Consuming China
Two world powers have had industrial growth faster than 10 per cent per annum for a decade, driven private consumption below 50 per cent of output and centred their economic strategy on investment. One is modern China. The other was Stalinist Russia. While China has forsworn communist economics, it is still excessively favouring investment over consumption. That produces rapid growth but risks instability in the future.
In its latest staff report, the International Monetary Fund casts doubt on China's ability to control investment growth. The danger is that overinvestment leads ultimately to a collapse in prices and profits, leaving banks with non-performing loans and sharply slowing the pace of economic growth.
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It is hard to calculate the limits to investment growth in an economy awash with surplus labour and cheap capital. Rampant economic growth - of more than 10 per cent - is possible without triggering inflation. China may be overheating but it is not melting.
The danger is rather misallocation of capital. That could lead to deflation, if there is too much productive capacity relative to demand, or make the economy overdependent on foreign demand. The risks of misallocation are increased by an undervalued real exchange rate, capital controls and incentives to reinvest profits rather than pay dividends.
The undervalued real exchange rate is at the heart of the problem. It encourages investment in export capacity. Even more important, it requires low interest rates to reduce speculation against the currency. Low interest rates are a further stimulus to investment at home, while capital controls discourage companies from seeking higher returns abroad.
Beijing has tried to moderate investment by administrative fiat. It has ordered the provinces to restrain property speculation, curb polluting industries and halt construction of new steel mills and car plants. But provincial officials - who believe they will be judged on economic growth alone - have done little. Even if they do stop some investments, these may include the most efficient projects.
What China needs is a managed appreciation of the currency, higher interest rates, some relaxation of capital controls and a better social security net for the poor. The last will raise consumption both directly and, by reducing the precautionary motive to save, indirectly, as well. Beijing has allowed some currency appreciation but the process is desperately slow.
China's transition to greater reliance on consumption must happen. This was never an issue for Stalin because the welfare of his people was of no concern. But China must respond to its people's aspirations for a higher standard of living. The country should spend and consume more. The sooner that shift begins, the better for China's economy, for its people and for its relations with the rest of the world.
中国需要更多消费
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两个世界大国的年工业增幅都曾连续10年高于10%，令私人消费低于经济产出的50%，并将投资作为经济战略的中心。其中一个是现代的中国，另一个是斯大林时代的俄罗斯。尽管中国已经放弃了社会主义经济，但它仍过度偏爱投资而非消费。这一做法带来了经济的高速增长，却也让未来的稳定面临风险。
国际货币基金组织(IMF)在最新发布的员工报告中，对中国控制投资增长的能力表示怀疑。该报告指出，危险在于，过度投资最终将导致价格和利润水平崩溃，银行不良贷款堆积，经济增长步伐急剧放缓。
如果一个经济体剩余劳动力和廉价资本泛滥，就很难计算出其投资增长的极限。在不引发通胀的情况下实现经济的迅猛增长(超过10%)，是有可能的。中国经济也许过热，但并未热到“融化”程度。
更确切地说，中国的危险在于资本配置不当(misallocation of capital)。如果产能相对于需求而言过多，或使经济增长过度依赖于外国需求，那么资本配置不当就可能导致通货紧缩。低估的实际汇率水平、资本控制、以及鼓励企业将利润用于再投资而非发放股息的做法，都加大了资本配置不当的风险。
问题的核心是实际汇率水平被低估。它鼓励了企业对出口产能的投资。更重要的是，它要求央行保持低利率，以减少市场对货币的投机。低利率进一步刺激了国内的投资，而资本控制也阻碍了企业在国外寻求更高的回报。
中国一直尝试通过行政命令减少投资。它要求各省限制房地产投资，抑制污染行业的增长，停止建造新的钢铁厂和汽车厂。但省级政府官员相信，经济增长是衡量其政绩的唯一标准，因此他们鲜有行动。即使他们的确阻止了一些投资，这些被停掉的工程中可能包括效率最高的项目。
中国需要的是有管理的汇率升值，提高利率，适当放松对资本的管制，改善针对穷人的社会保障体系。完善社会保障体系，既可以直接提高消费水平，又可通过减少储蓄动机，间接促进消费。北京已允许人民币有所升值，但其进程实在太慢。
中国必须转向更加依赖消费。这对斯大林来说从来就不是问题，因为他根本就不关心人民的福利。但中国政府必须响应人民对更高生活水平的憧憬。中国应该提高支出和消费水平。这种转变开始得越早，就越有利于中国经济、中国人民和中国与世界其它国家的关系。
