谢国忠：要改革，流动性不是出路 - Andy Xie: Reform, Not Liquidity, Is the Way Out

I have longed believed that this is a great idea for China. It closes the wealth gap, enshrines market reforms with the populace, and could have positive effects on corporate governance. Here's Mr. Xie:

To solve the demand weakness, China must boost household demand to offset export weakness and decrease property costs to clear the existing inventory. China’s economy cannot resume high growth without both issues addressed. Confidence is not the main reason for the relative weakness of China’s household demand – low household income and wealth are. The quickest solution is to distribute the shares of listed state-owned enterprises the government holds and give them to individual citizens. This will have a powerful short-term effect on consumption. As business profits improve in a booming economy, the shares will appreciate, which will support household demand and make the boom last.

In 1998, the government sold public housing flats to their tenants at notional prices, which laid the foundation for the housing boom afterwards. If China distributes the publicly held shares to the housing sector, it could ensure another decade of economic prosperity.

Later, discussing the property market, he says:

Some hope liquidity would improve the economy through inflating asset markets, i.e., creating another bubble. This is what Greenspan achieved after the tech burst in 2000. Of course, his glory then has become today’s nightmare. Creating another bubble is irresponsible even if it can be done, and I doubt that it can be done in China today. Some of the liquidity did flow into the stock market in December 2008 and January 2009. At its recent peak the stock market rose by 40 percent in three months. But it is extremely hard to manufacture a stock market bubble in a difficult economy. I cannot recall one in modern history. The reason is that speculators are quicker to take profits in a poor economy than in a booming economy.

Further, it is virtually impossible to inflate China’s property market by encouraging speculation, i.e., making funding easier to get and interest rate low. The current inventory is unprecedented by any measure. This is probably the biggest overhang per capita of physical properties completed or under construction in modern history. It would take three years to digest under the best policy combination. Re-inflating the bubble with liquidity is just a pipe dream.

China’s problem is weak household demand. The reasons are low household income and wealth. Confidence is an issue but not the most important one. Strong exports in the past decade supported China’s massive investment. Now we urgently need household demand to replace exports to make the investment profitable. The quickest solution is to redistribute government wealth to the people. Focusing on liquidity only delays the solution and prolongs the hard economic time.

Substitute China for America, the same advice applies.
Reform, Not Liquidity, Is the Way Out

为了解决需求疲软问题，中国政府必须刺激居民消费，以抵销出口下滑带来的影响；降低房地产购买成本，以消化眼下的存量房屋。这两个问题不解决，中国经济便不能重现高速增长。信心并不是中国家庭消费相对疲软的原因，事实上，收入低、财富积累少，才是真正的肇因。最迅速的解决办法是，政府将持有的上市国企股份分配给民众。这对消费而言，必将产生一个强大的短期效应。随着经济高速发展推动企业经营利润提高、股票增值，消费者的有效需求将进一步得到支撑，带动经济持续繁荣发展。

1998年，中国政府将公有住宅以象征性的低价出售给个人，启动了住房制度的改革，为后来房地产市场的繁荣奠定了基础。如果政府将国企的股份分配给家庭部门，将确保新一轮的十年经济增长。

以后：

部分人士希望，扩张流动性能够抬升资产市场价格，进而改善经济，这实际上相当于制造一个新的泡沫。在2000年高科技泡沫破裂后，格林斯潘采用的就是这种做法。时过境迁，格氏昔日的光辉开始成为今日的梦魇。制造新泡沫以应对旧泡沫破裂的后果，是不负责任的行为，即便可以为，也不应为之。

我担心这一悲剧在中国重演。在2008年12月和2009年1月，确实有部分资金流入了股市，在三个月内，股市出现了40％的反弹，创下近期高位。不过，要想在经济衰退时期吹出一个股市泡沫，实在是极其困难，现代历史上还不曾有过，因为投机者此时通常选择快速获利了结。

此外，试图通过投机来推升中国房地产市场价格的做法，也只不过是一个“白日梦”。当前在建的以及完工的房屋，是有史以来数量最多的，即便是借助最佳的政策组合，也需要三年的时间来消化。

中国的经济问题在于疲软的居民需求，其根源在于民众收入低、财富积累少。信心虽然是一个影响因素，但并不是最重要的因素。过去十年，强劲的出口支撑了中国的高额投资。如今，我们迫切希望居民需求可以取代出口，令投资获益。最快的解决办法，是将政府财富分配给公众。寄望于流动性政策，只会延误对经济危机的应对，延长经济衰退。

美国和中国的问题差不多。
谢国忠：要改革，流动性不是出路