Zhang Jun, Fudan's Econ Dean, says China must abandon the construction-oriented budget structure to make room for social spending - and open up services.
I think this would be the right development. If society develops more confidence that future care tasks will be borne by the future generation (e.g. through state-organized redistribution between the generations), there will no longer be any need to save so much and thus take money out of the cycle. In Germany, this was called the "intergenerational contract", which until the 1990s fully secured pensions through the incomes of working people. It was not until the neoliberal changes that this trust was destroyed and the banks were given the business of private pension provision, but at the same time they withdrew the money now saved from the market and, with the pension funds, created an institution that follows the logic of capital with the need to maximize profits, thus adding fuel to the fire of financial speculation.
“Asians have the tradition of frugality,” when westerners were poor they were frugal. When they got money they saved because there were no social safety net. When they had money, they spent it. Chinese with money spend it. It’s not cultural, at least, not for long. But those comments do not detract from his key point, to boost consumption, let people have money, and where possible, have a social safety net to reduce the need to save large amounts of money for a rainy day. No need for roads to nowhere and ghost cities.
I think this would be the right development. If society develops more confidence that future care tasks will be borne by the future generation (e.g. through state-organized redistribution between the generations), there will no longer be any need to save so much and thus take money out of the cycle. In Germany, this was called the "intergenerational contract", which until the 1990s fully secured pensions through the incomes of working people. It was not until the neoliberal changes that this trust was destroyed and the banks were given the business of private pension provision, but at the same time they withdrew the money now saved from the market and, with the pension funds, created an institution that follows the logic of capital with the need to maximize profits, thus adding fuel to the fire of financial speculation.
Translated with www.DeepL.com/Translator (free version)
“Asians have the tradition of frugality,” when westerners were poor they were frugal. When they got money they saved because there were no social safety net. When they had money, they spent it. Chinese with money spend it. It’s not cultural, at least, not for long. But those comments do not detract from his key point, to boost consumption, let people have money, and where possible, have a social safety net to reduce the need to save large amounts of money for a rainy day. No need for roads to nowhere and ghost cities.