Under the concern of the CPC Central Committee with the Supreme Leader as the core, the post-earthquake recovery and reconstruction work in Wenchuan has achieved remarkable results. The picture shows the rural scenery of Xiushui Town, Anzhou District, Mianyang City, Sichuan Province. Xinhua news agency

　　In the new era, a prominent feature of the Party Central Committee governing the country with the Supreme Leader as the core is to speak clearly about politics. Since the 19th National Congress of the Communist Party of China, General Secretary of the Supreme Leader has pointed out on many occasions that the quality and ability of a cadre in party member should first be judged by whether he is politically stable and reliable, and whether he consciously safeguards the authority of the CPC Central Committee and centralizes and leads. Among all the abilities of leading cadres, political ability is the first. Grasping the connotation of current politics and its ruling logic scientifically is of great practical significance for improving political position, strengthening political awareness and enhancing political skills.

　　1. The political mission of the Party in the new era is to realize the great rejuvenation of the Chinese nation.

　　In the party’s political discourse, in addition to the use of political concepts in the sense of political power, politics is also used from the perspective of the connotation of the times and the basis of governance. The most typical is two sentences: development is the biggest politics; Popular support is the greatest politics. In May 2015, the General Secretary of the Supreme Leader pointed out at the Central United Front Work Conference that the opposition of people and the contrast of strength are the key to the success or failure of the cause of the party and the people, and they are the biggest politics. Development is people-centered, and only by constantly meeting the people’s growing needs for a better life can we win the masses and win the times. Of course, we are talking about all-round development, not just economic development; It is scientific development, not extensive development.

　　The 19th National Congress of the Communist Party of China clarified the party’s initial intention and mission, and actually gave politics a brand-new connotation: seeking happiness for the people of China and rejuvenation for the Chinese nation. On December 1, 2017, at the high-level dialogue between the Communist Party of China (CPC) and the world’s political parties, General Secretary of the Supreme Leader emphasized: strive for peace and development for mankind. The Communist Party of China (CPC) is not only a political party seeking happiness for the people of China, but also a political party striving for the cause of human progress, and always takes making greater contributions to mankind as its mission.

　　The Communist Party of China (CPC)’s political mission in the new era is to take charge of the "Four Greatness", adhere to and develop Socialism with Chinese characteristics in the new era, and complete the Chinese dream of building a well-off society in an all-round way, basically realizing socialist modernization, building a socialist modernization power in an all-round way and realizing the great rejuvenation of the Chinese nation step by step. It can be seen that the politics we are talking about is by no means "short politics", but by solving the problem of insufficient imbalance, we can better meet the people’s growing needs for a better life; Our struggle is by no means a "class struggle", but to overcome all kinds of difficulties and obstacles on the road of national rejuvenation with historical responsibility and fearless spirit; Now, when we talk about revolution again, we want to maintain the enterprising spirit formed in the revolutionary era and continue to promote social change and the self-construction of the ruling party.

　　2. The overall leadership of the Party is the premise and guarantee to realize the great rejuvenation of the Chinese nation.

　　In recent years, several major political conclusions have been repeatedly emphasized: the Communist Party of China (CPC) is the highest political leadership force in China; Party, government, military and civilian studies, east, west, north and south, the party is the leader of everything; The Communist Party of China (CPC)’s leadership is the most essential feature of Socialism with Chinese characteristics and the greatest advantage of Socialism with Chinese characteristics system. In this regard, we should strengthen our understanding of the following aspects:

　　First, the emphasis on the party’s overall leadership and the party leading everything now is mainly due to the fact that the party’s leadership has been blurred, weakened and marginalized for a period of time. Some people don’t deny the party’s leadership verbally, but when they get busy, they put it aside, and the organization, personnel and work are not in place or become a mere formality. Some people even use the excuse of "separation of party and government" to weaken and overhead the party’s leadership. As a result, the party’s leadership is blurred, weakened and marginalized, and it is difficult to fully implement the major decisions of the central government, and the management of cadres in party member is lax and soft, which leads to corruption, bad work style and other problems.

　　Second, to accomplish the major deployment, political mission or historical mission in the new era, we must unify our thoughts and actions and break the pattern of vested interests, otherwise we will delay the opportunity and accomplish nothing. This process is full of predictable and unpredictable risks. Without the central flag-raising orientation, subversive mistakes may occur. Therefore, emphasizing the centralized and unified leadership of the CPC Central Committee is an urgent need to meet major challenges, resist major risks, overcome major obstacles and solve major contradictions.

　　Third, the overall leadership of the party is mainly political leadership. The so-called political leadership, first of all, is the leadership in political direction, political decision-making, political discipline, etc. In order to realize this kind of leadership, we need ideological, organizational and cadre protection. From the point of view, the overall leadership of the party is not the leadership at the management and operation levels. From the perspective of role orientation, the party’s leadership should "take the overall situation and coordinate all parties"; From the function point of view, the content of the party’s leadership is to "take the direction, seek the overall situation, formulate policies and promote reform." A series of specific expositions by the Supreme Leader General Secretary also dialectically expounded the relationship between the Party and other parties. On the one hand, it highlighted the importance of the Party’s leadership, on the other hand, it also paid attention to giving full play to the enthusiasm of all parties. In other words, upholding and strengthening the party’s overall leadership is not to replace specific organizations and take care of some specific things in great detail. The view that emphasizing everything under the leadership of the party means "no distinction between party and government" and "unity of party and government" is incorrect.

