This article is a speech by Xu Xiaonian, Professor of Economics and Finance at China Europe International Business School, at the 2016 Summer Economic Forum on October 28th.
The following is the speech content:
good morning guys. I am very happy to have an exchange with you here. The content I am talking about today is divided into two parts, one is the macro economy and the latter part is the micro economy.
In general, there is nothing in the macro economy, but there is great hope at the micro level.
Why is L-type growth?
Let me first talk about the origin of L-shaped growth. In May of this year, the People’s Daily published an interview with an authoritative person. The author in the interview said that the future trend of China’s economy is neither U-shaped nor V-shaped, but L-shaped. The L-type is a long-term squatting at the bottom, and it is in a state of low growth for a long time. I am very supportive of this view of the L-type judgment. The judgment of L-type is directly related to the new normal state announced by the central government some time ago. These two statements are behind an economic analysis. After 30 years of economic growth, we will face a long-term low-growth stage in the future. . For this, companies must be fully prepared.
Why does the Chinese economy enter the L-type? How long does the Chinese economy stay in the L-type? How can we break through the L-type and enter a new stage of growth? This is what I am going to talk about today.
Before I talk, I would like to say why we use mathematical expressions for economic analysis. This is to provide you with a logical structure for analyzing economic phenomena, including the business situation of enterprises. The importance of this analytical framework is to provide analysts. A thought to consider a variety of factors. This world is not a combination of single factors, but a macroeconomic situation that is manifested by a combination of factors. Business operations also involve many factors, such as market form, consumer demand, corporate strategy, business model, human resource management, marketing channel management, product development, and so on.
Here I want to say a little more about thinking. In our way of thinking, abstract thinking has long been neglected, so that our abstract thinking ability is relatively weak. The low level of abstract thinking ability not only hinders our analysis of economic phenomena and business conditions, but also has a particularly large The negative impact is that our company's ability to innovate cannot be improved.
Innovation requires a little abstract thinking. Because innovation is doing what the predecessors have not done, and is doing what they have not seen. It is equivalent to entering a non-experienced world, imagining new products and new technologies in this inexperienced world.
One of the reasons why Chinese enterprises have weak innovation ability is that their abstract thinking ability is relatively poor.
Since we have to analyze multiple factors, we must have a framework that can incorporate multiple factors into a unified formula, so I will spend a little time here on this analytical framework. If you can grasp this analysis framework, the following introduction will become simple.
The first formula is about the relationship between input and output. The output is expressed in Y. You can think of Y as the country's GDP, or you can use Y as the total output of the enterprise. What determines the output GDP? What? It is determined by three factors on the right. A represents the technical level. This technical level includes not only the efficiency of production equipment, but also business model, organization management, and even corporate culture. Anyone who can improve the efficiency of resource use is regarded as A. K stands for capital investment and L stands for labor input. Of course, the company's investment is more than these. In order to simplify the analysis, we only give the three inputs on the right, one is technology A, one is capital K, and one is labor L. This β is an empirical coefficient and is obtained by regression of empirical data. This formula has national statistics confirming its establishment.
The most valuable thing is actually GDP per capita, that is, per capita output. Because it is not the total GDP, but the GDP per capita that determines the living standards of a country's people. The expression of per capita GDP is not difficult to launch. Let's take a closer look at the formula for per capita GDP. In per capita GDP (Y/L), L is the labor population, and Y is GDP, so this is GDP per capita. It depends on two factors, one is A (technical level). The second is the capital stock K divided by the value of the labor stock L. In other words, the output of a country's nationals depends on the skill level A and the per capita capital possession (Y/L).
Why understand this relationship? We can clearly articulate two different growth models and two different models of corporate development.
One type is called quantitative growth, which is to increase capital investment. Look at the right side of the formula. If you increase K (capital), you increase the per capita capital possession. Of course, the per capita output on the left increases. We call this growth model and the model of business operation a quantitative growth. He relies on the amount of resource input to drive growth. The second type of growth is that K (capital) does not increase, and A (technical level) is increased. This growth model is called efficiency growth.
