中国供给侧改革的背景、理论模型和实现路径（上）

（Source:International Journal of Economics, Finance and Management ，Title: China’s Supply-side Reform: Background, Theoretical Models and Implementation Paths）

Abstract: Everything is changing. Drastic changes also take place in the international situation. This paper elaborates that human being is currently in the downward phase of the fifth long-term cycle after the industrial revolution, which is the global political and economic background of China's supply-side reform. Seen from the supply-side, the author thinks that the main driving force for economic growth is the combination of labor, capital, land and natural resources, technological innovation, and system and also their comprehensive efficiency therefrom. From the viewpoints of these five major factors and their motion rule, the paper establishes a theoretical model for these factors and their motion rule in the supply-side structural reform and then clarifies the position of the government and the enterprise clearly. Further, based on long-term view and the theoretical model, the paper put forward that the main driving force to promote economic and social development and upgrading under the background of China's supply-side structural reform is to release the potential of supply-side factors, to foster the "new economy" with new technological revolution as the core and to optimize the overall economic structure in China. The paper also suggests that China's supply-side structural reform shall be based on the current situation, take a long-term view and implement the "three step" strategy.

Key words: New Supply, Structural Reform, Long-Term Cycle, Factor Motion, New Economy

1. Introduction

In previous studies on new supply-side economics, it is emphasized that the essentials of supply-side structural reform is striving to overcome difficulties, that is, solving the problem of effective institutional supply through deepening the reform so as to further liberate the productive forces and support the times choice in the process of China's modernization. The authors have been striving to establish a logical and systematic cognitive framework of new supply-side economics from the perspective of combining theory and practice closely. The purpose of this paper is to further explain the grand historical background of China's supply-side structural reform, establish the theoretical model for the structural reform based on the factors and their motion rule, then define clearly the position of the government and the enterprise in the supply system and the supply-side reform, and finally put forward the implementation path and direction of the supply-side structural reform in China.

2. Long-Term Cycle: Background for China to Promote Supply-Side Structural Reform

There are many indications that the long-term cycle is evolving at roughly its own pace. In the history of economics, the Russian economist and statistician Nikolai D. Kondratieff made use of the time-series statistics of prices, interest rates, imports, exports, coal and cast iron production, etc. in main industrialized countries such as the United Kingdom, France, the United States and Germany, etc. in The Long Waves in Economic Life written in 1925. He concluded that there was a long-term wave of approximately fifty to sixty years in economic development. For the first twenty years, the economy would experience a prosperous period. After that, the economy would experience a recession period of about ten years, then a depression period of about ten years, and finally a recovery period of about ten years. He studied the circumstances in 140 years from 1780 to 1920, during which the capitalist economy had experienced two-and-a-half long-term cycles. This is the well-known "The Kondratieff Cycle", namely the productivity cycle theory.

Joseph Alois Schumpeter and many other economists also believe that there are indeed four stages of "prosperity","recession", "depression" and "recovery" in the capitalist economy and the four stages circulate. However, Schumpeter focused on technological innovation, which, in his opinion, was the main factor to promote cyclical changes in the economy. In his opinion, to a great extent, the cycle of economic growth was equal to the cycle of the technological revolution. Based on this, he divided the period of capitalist economic development into three long-term cycles. First, from the 1880s to 1840, the innovation in the textile industry played an important role. Second, from 1840 to 1897, it was mainly the innovation in the steam and steel industry. Third, from 1897 to the 1950s, it was led by the innovation in the electrical, chemical and automotive industries. Seen from this point, it can be concluded that from the 1950s to the 1990s, the economy experienced an era of electronic information initiated by the innovation in semiconductor technology, which was also about fifty years. Since then until now, the wave of technological revolution has been advancing all the way to the era of Internet, mobile Internet and artificial intelligence. Major technological advances such as big data and cloud computing, etc. are leading a new wave of innovation in the world in the theme of "peace and development" during the process of informatization and globalization. The "digital economy" has emerged rapidly and the "share economy" is just under development.

