government is still too dead, it can not be marketed.

So wages should not be a problem. Wages only account for a small part of corporate income.

Therefore, restricting the annual salary of senior executives is a wrong direction.

Q: what do you think is the most fundamental and important way to narrow the difference between monopoly industry income and other industries?

A: if our goal is to turn an enterprise into a competitive enterprise, the wages of its senior executives should be matched with the industry standards instead of the planned economy wage system.

Q: Recently, the central high level is very concerned about the issue of income distribution adjustment. As a famous scholar of public policy, do you and your team have the latest research results on related issues?

A: we have been paying close attention to the related issues. There is no special research results yet. However, we mainly observe and evaluate the problems from the macro structure. The most important thing is to find a solution to the problem and to stimulate the vitality of state-owned enterprises in the process of solving problems.