Affect China's economy Third Hand

Central 2 sets of financial channels, see the impact of certain economists, talking about the Chinese economy two hands, one just can not see succeed, that is, the market mechanism, the other is visible hand, that is, macro-control. Two hands together to improve China's economy.

The so-called "invisible hand", from Adam. Smith's "Wealth of Nations", the original meaning of the individual in economic life only consider their own interests, by the "invisible hand" drives, that is, through the division of labor and market can be achieved by the purpose of the national prosperity. Later, economists continued to further develop this concept, now, talking about invisible succeeded, generally refers to maintaining the healthy development of the market price mechanism, competition and supply and demand mechanism. One of the most important is the role of price adjustment, market competition and the supply-demand through the price of the final adjustment mechanism to complete, continuous equilibrium.

The so-called "visible hand" is the macro-control policy or state intervention. Generally believed that Keynesian economic policies from the point of view, the Keynesian view and the market price mechanism alone can not fully solve the employment problem. Is the core of his policy against the laissez-faire advocates of state intervention, and therefore expand the functions of the government mainly refers to the extension of the tendency of consumption and investment to lure the function. As the visible hand of the two important means that the monetary policy and fiscal policy.

If China's economy is the only role of these two hands, then certainly a healthy and stable macroeconomic development. But in my view, affect China's economy still third hand.

Third hand is the local government and interest groups together to form a hand.

From the central government's macroeconomic control policy, the general introduction of each policy is very timely and correct, but the time is always in the implementation of the deviation, that is because the interests of local and central governments formed by Game results. Take Shanghai, Hangzhou, Beijing, Guangzhou and other cities in the high line rates, for example, is the local governments to pursue their personal interests are the result of the formation. As the central government, of course, hoping for a smooth development of robust health, so as to play a positive role in the cycle can be driven by real estate related industries have developed steadily, to do kind of depend on the multiplier effect of stimulating the economy and improving employment and income. But local governments have the power to their own, are not affordable housing and low-rent housing on the effort, but keep the created one after another to the king.

With a small part of the growing concentration of wealth in some sectors of high and increasing corporate concentration, coupled with some corrupt elements, and gradually formed a certain vested interest groups, the economy gradually voice be controlled by the hands of these vested interests. Their power not only to influence government economic regulation and industrial adjustment policies, can also hurt the competitiveness of SMEs and vitality and disrupt the market competition mechanism and cause a net loss of total social welfare. Majority of small and medium enterprises and private enterprises of a country's economy is truly the essence of vitality and vigor. But from 2009 we see is to enjoy the benefits of national resources or the majority are large state-owned central enterprises, SMEs and private enterprises is still very sad day. If only a small number of enterprise groups to enjoy the policy, access to large loans, then the output of the multiplier effect would be undermined.

It is vested local interests and the formation of these two factors third hand, is a serious interference with China's economy stable and healthy development. This only affects the hands of the implementation of effective macroeconomic policy, under which interfere with the normal operation of the market mechanism. This is third hand before being secretly interfered with both hands, both hands on the former can not play a normal role.

Between central and local governments the right to assign, perfect tax system, how can that enhance local initiative and remain consistent up and down the pace appears to be the future systemic issues need to be resolved. Breaking the pattern of vested interests, give full play to the vitality and competitiveness of SMEs, is the adjustment of industrial policy and market mechanisms in the key step.