Just as the "punkeek" in the evolution of biology, technological advancements, especially when the new replaces the old, are often accompanied by some kind of stagnation and recession. The world financial crisis that took place in 2008 interrupted the flourishing globalization process. Since then, nine years have passed. Yet the entire world is still in a period of economic pain after the crisis and high uncertainty. Its main performances are as follows: the U.S. economy recovers moderately but not stably; the European economy continues to decline; the European Union's perspective is still uncertain after the British existed from the EU; the right-wing forces in many countries have risen; Japan has been in stagnation with almost zero growth for long periods; emerging economies and the developing countries also face many difficulties. In order to stimulate the economy, the central banks of several countries such as the EU, Japan, etc. have started the era of "negative interest rates".Meanwhile, as for the international relationship, the trend of nationalism, trade protectionism and the de-globalization have risen obviously. To a large extent, the astounding dramatic changes are taking place in the world today. According to the specific performances of this long-term cycle, the chart of the fourth long-term cycle as well as that of the first half of the fifth long-term cycle is figured out based on the cycle theory of Schumpeter, which are shown in Table 1. To put it plainly, the world economy is currently in the recession period of the fifth long-term cycle.

The major lessons we have learned from the long-cycle theory is that in the past two hundred years, the economic growth and prosperity mainly originated from the industrial revolution brought by major technological breakthroughs that changed the history of the world and the consequent "leap" of the economic structure. Vice versa, economic recession and depression are mainly caused by the declination of technological bonuses, that is, the aging industrial and economic structure resulted from the depleted "low hanging fruits" on the big tree of new technology. However, throughout the history, the invention and innovation spirits of human being will never stop. In time, the new technological revolution will inevitably come, and the economy will return to growth and prosperity. Thus human being will also enter the next period of rapid development.

The long-cycle theory is useful for determining the historical position of the supply-side structural reform in China. It clearly shows that the recovery of the world economy need to take some time after the financial crisis in 2008, and the world may still need to wait for more than one decade. Accordingly, China's economy, which has entered a 'new normal', will also need a relatively long period of time before embracing the next prosperity and rapid growth. It also clearly shows that without major breakthroughs at the technological level, the world economy can never walk out of the recession and downturn. It is inevitable to develop the new economy. The long-cycle theory also indicates that at each stage of the transformation, the old and new structural contradictions often occur. This is almost as same as the reality in China. In recent years, China has entered a period of hazard with "accumulated contradictions" and "overlapped potentials" while there still exists the features of "golden development period". In view to the reality in China, "the fifth cycle", revealed by the long-cycle theory, almost overlapped with "the third step" (2000-2050) proposed by Deng Xiaoping in China's "three-step" modernization strategy, and also coincided exactly with the time of overcoming "middle income trap" and realizing the "Chinese dream", namely realizing the rejuvenation of the Chinese nation. Therefore, thoroughly understanding this background will not only help to deepen the understanding of the historical and times background for promoting supply-side structural reform, but also further clarify theoretically the extremely importance of new technology and new economy for China's economic transformation and upgrading. Thus, we can deeply realize and logically interpret the direction and implementation path of China's supply-side structural reform, which is of great significance.

3. Theoretical Models for Supply-Side Structural Reform: Factors and Their Motion Rule

3.1. The Decisive Factor Influencing the Long-Term Economic Growth Is Five Major Factors on the Supply Side

According to the existing achievements in economic growth theory and new supply economics, we confirmed the primary dynamic significance of the demand, defined the responsive system of the supply to demand as the key dynamic contributions to the step development of the productivity, and then abstracted the factors of economic growth into five aspects: labor, land and natural resources, capital, technological innovation and system (including the management) from the supply side. In general terms, these five factors form an integral part and have their own contributions to economic growth. However, their relative contributions are different at different stages of economic development. The combination of different factors has a great influence on or even determines the economic growth situation and its overall performance. Thus, it is necessary to adapt to the transition of different stages of economic growth, innovate the combination of five factors, and adapt to the law to innovate and develop.