After making these two types of distinctions, ask everyone here, what type of growth has the Chinese economy grown over the past decade? Yes, we have grown in number over the past decade. By relying on the government to adopt expansionary fiscal policies and expansionary monetary policies to stimulate investment by enterprises and governments, the source of economic growth over the past decade has come from the increase in investment capital, rather than from efficiency gains and technological advances. .
What is the problem with the capital-driven economic growth model?
There is a common view that the Chinese economy is no problem. The difficulty encountered by the Chinese economy is the cessation of external demand. We have a strong government. The government has unlimited resources. As long as the government invests, the Chinese economy can continue to grow. This point of view, where is the problem?
There is a knowledge point in economics called the law of diminishing marginal returns of capital. It is conceivable that farmers operating fields have only had very simple labor tools, such as hoes and sickles. This very simple method of agricultural production is very inefficient and the per capita capital possession is also very low. Now, you have to equip him with a tractor. Imagine that under other conditions, the output of farmers will increase a lot. But if you give him a second tractor, will the output increase by the same amount? Give him another third one?
For each additional tractor, the yield increase effect is different. The second tractor has a much lower yield than the first one, and the third tractor has almost zero production.
This simple example tells us that a general law of economics is that the marginal return of capital is diminishing. Simply increasing the capital possession of the peasant can increase his output, but the output from each unit of new capital. The added value is decremented and will eventually be reduced to zero or even reduced to negative. This is called the diminishing marginal return of capital. This is a general law. When the marginal return of capital is equal to zero, does investment have a pulling effect on the macro economy? Does investment also contribute to the increase in corporate output?
No more. What is the problem with quantitative growth due to the existence of the law of diminishing returns to capital margins? It is unsustainable, no matter how much K (capital) you add, it can't drive growth.
When the investment income is zero, monetary policy is useless. The central bank sends money to encourage banks to lend to enterprises. Will enterprises invest in the real economy after they get loans? No, why not? Because the real economy has no investment income, so where did the funds go? The property market, these are very obvious in Shenzhen, it is also very obvious in Shanghai, have gone to the property market.
The real economy has no money to go in, and the leaders are very anxious. Leaders have repeatedly said that financial institutions must support the development of the real economy. All walks of life must support the real economy. How can they support the real economy? Is it just spending money? Now is not a question of money, the economy is not bad money, the enterprise is not bad money, the poor is the investment opportunity that can make money, and the poor is the investment project that can get the return. Therefore, capital entering real estate is a rational choice for enterprises and ordinary people. You can't blame them. The bubble is the rational decision of the economic individual. The reason why the bubble appears is because the policy is irrational. Under the irrational policy, the rational individual makes the decision, and thus the asset bubble is generated. As a result, money has arrived in the capital market. Last year was the stock market. This year is the property market.
Since quantitative growth has reached its limits, where is the key to maintaining sustainable economic growth?
It lies in the technical level A. Then someone asked, is there a problem with the diminishing marginal income at the technical level? No, why doesn't it exist? In other words, why is the technology level sustainable? Because human ability to understand the economy and nature is endless. The level of technology can be continuously improved, and when the marginal benefits of an old technology diminish, new technologies are created. Constant technological innovation has enabled mankind to enter a stage of sustained growth after the industrial revolution.
200 years ago, the productivity and per capita GDP of the agricultural society were long at a low level. Only after the industrial revolution, the economy entered a stage of sustained growth. The most fundamental driving force for this sustained growth is continuous technological progress from steam engines. Start with electricity, railways, internal combustion engines, followed by cars, radios, electronics and computers, all the way to today's mobile Internet. This technological level of innovation will never stop, it is the fundamental guarantee for sustainable economic growth.
Going back to the topic, why does the L-shape of the Chinese economy appear?
