I once wrote an article called ‘raising roosters or raising hens’, where I argued that the national wealth should be directed towards supporting ‘hens’ – that is, those people who can directly create wealth for the community, create employment and benefit production. Apart from the first line producers, whether workers, farmers or intellectuals, this also includes the people responsible for managing production, and entrepreneurs who allow limited available social wealth to be optimally configured and reach optimal output. The reason is that the role of these people is comparable to that of hens within the chicken flock. Their important mission is to lay and hatch eggs, expand the population, and add value. No need to say, in order to strengthen and expand the ‘flock’ – the overall strength of our society – we must put the bulk of social wealth at their disposal, so that this wealth can be used in proper ‘incubators, expand the wealth of the people, and national strength. At the same time, we should give less support to the ‘cocks’ – or civil servants – because having too many of them is not only a waste of resources and a limit to development, but may result in there being ‘three monks around and no water to drink’. This is looking at things in terms of the structure of employment nationally. If we look more specifically at national wealth, that is money, there is yet another question: when we consider national wealth (that is, money), should it be live money, or dead money? Specifically, the question is: what exactly should national wealth become, should it be live money, constantly flowing and exchanged, and generating profits and added value, or should it be placed in the hands of a privileged minority demonstrating their status by consuming, or even diverting it, and be dead money, with no way of bringing a profit or added-value?
In fact, on this issue, the ancients already had very clear views. In the Western Han dynasty, when Duke Wang Mang took over the throne, he change the name of ‘money’ to that of ‘spring’. Why? For three reasons. 首先：篆书“泉”的本身具有“源泉”的条形。莽钱特征的阳文悬针篆书“直竖中断”之泉，寓意他实行的币制改革，如潺潺流水，取之不尽、用之不竭。其次，也是更重要的，就是王莽看出钱要真正发挥作用，则必须流通。而将钱易名为泉，就是取“泉”之流遍之意。《周礼·天官·外府》：“掌邦布之出入”。郑玄注：“布泉也，布读为宣布之布，其藏曰泉，取名于水泉，其流行无不遍入出”。《汉书·食货志》：“故货，宝于金，利于刀，流于泉。”颜师古注：“如淳曰‘流行如泉也’。”王莽之“泉”，期望通过他进行的由“纪重货币”到“纪值货币”的币制改革，解决长期以来汉币制之弊端。事实上，他的“纪值货币”在一定程度上缓解了长期以来在贸易上带来的换算不便、找零困难、称量繁琐等矛盾，加速了通商贸易的扩大。最后，将钱文冠以“泉”字，表明“泉”为国家经济命脉的象征，国家将强化货币管理，严禁诸侯国私自铸钱。We can see that for the ancients, the most important feature of money is its fluidity, only money that flows like ‘spring water’ is live money, but if it is hidden to be consumed, it becomes dead money. In modern society, the benefits that can accrue from the circulation of money are even more obvious.
So how will money actually start circulating, and go from dead to live? It’s very simple: put it in the hands of entrepreneurs with genuine modern philosophy and operating models. But in China today, such entrepreneurship is mostly to be found among private entrepreneurs.
In 2010, the former CPPCC chairman Jia Qinlin, in a meeting about non-public entities, spoke about economic and technological innovation among non-public entities. He said that 65% of technological innovation comes from non-public entities, and they’re responsible for 75 to 80% of new products. This should be an objective view: for instance, one of China’s most successful private companies, Huawei, is an innovative company where capital appreciates. Huawei has hired a lot of graduate students, 搞人才集中的企业，允许能干的人入股，这样职工跟企业成为一体，利益共同体，所以内在的动力激发所得，这是一种劳动者的劳动力和劳动者的劳动资本结合的形式，是新型的经济体系。As a result, Huawei joined the hundred or so International Standard Companies, filed over 39000 patents, and in 2009, registered sales revenue of over 21.5 billion US dollars. It accounts for 20% of the market share in global telecommunications, it is the world’s second largest provider of mobile communication devices, 成为拥有自主知识产权、自主品牌的新兴企业，and joined the list of the top500 companies. Of course, 我们也有很多企业跨入之中，但都是垄断型企业，国家没有花一分钱，创造了大量税收，解决了大量就业，而且那么多战略，有哪些公司有39000多专利。劳动者的劳动结合是一种新型经济体，解决了这一问题。然而，就是这样一个能将死钱变活的民营企业却被一些人认为不是搞社会主义，是搞资本主义而加以打压。
Unfortunately, we have seen that in China today, a lot of money is owned by the State. Yale University Professor Chen Zhiwu, a famous economist, pointed out that China’s wealth consists of assets to a value of about 115.6 Trillion Yuan, of which the State owns 76%, while only 24% are held privately. Land, energy and communication networks all belong to the State, and therefore, capital development is lagging, and price formation mechanism has excessive public intervention. For instance, land is one of the most important factors of production, but most of it is in the hands of the government. Under the current performance evaluation and land requisition system, land has become a major source of government revenue and source of foreign investment. 有的地方把招商引资的指标都分到下面去了，分到干部去了，不是搞经济的有些部门都分了指标了。The result is an encouragement for businesses to grow in scale, and a large country suffering from land shortage, much of the land being put to unproductive use, and a serious waste. Another example is that of the service industry where, apart from retail, restaurants and a few others, the rest is all under government control. From finance and banking, telecommunications, and transport to health, culture, entertainment and education, almost all of the key areas of the service sector have enormous barriers to entry, 行政审批拦路，民间资本的进入如蜀道之难，and it is mostly State-owned units that are able to get business licenses. Excessive regulation restricts the development of the service industry, leading to China lagging behind other countries in this sector – the service sector accounts for 38% of GDP in China, while it is over 50% in India. Studies have shown that this difference of over ten percentage points between both countries is largely attributable to the shortcomings of legal and regulatory systems around the service sector.