The five factors form a set of functions for economic growth. Its theoretical model is shown as the following formula (1):

Among them, G represents economic growth, L represents labor, R represents land and natural resources, C represents capital, T represents technological innovation, and I represents system and management. The factors in the sense of economics refer to the main inputs that all the economic entities will involve in their production and business activities. However, at different stages of development and at different times, the effect and influence of each factor are different. In general, labor, land and capital are the most obvious and main factors at the early stage of economic growth. When the economy enters the middle-income stage, technological innovation and the system will generally show great potential, and hedge the degradation of the other three factors or even become the main contributors to total factor productivity (TFP) . Looking ahead, from the point of view of technological change, an emerging factor - "data" or "information" may be considered to be added to the five factors. The above five factors can be divided into two levels. First, the liquid and more competitive factors, mainly including labor, land and natural resources (right of use, right of development), capital and technological innovation. Second, non-liquid and non-competitive factor, mainly referring to the institution. The institutional arrangements and the resulting institutional environment are also changing all the time. But they are generally slow variables, belonging to the category of production relationship that are determined by the development of productive forces. They will change and evolve under the comprehensive effects of inducement and pressure. In the end, formal or informal institutional supply system under specific historical conditions will be formed. In short, institutional supply is a relatively lagging, relatively steady but also significantly initiative response to the existing institutional needs in the economic and social life, which provides the environment and conditions that are favorable or unfavorable for the liquidity and reorganization of the competitive factors, thus resulting in the production relationship and social forms favorable or unfavorable to the "liberation of productive forces".

3.2 .The Factors Are Always in the Process of Cycling and Succeeding

In view of the "hypothesis of economic man", the process of human economic activity is an infinitely cycling process of the interaction between supply and demand that satisfies human interests, that is, the process of social reproduction. On the supply side, various competitive factors such as labor, land and natural resources, capital and technological innovation, etc. are always in constant motion so as to maximize the efficiency, which is reflected in market share and returns through maximizing "user experience" after a series of competition. In short, efficiency and returns are the direct driving forces that guide the flow of factors. The social inspection mechanism driven by returns shall improve the user experience, which is the most fundamental supporting force. Further, the basic mechanism that facilitates the flow of factors is the formation process of social average rate of profit in competition. To be specific, the industries or sectors whose return is lower than social average rate of profit will have factor outflows. The lower the rate of return, the larger the driving force of factor outflow. For the industries or sectors whose return is equal to social average rate of profit, the factors will keep a relatively steady state. The industries or sectors whose return is larger than social average rate of profit will have factor inflows. The quantity and speed of the factor inflow is directly proportional to the difference between this industry's actual rate of profit and social average rate of profit. As far as an industry is concerned, with the outflow or inflow of the factors, the returns will gradually converge to and at last equal the social average rate of profit. At this time, the motion of the factors will keep a relatively steady state in this industry. It is shown in formula (2) as follows.

Among them, Ki is the resource inflows in I industry, Pi is the rate of profit in i industry, Pa is social average rate of profit, P = PiPa, Vi is the resource inflows in unit time in i industry, ti is the resource inflow time in i industry.

3.2.1. Release Outwards

Due to the profit-driven characteristics of the capital, its accompanying competitive factors will always seek to maximize the benefits under given conditions. The fields that cannot reach the social average rate of profit will have factor outflows. The more convenient and smooth the outflow of the factors, the more conducive it is to the exploration of the potentials in social productivity and to the improvement of the overall performance of economic operation.

3.2.2. Inward Attraction

The factors that are released from inefficient fields are oriented towards the fields with higher returns. The more profitable the sectors or fields, the more attractive they are to the agglomeration of the factors. When this type of adsorption mechanism works, it is essential that whether or not the factors can flow and how easily they can flow freely.

3.2.3. Reorganization

The flow of different factors forms a reorganization process. Once the factors find a chance to obtain more profits, they will gather together as that the scrap-iron will be absorbed by the magnet, and then they will produce a series of “chemical reactions”, combine organically through the interaction, gradually form a specific structural feature, and finally be embodied as certain industrial structure and economic structure. On the whole, the factors are always reorganized either tightly or loosely, or quickly or slowly, and the resulting economic structure also evolves dynamically in a constant process. The more convenient and flexible the release and attraction mechanism, the more efficient and high quality of the reorganization of the factors, and the more efficient of the relevant structural state. This relationship and process is shown as follows in Figure 1.

Of course, it should be pointed out that the above succeeding movement processes of the factors are mainly a theoretical abstraction. For a specific time and place, the factors will always be in three states at the same time. Due to the heterogeneity of the entire system in economic development and also the imbalance, abruptness and discontinuity of “destructive innovation” in different fields, there are always some fields with high profit rates and others with low profit rates. There are always some people who can find and grasp more and better profit opportunities while others cannot. So the competitive factors will always be in a process of unceasing movement. It is this internal driving mechanism that seeks higher returns and profits, forms the driving force for economic growth through the responsive mechanism of supply to the demand. Therefore, the process of economic growth is a process in which the factors continuously seek higher returns. Vice versa, to realize the economic growth, it is necessary to create more free and flexible conditions for the factors to seek maximum returns in the flow and provide more abundant opportunities .

What is the decisive condition that whether the release and attraction mechanism of the factors is flexible and convenient or not, or whether the process of factor reorganization and dynamic structural optimization is smooth or not. This is determined by the non-liquid and non-competitive factors in supply side–institutional supply. As mentioned above, the institutional arrangements and "institutional environment" are also changing. However, they are slow variables and fall in the category of production relationship, which is determined by the development of productive forces. They are driven by various factors during economic and social development. Finally, formal and informal institutional supply is formed through gradual natural evolution and active design. However, once the system is formed, it will be in a relatively steady state for a long period of time, affecting and shaping the incentive mechanism and behavior of all the subjects in a society. For transition economy such as China, the great institutional change from planned economy to market economy and the continuous development and improvement of the socialist market economic system are the most fundamental determinants of China's modernization strategy.

4. Correctly Understanding the Positioning of the Government and the Enterprise in Supply-Side Structural Reform

The main battlefield for the structural reform on the supply side is the construction of factor markets. Based on the theory of factor motion expressed in the above-mentioned theoretical model, a question highly concerned by all parties can be clearly answered: In the supply-side structural reform, how should the government and the market players (the enterprise) be positioned? In the allocation of resources realized through the flow and interaction of the factors, how to divide and cooperate?

Implemented on various entities related to economic growth, the five factors can be further subdivided into the following three levels:

4.1. Micro Level

The main factors involved in the production and business activities of the manufacturer or the company are labor, land and natural resources, and capital, which can be referred to as "people", "land" and "money." Different entrepreneurs use their unique vision and talents to combine these three factors into specific production or service supply capabilities. In an economy, most companies play their role as market players at this level.

4.2. The Combination of Micro-Level and Macro-Level

In addition to the above three factors, large corporations, multinational companies and industry leading companies, etc. will also pay special attention to the "scientific and technological innovation" when they engage in production and business activities. For large companies, on one hand, the ability of scientific and technological innovation determines their core competitiveness and the ability to survive and develop in long term. It determines that whether the large companies can maintain their leading position in the industry and obtain excess profits. On the other hand, due to the huge uncertainty and enormous costs of the technological innovation, generally, only large companies have the ability to make long-term huge investments. In addition, during the mid to late stages of industrialization, a large number of SMEs seeking innovative development in strategic emerging industries have got the support of venture capital and angel investment funds that are in line with the "new economy", taken technological innovation as key development supporting conditions and growth breakthrough, striven to from their own core competitiveness and successfully led a new trend with "Silicon Valley experience". Going further, no matter large corporations or small and medium-sized technology-based enterprises, they can combine their own scientific and technological innovation activities with the government's industrial policies, technical policies, fiscal and taxation policies, etc. provided at meso and macro level, and seek the huge multiplier effects resulted from the integration of the "first productivity"–science and technology and the economic society. In addition, the top-level land development plans that are developed and implemented by local governments and the Central Government at meso-level and macro-level have also become closely related to the combination of factors that the companies have independently selected at the micro level, and even become preconditions. People have profoundly realized from the history of world industrial development that technological innovation and the achievements of major technological breakthroughs are undoubtedly direct dynamic sources and main supporting forces for "step-wise" economic development. The government must pay attention to supporting basic education and basic science and technology, cultivate innovation and innovative capabilities. Meanwhile, the government should actively make use of industrial policies, technical and economic policies, and fiscal and taxation policies to promote the technological innovation.

4.3. The Macro Level

This level is mainly regulated by the government and corresponds to the supply of institutional factors, which are slow variables. Institutional economics has fully proved that the institution is of extreme importance in promoting the growth and prosperity of a country's economy. The government is the only, monopolistic and formal institutional supplier in society (and it is also a powerful influence and leader of the informal system). ). All other subjects-businesses, families, individuals, etc. - are acting under the "ceiling" of the institutional rules maintained by the government with public power. For example, the top-level land development plan determined by the government is the comprehensive premise for all market players to carry out various combinations of factors. Besides, the spatial allocation of real estates and mesh systems related to "natural monopolies" shall also be included in the provision of government-based planning. Further, the government must comprehensively design and operate the institutional system related to income redistribution, such as taxation, benefits, pension and relief, etc. in order to properly balance and handle the contradictory relationship between "fairness (equalization)" and "efficiency" that has been existed in economic life. In short, the effective institutional supply oriented by the government is of unparalleled importance to economic growth. Studies have shown that no matter the birthplace of the industrial revolution - the United Kingdom, the leading country with highly developed market economy - the United States, or the "Four Asian Tigers" that emerged in the second half of the last century, and China that developed rapidly in the course of reform and opening up, have provided excellent cases of "institutional changes promoting the economic growth". The widespread poverty and wars seen in sub-Saharan and Middle East countries are inextricably linked to their lack of a strong and powerful government and effective institutional supply. Of course, it should be realized that the inherent "strong" and "promising" role of the government must be properly matched with its "limited" functions and scope of action. The effective institutional supply oriented by the government should be "inclusive". Thus, it can fit in with the dominant trend of the development of human civilization and adapt to the objective needs of the micro-subjects to play potential and vigor in the flow of factors.

Therefore, according to the above understanding, grasping the internal logic of supply-side structural reform and understanding the respective functions and roles of the government and the business in this framework can be summed up in four points:

First, in the supply-side structural reform, the space for the enterprise (led by entrepreneurs) is to actively improve the combination of the factors, which include labor, land and natural resources, capital and technological innovation, improve the quality and benefits of their goods or services, and form and improve their core competitiveness in the survival of the fittest.

Second, in the supply-side structural reform, the space for the government (led by decision-making officials) is mainly reform, that is, improving the institutional supply and promoting institutional innovation. Especially, in the"self-revolution of production relations", the government shall overcome the difficulties, change those economic and social management rules, methods, and mechanisms that do not meet the requirements for the development of productive forces and create favorable inclusive environment and conditions with "high standards and rule of law" for the enterprise to engage in production and business activities, thus releasing all the potential and vitality for economic and social development.

