Tang Dajie is the Head of Research at the Beijing based CEI Foundation and a Visiting Research Fellow at the Wuhan University Finance, Tax and Law Research Centre.  He published an article on the Chinese Ai Sixiang website (爱思想) on 29th March 2020 entitled: “To Protect People’s Livelihoods, A Recommendation to Make Immediate Cash Payments to Chinese Nationals” (Chinese title below).

In this article the author recommends that the Chinese government should make payments of 2,000 Renminbi (approximately £230 or US$282) to every Chinese national, with higher payments of 5,000 Renminbi to residents of Hubei Province and areas with below average incomes.

The author points out that the Chinese government has taken many measures during the Covid-19 crisis to stabilise the economy and employment.  However, he points out that the US Congress has approved $1,200 payments to every adult in the United States, while the UK is subsidising wages up to £2,500 per month.  He considers the measures implemented to date by the Chinese government will take time to work through to the real economy and argues that direct cash payments to individuals would stimulate demand more quickly.  He also considers that the speed of delivering relief is more important than the size of the stabilising measures already implemented.

He recommends that the Chinese government should follow the very simple and effective approach adopted by the Hong Kong government in 2011 when it implemented the 2011 ‘Scheme $6,000’.  He calculates that the total cost to the Chinese treasury would be around 300 billion Renminbi (£35 billion or US$42 billion).  He says that if the government is not able to raise the money quickly enough through debt issuance, then it should draw the cash from what he describes as the Chinese treasury’s ‘revolving funds’.

Comment: This is an excellent proposal, but I doubt there is a realistic prospect of the Chinese government making the payments that the author recommends (at least not for the time being).  My impression is that Xi Jinping and the Chinese government have so far prioritised saving lives ahead of protecting people’s livelihoods.  They have put a lot of pressure on employers to maintain employment levels and may well feel they have done enough.  It appears the Chinese public is broadly satisfied with the way the crisis has been dealt with to date, apart from ongoing concerns about the initial delay in tackling it in Hubei Province.  Bearing in mind that the Covid-19 crisis is far from being fully over even in China, I expect they will not want to take the risk of further depleting their finances at this point.  If the Chinese economy is slow to recover, causing serious hardship to many people, that assessment could change.    

评论

尽管唐大杰在这篇文章中提到的建议是极好的，但我不认为中国政府会不会这样大幅度的向国民发钱，至少在短期内可能不会。习近平和中国政府迄今为止在抗击疫情的行为中给人留下的印象是他们优先考虑人民的生命，而不是民生。中国政府给雇主施加了压力以保持疫情爆发前的就业水平，他们可能觉得这么做足以解决民生问题。虽然中国人仍然怀疑在早期湖北省抗击疫情中有延迟的情况，但是看来他们对政府随后缓解危机的行为是满意的。鉴于新冠疫情冲击甚至在中国内都远没有结束，我认为中国政府目前不会愿意冒减少国库储备的风险。如果中国的经济需要长时间才能恢复，并且导致人民陷入困境，我可能会改变这个想法。

Note: the Chinese title of the original article is: “恢复经济保障民生，建议立即向国民发钱”

4th April 2020 – Michael Ingle (michaelingle01@gmail.com)

Categories: Uncategorized

Tags: 唐大杰，恢复经济保障民生建议立即向国民发钱，中国经济，新冠疫情