The illness of concentrating money within government departments, in addition to low-efficient use and waste, and not generating real added-value, has another fatal consequence: that money not only will be dead money, but it may become black money – and become the tool to corrupt officials. According to data from a joint survey from the State Council Research Office, the Central Party School, the office of Propaganda, and the Chinese Academy of Social Sciences, by the end of March 2006, Mainland China had over 27310 people with domestic assets over 50 million Yuan, and 3220 people with assets over 100 million Yuan (excluding assets held overseas). Among those with fortunes over 100 million, 2932 were the children of high-ranking officials. They account for 91% of households with assets over 100 million Yuan, and a total combined of over 2 Trillion. When researching the source of these assets, it was found that they mostly came from the power and capital of the family. So, what did they do with that money? A 380 million villa, a 140 million yacht, a 43 million car, an 18 million watch – the skyrocketing prices of luxury goods appeared. A “research on the Chinese luxury market” published in Forbes shows that as the world entered a recession, China became the world’s most promising market for international luxury goods. On June 22, 2009, “China’s #1 luxury address’, the Tomson Riviera, sold five apartments in one day, at an average price of 110,000 Yuan per square meter. This is not an exception. At the end of May, 7 villas in Shenzhen’s HuaQiaoCheng area sold for an average of 120,000 Yuan per square meter. At the same time, huge amounts of money has flown overseas through the hands of corrupt officials. The data shows that: from the beginning of the unequal treaties in 1842, when China started paying reparations overseas for over sixty years until the end of the Qing Dynasty, a total of 855.19 million silver Taels was paid, equivalent of 71.2 billion Yuan. 而从80年代到现在短短的30多年里，大陆贪官转移到国外仅媒体公布的资金就达8000亿人民币——换言之，贪官转移到国外的财产是满清总赔款的11倍!这些黑钱不仅不仅不能为本国经济发展做贡献，是地地道道的死钱;而且还助长腐败奢侈之风，败坏社会风气。
In the US, this is what the data looks like: the richest 5% of the population control 56% of the wealth, but at the same time, this 5% contributes 86% of the country’s taxes. What does this mean? This means that in America, the concentration of wealth has led to entrepreneurs and investors paying taxes, and so, shows that this wealth has huge returns for the country. This also means, national wealth (money) can be used to generate profit here. At the same time, the government is very poor — America’s founding fathers knew from the start that through control of power and wealth, a government could become a monster, and could come to the point where it would devour the most cherished individual rights of its citizens. And for that reason, the US government doesn’t have much money in its hands, and it’s often happened that government agencies had to close because the budget for them was not approved. If the authority in charge of approving the budget does not approve it, then the government cannot spend money, and projects that require funding cannot continue, as it will be impossible to pay wages. From 1977 to 1996, the Federal Government has had to close 17 times, almost once every year, from one day to 21 days for the longest period. In 1995-96, during the Clinton administration, it closed twice, sending hundreds of thousands of government employees home ‘unemployed’. From September 20, 2013 until September 30, upon insistence from the ‘Tea Party’ part of the Republican party and other conservative forces, the House Speaker John Boehner presented at least three versions of the temporary appropriation bill, and all bundled together Obama’s proposals for healthcare reform, but the Senate, which was not controlled by the Democrats, did not pass it, so that in the end, the federal budget did not materialise. On October 1, non-core Departments of the US government closed their doors. Not until October 7, when Obama signed the military payroll emergency, did 90% of the Pentagon’s employees return to work. The Federal government shutdown finished on October 16 2013.
If China wants a renaissance, first it needs to ensure its money is alive. But if the current situation continues, where the State owns about 76% of the wealth, and most of that money is dead, entrepreneurs and citizens can’t have a share, and the dead money won’t come alive, then finally, not only will it be difficult to grow consumer demand and transition China’s economy, but it will be difficult for the general public to benefit from economic growth, the objective of owning real estate will be no more than hope. And renaissance, by natural process, will become no more than a yearning.
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Source : 21ccom