The reason is that in the past, investment has been driven by economic growth, but it has not realized that the investment-driven growth model obeys the law of diminishing returns. When the marginal return is equal to zero, how to invest in the economy can not go any further. If we don't change the growth model now, we will stay in L-shaped growth for a long time, the so-called middle income trap. The middle-income trap is, in the final analysis, a backward country that can take advantage of capital accumulation to achieve economic take-off, but when the economy takes off, if it still depends on capital, then it will enter the middle-income trap.
How can we break the middle income trap when investment cannot create new value ? It is to shift the growth model from capital accumulation to technological innovation.
Therefore, the era of capital-driven economy has ended, and the era of technological innovation has arrived. If the company can't adapt to this turning point, then it may be eliminated by market competition. If the national economy cannot adapt to this turning point, it is the middle income trap, which is the long-term L-type.
I have seen many companies have realized the crisis, but I don't know where the direction is, or know where to break out, but I don't know how to do it. There are so many companies, I feel that many will be eliminated.
Supply side reform in the eyes of Xu Xiaonian
In response to the problems of the Chinese economy, the central government has proposed a new normal of the economy at this time, and proposed the supply side. I think it is very timely. In the past, economic growth relied on the government to spend money and the central bank to release water. This role all played a role on the demand side, especially to stimulate investment demand. The supply side contains the technical level, and the main body of the drive technology reform is the enterprise. Therefore, the shift to the supply side means to shift the driving force of economic growth from government policy to enterprise benefit. Taking the enterprise as the core, we seek the power of economic growth to improve the efficiency of the enterprise and seek rapid economic growth. This is the supply side reform I understand.
The technical reform is basically unrelated to the government. Is it because of fiscal policy or monetary policy? Does it have an impact on technology? Does it affect the technical level of the company? To put it bluntly, there is no impact. To be frank, the government’s macro policy has the effect of reducing the technological innovation of enterprises.
In addition, we need to know the three consequences of over-reliance on investment to drive the economy. The consequence of K (capital) growth is overcapacity. We have a very strange logic in the face of overcapacity: since there is excess capacity, we will drive demand. This logic is very strange, why not cut excess capacity?
Due to overcapacity, companies have to bid for sales. As a result, GDP has been negative for more than 50 consecutive months. It is said that it has finally become positive growth last month. However, now I don't know how to interpret it. Anyway, I don't understand it, and many of them are not.
Under the pressure of excess capacity, companies can only cut prices. This picture tells us how serious excess capacity is. Another consequence of this K (capital) growth is the rising debt ratio. Since the financial crisis, our debt ratio has grown by leaps and bounds, increasing by almost 100 percentage points, from 160% to 260%, which is a terrible systemic risk. This is the consequence of K (capital) growth.
Now that the central direction of the policy begins to shift from the demand side to the supply side in time, what is the supply side policy to do? I think that we must first clean up the systemic risks left by the past K (capital) growth. This is the first thing to do. This systemic risk is on the supply side and not on the demand side. If the excess capacity is not cleared, the benefits of the enterprise will become worse and worse, and the bankruptcy of the enterprise will be unavoidable, so the removal of excess capacity is the first task. The second major task is to de-leverage, and the third is to reduce capacity and reduce debt ratio. This is a systemic risk left by K (capital) growth.
The central government proposed three missions to control systemic risks, but I can't understand what I actually did. What we are doing now is not to leverage, but to shift leverage. Leverage is debt. We are now putting corporate and government liabilities. Transferred to the residential sector, the transfer of the real estate market is hot. Adding a lever to buy a house, where is the money sold by the house? Going to the government and helping the government to reduce leverage, this is not a downward lever for the entire economy. This is just a transfer of leverage. The central policy direction is correct, but why is it all the way to do it?
Going to stock is quite right? Everyone knows that an old farmer can’t sell cabbage in the vegetable market. How should his inventory fall? Naturally, it is cheaper to sell, and the price is reduced to inventory. But now we are going to increase prices to go to stocks. What logic is this? I still don't understand. Is there any price increase in the world to stock? Some people say that the Chinese people are like this. The more they cut the price, the less they buy it. It is true that the real estate market is rushing to buy at a rising price, and the price is lowered and the price is expected to fall further. It seems that it makes sense.
However, with the skyrocketing real estate prices, what happened on the land market? The skyrocketing price sent the wrong signal to the real estate enterprises. The landlord frequently appeared. The real estate developers were robbing the land. After the land was grabbed, the land was placed there. What are the results of your development and development? More inventory. Where is this going to stock? This is plus inventory.
What should I do to get rid of capacity? Very simple, let the loss-making enterprises close, the production capacity is gone. In the past, listed companies could close down. Now it is not working. Banks are not allowed to collect debts and continue to supply funds. Is this going to capacity? Capacity is still increasing. You don't let these zombie companies go bankrupt, how do you get to capacity?
What should the supply side reform do?
What should the real supply-side reform be? I can only say what the supply side should do. I don't know what the supply side will actually do. These are two different kinds of problems, and we often mix them up. There is a problem in the world called the problem. There is a kind of problem called the problem. As a scholar, I can only talk about the problem. What should it be? But I have no way of saying what it will be. What will it be? That is a real problem. The actual policy is not something we can solve. It can only talk about the policy of ought to be.
What should the supply side do to promote the company to improve A (technical level) , I make several suggestions here:
The first proposal is a comprehensive tax cut, not a structural tax cut. In the past, structural tax cuts have increased or decreased. In fact, the increase is more than the decrease. Tax cuts are not only to reduce the burden on enterprises, but also to allocate more resources to enterprises and markets to configure, rather than the government to allocate, to give more resources to enterprises for research and development.
The second proposal is to reduce the size of the state-owned economy, because it is impossible to improve A (technical level) by the state-owned economy, because state-owned enterprises have no pressure for innovation and no incentive to innovate. If you want to innovate, you must rely on private enterprises. . I am not criticizing state-owned enterprises, but rather insisting on the general direction of China's reform and opening up 30 years, because state-owned enterprises have not improved the incentive mechanism of A (technical level).
Why is Dachen doing so well? Because managers are bound to the interests of enterprises, do state-owned enterprises have this mechanism? No, the wages of state-owned enterprises are fixed, and they are decreasing. You let state-owned enterprise managers take hundreds of thousands of yuan a year, but manage hundreds of billions of assets. What is the result? How could he have the enthusiasm and pressure to do technological innovation? He does not have this incentive mechanism, so if you want to improve the A (technical level) of the national economy, you must narrow the scope of the state-owned economy, promote privatization, and promote market-oriented reforms.
The third suggestion is that there are any problems for private enterprise enterprises now? Many private enterprises, although there are incentive systems, and they are developing very well, can be listed, but we have seen many private entrepreneurs now not thinking about A (technical level), but in US. Private entrepreneurs are immigrants, want to bring their wives and children to Silicon Valley, why? Because there is a very good educational environment, all of them are going to the school district. There is a city of Palo Alto next to Silicon Valley. The price of the house there is not worse than that of Shenzhen. What do Chinese buy, what will go up, what will be sold, what? It will fall.
The minds of private entrepreneurs are not innovative, and they want to emigrate. This is also the reason why the renminbi is depreciating constantly. The assets are outflowing too much, so the renminbi is devalued. Therefore, the RMB exchange rate is now a new scale. In order to strengthen the confidence of Chinese entrepreneurs, in order to allow them to invest in this land to prosper our country's economy, we must give him confidence. There are two reasons for his lack of confidence: the first reason is business, the Chinese economy is on the downside, and the US economy is doing well, so the funds flow to the United States. The second reason is that in law, he feels that there is no way to guarantee the security of the property. For example, the public opinion that the country is now reversing the Cultural Revolution has made some entrepreneurs daunting and choose to go.
In order to enable private enterprises to use their resources, time and energy for innovation, and to improve A (technical level), what do we have to do? What should the government do? What can the government do?
Protecting private property rights and making credible commitments to private property rights. This credible commitment does not come from the speech of the mayor, but comes from the legal system. Therefore, judicial reform should be promoted in accordance with the requirements of the Fourth Plenary Session of the 18th Central Committee. A measure that is very important to the supply side.
The second measure is the third plenary session of the 18th Central Committee. It is necessary to let the market play a decisive role in allocating resources. In order for the market to play a decisive role in allocating resources, it is necessary to narrow the scope of the state-owned economy, because the resource allocation of the state-owned economy is administrative, not market-oriented. You must make the private enterprise prosperously prosper the Chinese economy. Investment, research and development, to improve A (technical level), we must promote judicial reform, protect the security of private property rights, and create a good environment for them.
The above are some suggestions for the supply-side reform that I have issued. As for the actual policy, I don't know.
If there is no substantial change on the supply side
If we can't see these substantial changes in the supply side system, then our L-shaped tail may drag on for a long time. I think the key to jumping out of the L-shaped trap is the ones I just mentioned, with government expenditure. It has nothing to do with the central bank's release of water. It has nothing to do with the RMB exchange rate. It has nothing to do with the housing prices in Shenzhen. What really needs to be done is institutional reform, which enables enterprises to concentrate and resources to upgrade A (technical level) in order to get rid of L-shaped Long tail, enter a new stage of development.
Without these substantial reforms, more enterprises will have operational difficulties, local governments may have debt defaults, and the renminbi will continue to depreciate because of the continued outflow of capital, but it will not collapse, and the fundamentals of the stock market will continue to deteriorate. Short-term prosperity is difficult to maintain.
Microeconomics are more and more hopeful
The above is the status quo of the macro economy. So is there no hope for the Chinese economy? No, my personal point of view is that the worse the macro economy is, the more hopeful the micro economy is. Let me talk about the micro economy.
First of all, the worse the macro economy is, the more hopeful the micro economy is. What is the logic of this?
If you are poor, you will change your mind. If you are comfortable and comfortable, you will not change. My traditional business model is very good, why should I change? The country's economic development is also a 10% annual growth is very good, all day long to say this reform, what reform is necessary?
Now that the economy is not good, you will talk to the government about reforms. It will be heard more than before. Now that you are talking about transformation with the company, it is willing to listen. But what do macroeconomic policies have to do with companies? Macro policy has nothing to do with you. The macro level is not good, but there have been many encouraging changes at the corporate level, and they are willing to transform.
First of all, to correct a concept, transformation does not mean switching, not to be bad. Transformation refers to the transformation of business models, not from manufacturing to finance. Some people say that transformation is looking for death, and not transforming is waiting for death. Because he understands transformation as a turnaround, it is to find death, because he has no experience at all in the new industry.
Here, I introduce an old book, not a popular book. The garbage in the popular book is mostly. If I read it, I still recommend reading the classics and not reading popular books.
This book is Drucker's Innovation and Entrepreneurship. This book emphasizes several points of view, and I strongly agree. One of the points is, does innovation require high technology? In traditional industries, innovation is a huge opportunity. Another point of view is that innovation requires concentration, and it requires the accumulation of experience. Only in this industry has been working for many years to know where the core problems of this industry are. Drucker has cited many cases in this book, all of which are about this truth. Traditional industries can innovate, innovation must be focused, and there is no way to think about it.
Since there are very few things that can be studied at the macro level, there are very few things that can be said. In recent years, I have spent more and more time on corporate research. I spent a lot of time investigating and interviewing companies. Cases of innovation in traditional industries fully support Drucker's views in this book. In the traditional industry, there is still much to be done.