　　3. The party’s leadership should be strong, and political construction must be given priority.

　　The content of the party’s political construction includes seven aspects: First, political loyalty. Ensure that the whole party obeys the central authorities, and uphold the authority of the Party Central Committee and centralized and unified leadership. The second is the political line. Adhere to the party’s basic line in the primary stage of socialism and consciously implement the major decision-making arrangements of the CPC Central Committee. The third is political discipline. Strictly abide by political discipline and rules, and maintain a high degree of consistency with the CPC Central Committee in political stance, political direction, political principles and political road. The fourth is political life. Strictly implement some norms of inner-party political life under the new situation, and create a good political ecology with a clean atmosphere. The fifth is political principle. Strict implementation of democratic centralism not only fully promotes democracy, but also is good at centralization and unification. Sixth, political value. Be loyal, honest, fair and upright, realistic, honest and clean, and prevent and correct the erosion of the principle of commodity exchange. The seventh is political responsibility. Constantly improve political awareness and political ability, so as to be loyal to the party, share worries for the party, perform due duties for the party and benefit the people.

　　Guiding the Party’s all-round construction with political construction will fully and concretely embody the above seven aspects in all fields of Party building.

　　In terms of ideological construction, highlight political ideals. Firmly believe in Marxism, the lofty ideal of communism and the common ideal of Socialism with Chinese characteristics, and persist in arming our minds and guiding our work with Socialism with Chinese characteristics Thought of the Supreme Leader in the new era. In terms of organizational construction, highlight political standards. Party member, which deviates from the requirements of political construction, can’t develop and its cadres can’t be reused. In terms of work style construction, we should highlight our political stance. Adhere to the mass line, strictly implement the eight central regulations, and establish a correct view of political achievements. In terms of discipline construction, highlight political rules. Strictly abide by the provisions of party discipline and state law and keep all kinds of bottom lines. In the fight against corruption, we should stress political inspection and supervision, and urge party organizations at all levels, party member and cadres to fulfill their political responsibilities.

　　To sum up, achieving the goal of "two hundred years" and the great rejuvenation of the Chinese nation is the most fundamental requirement of politics in the new era and the historical mission of the party; To fulfill the political mission of the new era, we must uphold and strengthen the party’s overall leadership, especially political leadership; To be strong and powerful, the Party’s leadership must implement the requirements of political construction and promote the comprehensive and strict management of the Party. This is the fundamental logic of the party’s ruling in the new era.

　　(Author: Zeng Jun, vice president and professor of Party School of Shanghai Municipal Committee of the Communist Party of China, and distinguished researcher of Socialism with Chinese characteristics Thought Research Center of Shanghai Supreme Leader in New Era)

Who would have thought that this "May Day" holiday, a warehouse discount store in a small county in Hebei Province, has also become a "conformity". The people who came to spend money pushed shopping carts full of goods and formed a spectacular "long queue".

In recent years, the retail industry is facing challenges and transformation. On the one hand, with the overall recovery of China’s macro economy, the department store retail industry is also recovering as a whole; However, on the other hand, head retail enterprises have shifted their digital focus to improving quality and efficiency inward and looking for more accurate positioning, which has intensified competition in the industry. Coupled with the continuous impact of e-commerce and the rising pressure of offline retail operating costs, the retail industry, especially the county retail system, is in need of an unprecedented profound transformation in rebuilding supply and marketing links, transforming the circulation system, reducing procurement costs, and providing intelligent services.

People who come to spend money in Tongfu Explosives Warehouse (Old Town). Photo courtesy of Tongfu Group

Some experts believe that the transformation of the retail industry requires the transformation of business entities from selling goods to guiding production and innovative lifestyles, from extensive development to focusing on quality and efficiency, from decentralized and independent competitors to integrating and coordinating new ecology, and moving towards diversified and innovative development. Take Tongfu Group as an example, it is planning to create a "China version of Sam" by innovating the warehouse discount store model, pry open the vast county consumer market, change the current situation of physical retail with "new species" and "new model" and inject new vitality.

New Species: Tongfu Explosives Warehouse "Detonates" County Consumption

On the first day of May Day, Tongfu Explosives Warehouse (Old Town) located in Hengshui, Hebei Province (hereinafter referred to as "Old Town Warehouse") once again ushered in the "peak" of consumption.

There is still more than an hour before the business hours, and the in-store broadcast has sounded the recent popular pop music. In this warehouse, which covers an area of over 2,000 square meters and is decorated in a minimalist style, all kinds of goods are neatly packed, and more than 30 shop assistants are making final preparations in their respective cargo areas.

During the "May 1" period, the price of the parallel wine area in Gucheng Cang was generally lower than that of the general supermarkets and convenience stores. People’s Network Zhu Yansheng photo

Better quality, lower price. During the "May Day" period, Gucheng Cang launched activities such as free delivery of 1,000 kilograms of edible salt and shocking prices of vegetables. From a box of 24 bottles of 550ml Tongfu mineral water in 6.9 yuan, to a box of 12 boxes of Mengniu pure milk at 36.8 yuan, and then to two bottles of 42-degree Hengshui Laobaigan in 530 yuan … