Liu Shouying 刘守英
Hello everyone, and happy new year!
Happiness seems hard to find in the PRC right now, with reports of many streets deserted save for hearses standing in queues. We feel pangs thinking of our friends in Beijing and around the country.
People are finding ways to express multilayered feelings—relief, anger, grief, depression, anomie… A long recitation of General Secretary Xi’s diplomatic achievements in 2022 hails his adherence in external affairs to ‘principles of kindness, sincerity, mutual benefit and inclusiveness’ (qīn, chéng, huì, róng lǐniàn亲诚惠容理念).1 This may be taken domestically with a grain of salt, or perhaps an blackmarket Indian analgesic.
A great deal more latitude has suddenly appeared in the educational and propaganda realms. The announcement of an academic project memorialising the ‘great anti-epidemic spirit and its promotion mechanism’ was greeted with revelations on Weibo, China’s Twitter, of its bloated budget. Senior exponents of ‘Marxism with Chinese characteristics’ were evidently to share this, though their anti-epidemic qualifications were unclear.2
Memorialising zero COVID was far from the minds of many, above all practitioners of the dismal science. Liu Shouying, dean of China Renmin University’s Institute of Economics, warned of a ‘war epidemic system’ that remained a threat to the economy. The following translation will hopefully give a sense of how many in the chattering classes are reacting.
Most chilling is Liu’s stark statement that ‘the problems we face are the same as those in Northeast China and elsewhere’—a vision of a nationwide rustbelt.
Liu Shouying
From an epidemic-fighting system to a market system3
Now things have been opened, which is a major change. People will have to ‘get through their days’ next year; some major adjustments are needed in the system. The topic I am talking about today is - from an epidemic-fighting system (战疫体制) to a market system.
1. Features of the epidemic-fighting system
The epidemic-fighting system is a set of systems formed during the three years of the epidemic. Countries have different institutional hallmarks for certain goals at different times. In the past three years, in order to deal with the epidemic, we set up an epidemic-fighting system, second only to a war system. Dividing human systems into three categories, one is a war system; another is an anti-epidemic system; yet another is a conventional system.
Our entire epidemic-fighting system is basically similar to a war system. Its manifestations are as follows:
everything is aimed at epidemic prevention, and the administrative system dominates everything, forming a top-down command system.
signals are transmitted under orders. After transmission to the grassroots, this system allows no flexibility, as it requires execution according to orders.
Yet despite this inflexibility, the grassroots can respond negatively. We could see that the grassroots initially responded to the system quite effectively, but later was exhausted.
When the entire epidemic became uncontrollable on a large scale, the grassroots basically had no way to deal with it.
another feature is: the withdrawal of market entities and market forces.
The anti-epidemic system formed in the past three years was thus largely the administrative system returning and the market system withdrawing. Administrative orders play a leading role.
This is the system I want to talk about. Now we can see that the policy has been liberalised, meaning in fact that we have to change from this anti-epidemic system to a conventional one.
2. Difficulties in restoring the normal system
After liberalisation however it is in fact very difficult to return from the anti-epidemic system to a conventional one. The difficulties mainly manifest in:
the epidemic will not end simply due to opening: an emergency system to deal with it is still needed. When the epidemic spreads in a large area, the entire medical and humanitarian system still needs to play a role. Letting go is not a simple exit, but a change in the anti-epidemic model.
the epidemic-fighting system forms its own inertia, firstly manifested in the fact that it has formed a system. How does this change after it returns to routine? The other manifestation is the way resources are allocated. This is basically via administrative allocation, which is difficult to transfer to market allocation. There are interest relations as well; a huge one is associated with the epidemic-fighting system.
recovery of market forces: when we return to the market system now, the problems we face are the same as those in Northeast China and other places. Who should we turn to?
These three years had a great impact on the existing market economy. Including:
a severe weakening of market power. The main body of the market is reduced. It is very difficult for main bodies of economic activities at all levels to develop; they have lost confidence, and vague sense of future direction. The past development inertia was that as long as one worked hard, there would always be results. No entrepreneur dares say so now.
The other is the interruption of the cycle of the entire national economy and the termination of contracts between enterprises and other enterprises.
I hence think that from 2324, the most difficult thing is how to turn to the market system.
3. The Direction of System Reform
In system terms, next year, we must intensify reforms:
further spread of the epidemic-fighting system to the economic field must be prevented. Epidemic prevention must be limited to just that, to guaranteeing lifelines, and to the humanitarian system. This is an emergency system. That is to say, we need to shift from an anti-epidemic to an emergency response system, but we cannot extend it to the entire economic field. This is very dangerous, and is not out of the question given the residual strength of the anti-epidemic system formed in the past three years.
the market must be restarted. ‘High-quality development’ was mentioned earlier in this forum. Whether or not it is high in 2023, it is essential to survive first. China has in fact had experiences quite like that faced in 2023. One was the early 1980s, the other the 1992 market reforms. To really let the market play a decisive role is to let others do it. The market is created by people, not planned. Like markets I have visited in Yiwu 义务,.4 The first market is at the station, and the second is at the gate of the government. The core of restarting the market is to let people let go, let them find their own way, which is much better than planning it for them. You can’t regulate what they will do, let them find their own way. This is how I see restarting the market.
cultivate market players. In the past three years there’s been huge damage to market players, without whom the economy can have no vitality. Nurturing them requires the state to work hard; places like Jiangsu, Zhejiang and Guangdong have a lot of experience. Spending more time on them is a better role for the state than going in for infrastructure and big projects. Let the main body of the market slow down so that it can start next year on the right track. There are many market players and vitality, and market confidence will be there.
smooth the circulation of the entire national economy. Blocked circulation of the entire national economy is now essentially a systemic problem. Existing pre-epidemic, the problems have been worsened by it. The national economic cycle is one of production, consumption, circulation and income. Behind it is actually the system’s cycle. If the system is not liberalised, the national economic cycle will not be smooth. In 2023 we can, I agree, stabilise growth, start consumption, increase investment, etc. These are our old methods, but 2023 is a special year, whether our system can shift to a market system may be the most important reform. A third round of market-oriented reforms must be launched.
This article is based on Professor Liu Shouying’s speech at the ’China Wealth Management 50 People Forum 2022 Annual Meeting’ (25 December 2022).
Zhu Chao et al., "Writing a new chapter of major power diplomacy with Chinese characteristics”, Qiushi, 31 December 2022 [朱超、等:“谱写中国特色大国外交新华章”,求实,2022年12月 31日 (in Chinese).].
"Big social science project ‘Research on the great aAnti-epidemic spirit’, upended by comments...”, Wangyi, 28 December 2022 [“社科重大项目“伟大抗疫精神及其弘扬机制研究”,评论翻车…”,网易,2022年12月 28日 (in Chinese).
Liu Shouying, "From a war epidemic system to a market system”, , 27 December 2022 [刘守英:“从战疫体制回到市场体制”,爱思想,2022年12月 27日 (in Chinese).].
Yiwu: celebrated ‘wholesale capital’ in Zhejiang.
I've heard of China having an overarching 100 year plan, and I'm interested in reading the text of it. Is there such a thing? If so, got a link?