For example , in the clothing industry, the past business model opened a trade fair once a year, and the sales volume of the next year was reported by each sales channel. After the sales volume was reported, it was produced and shipped by the manufacturer and sold in the market. This model has been unable to adapt to the new situation. What is the new situation? The ladies present here should have a stronger feeling. Is the current clothing manufacturer changing the style once a year? No, so some companies began to change his business model.
The business model that has changed the business model is good, and it can grow against the trend. In the whole clothing industry or when sales are stagnant, he can grow by 10% or 20% because he changed in time. In the business model, orders will start at least once a quarter. Now it is not enough to start once in a quarter. It is necessary to continuously introduce new styles and introduce new styles. All adjustments must be made from the design and sales production.
Who is the richest man in Japan? The owner of Uniqlo is the clothing industry and is a traditional industry. What strategy can he rely on to be the richest man in Japan? Not a quick update, the style of Uniqlo has not changed for many years, it is all basic, so why can it be so successful? Where is its A (technical level)? Where is its innovation?
In the fabric, Uniqlo's investment in fabric research is no match for other clothing industry. Uniqlo and the university have long-term cooperation, fabric development, fabrics are different from other people's fabrics, and they are very comfortable and warm to wear. People's favorite, which made the Uniqlo boss the richest man in Japan.
There are many opportunities for innovation in traditional industries.
There are many opportunities in the traditional industry. If you have big data, cloud computing, artificial intelligence, it's good. No, you don't have to be arrogant, focus on doing in your own industry, differentiated competitive development products and technologies, you can make ZARA, you can also make UNIQLO, what high-tech is used by ZARA and Uniqlo? No high technology.
Continue to innovate in the traditional industry, do not have to be pessimistic because of their own technology, no big data, cloud computing, artificial intelligence, traditional industries can still be innovative, but the accumulation of experience requires the process of combing and optimization, the need for technology understanding.
I have always put forward a slogan called all walks of life + Internet, not Internet +, Internet + is a misleading direction. The Internet+ was proposed by government officials. They have not run a business. How can they know the direction of the future industry? Why are you listening to him?
We can listen to such concepts as China Manufacturing, Industry 4.0, etc., but we should not take it apart from the words "listening" and "slave". Should we listen more and less, and when should we? Only after your own independent thinking, you understand, you think that it works logically and empirically. Only then should you act, so don’t follow the popular slogan in the market, you will be confused and confused. .
Transformation, we have repeatedly stressed that the transformation needs to be focused and persistent stupid people, do not need smart people, do not look for the gulf of policy, or the slogan of business, to abandon the habit of opportunism, my students once asked me: Professor, where do you think the next vent is? He said that as long as the wind is on the pig, the pig can fly. I said that you have lowered yourself to the level of pigs. What else do I have to say to you?
This opportunistic habit has not worked in this technology-driven era, and it is possible in a capital-driven era.
Transformation needs to cultivate its own independent thinking ability, don't chase the wind, follow the trend is no innovation, do what others are doing is not called innovation, it is called imitation, Chinese enterprises lack the ability to think independently, so his behavior becomes What is the behavior of the people in the crowd, what do others do?
There is a company called Haidilao, which is a hot pot. After I went there, the experience was really good. I went to Haidilao in several cities. After entering, the service standards are all high standards. I open one or two stores in a city, and the service standards are relatively high, and it is not difficult to compare them. The difficulty is that the quality of the national chain of services can be guaranteed. The characteristic of Haidilao is that human resource management is an incentive mechanism, and the incentive mechanism can be detailed to every employee. What is innovation and innovation? The so-called innovation is to do things that the predecessors have not done, to do things that the peers have not done, to do things that they have not done, this is called innovation. Of course, the premise is to bring value to customers.
Plausible concept
There are many paradoxical concepts on the road to innovation that create obstacles for us.
Internet thinking, why should we say Internet thinking? The Internet is just one of many technological innovations of mankind since the Industrial Revolution. Why does the Internet have a separate set of thinking? The steam engine has no thinking, the computer has no thinking, the most intelligent artificial intelligence, and no one has proposed artificial intelligence thinking. Why do you have to have an Internet thinking? I don't understand.