Third, in advancing the supply-side structural reform, the government cannot and should not go down to the corporate level, go down to the specific organizational level of the factors, or intervene excessively in specific matters such as industrial restructuring and corporate restructuring. Special attention should be paid to using or carefully using administrative means to organize the implementation of the so-called "standards" as less as possible, and should seek to provide and implement relevant systems that can effectively guide the behaviors of market players.

Fourth, in advancing the supply-side structural reform, the government and the enterprise should identify the fields for cooperation and optimize cooperation mechanisms. The fields of cooperation between the government and the enterprise are mainly in technological innovation. Both the large and small-and medium-sized enterprises can make use of the industrial policies, technical and economic policies, fiscal and taxation policies, and funding policies provided by local governments and even the Central Government to form and play the leading role and multiplier effects of science and technology as "the first productive force". In addition, the cooperation mechanism between the government and the enterprise should also be innovated. In recent decades, PPP (Public-Private Partnership Mechanism, which is called the cooperation between the government and social entities in China) has been increasingly concerned and developed. PPP has provided not only a new cooperation mechanism between the government and the enterprise in public works, infrastructure, industrial parks and new towns, etc., but also a broad arena for the combination of various factors.

The examination of the position of the government and the enterprise here has actually changed from the hypothesis of "complete competition" to the "inevitability", and has also extended to the "ought to" cognitive framework of "imperfect competition", as shown in Figure 2.

( To be continued )

贾 康 介 绍

第十一届、十二届全国政协委员、政协经济委员会委员，华夏新供给经济学研究院首席经济学家，中国财政科学研究院研究员、博导，中国财政学会顾问，中国财政学会PPP专业委员会主任委员，国家发改委PPP专家库专家委员会成员，北京市等多地人民政府咨询委员，北京大学等多家高校特聘教授。1995年享受政府特殊津贴。1997年被评为国家百千万人才工程高层次学术带头人。多次受朱镕基、温家宝、胡锦涛和李克强等中央领导同志之邀座谈经济工作（被媒体称之为“中南海问策”）。担任2010年1月8日中央政治局第十八次集体学习“财税体制改革”专题讲解人之一。孙冶方经济学奖、黄达—蒙代尔经济学奖和中国软科学大奖获得者。国家“十一五”、“十二五”和“十三五”规划专家委员会委员。曾长期担任财政部财政科学研究所所长。1988年曾入选亨氏基金项目，到美国匹兹堡大学做访问学者一年。2013年，主编《新供给：经济学理论的中国创新》，发起成立“华夏新供给经济学研究院”和“新供给经济学50人论坛”（任首任院长、首任秘书长），2015年-2016年与苏京春合著出版《新供给经济学》专著、《供给侧改革：新供给简明读本》、以及《中国的坎：如何跨越“中等收入陷阱”》（获评中国图书评论学会和央视的“2016年度中国好书”），2016年出版的《供给侧改革十讲》被中组部、新闻出版广电总局和国家图书馆评为全国精品教材。2017年领衔出版《中国住房制度与房地产税改革》、《新供给：创新发展，攻坚突破》、《构建现代治理基础：中国财税体制改革40年》等。根据《中国社会科学评估》公布的2006～2015年我国哲学社会科学6268种学术期刊700余万篇文献的大数据统计分析，贾康先生的发文量（398篇），总被引频次（4231次）和总下载频次（204115次）均列第一位，综合指数3429，遥居第一，是经济学核心作者中的代表性学者。

贾康学术平台 | 版权属贾康先生，转载请注明“贾康学术平台”，感谢关注与支持！

做学问的甘苦，如鱼在水，冷暖自知，不足为外人道，但关于做学问的“指导思想”，我愿意在此一披襟怀：写出一些论文或著作并不是目的，这是探索之途上的一小步，是争取为人类的思想认识之海中加一滴水。我深信，一切人生的虚荣浮华都是过眼烟云，而真正的学术和真知灼见，才能垂诸久远。

—— 贾 康

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