The ecological circle creates an ecological circle, and the ecological circle is not driven by marketing and subsidies. You rely on subsidies to create an ecological circle, just like putting a pile of grass on the ground in the prairie. The result is that the sheep are all coming. After eating, they are all scattered. What is the ecological circle? By fence, you have to circle a fence on the grass. This fence is in economic terms, called entry and exit barriers, in order to create an ecosystem.
Is the ecosystem of Apple's mobile phone dependent on subsidies? Apple does have a big ecosystem. Its ecosystem relies on two very important technologies. One is a mobile phone. Your mobile phone must be the best mobile phone in the market, and everyone will buy your things. Then the second is Apple's IOS system, without the support of the IOS operating system and high-performance mobile phones, Apple's ecosystem said it would be embarrassing. How can it keep the ecosystem by price? The ecological circle is to have a fence. If you want him to come in, you can't get out. Instead of throwing a grass on the grass, give a subsidy.
Nowadays, many taxi companies are in a difficult position, giving subsidized talents, and when the subsidy is cancelled, people will be gone. How can Chinese consumers have loyalty? Chinese consumers are only loyal to money, not loyal to any brand, and why are they loyal to you? When your price is higher than a taxi, why spend it here? I also don't consume it, so the ecosystem is a misleading concept.
The sharing economy is another. I have to draw a big question mark for all such slogans. The sharing economy is a concept promoted by the media. Why do we believe?
The sharing economy only uses a small amount of private excess capacity. But the foundation of the sharing economy is private property rights, such as Airbnb. You go to live in a house. If you don't pay, who will share it with you? And Uber, you don't pay who will make you a white taxi?
The market economy has always been exclusive , not shared, and private property rights are exclusive, not shared. If you are a communist society, it is another matter. It is your ideal. The real economy is not like this.
With private property rights, there can be no sharing economy. How can the sharing economy become a future trend? We are often stunned by these very fashionable concepts and lose our ability to judge. This is why we are beginning to introduce an analytical framework that is designed to help us gain independent thinking.
Besides, Industry 4.0 was blown away. I went to the following company and said, "You still said 4.0? Even 2.0 did not do, what 4.0?"
In the process of clarifying these plausible concepts, I made a summary: Industry 4.0 or the future direction, but for many Chinese companies, for most Chinese companies, the current problem is not industrial. 4.0, but Industry 2.0 and Industry 3.0. If you do Industrial 3.0, this efficiency will be greatly improved.
Overtaking in a corner is a delusion
Starting from Industry 1.0, 1.0 is mechanized and motorized. Industry 2.0 is automated and streamlined, along with standardization in the process of automation and process. Industry 3.0 is information technology and Industry 4.0 is intelligent.
I think this may be a more realistic description of China's current situation. Most companies stay at 2.0 or even not at the 2.0 stage. These versions of the industry are beyond my reach. Now there is a popular saying called "Curve overtaking". I said that you are super car? Everyone knows that the curve can't be accelerated. The curve should be slowed down. If you bend the curve, the result is not overtaking but rolling. The overtaking of the curve is also a very harmful concept.
Don't tell me to overtake a corner, honestly start from your own business, what to do, to improve efficiency bit by bit, the foundation is evergreen. If you want to opportunistically, it is a misunderstanding of the old opportunism in the new situation. We cannot do things seriously and improve the management of all aspects of the company. This is our problem.
The macro economy will continue to be sluggish, but this does not mean that we are doing nothing at the micro level. The worse the macro economy is, the stronger the motivation and pressure for micro-transformation innovation. I am optimistic about the future of the Chinese economy.
We have fertile commercial soil and rich entrepreneur resources. The most valuable resource for China's economic development is entrepreneurs. I believe that in the face of the L-shaped economic situation, government policies will turn to pragmatic and turn to reform. There is no reason to be pessimistic about the future. .
thank you all.
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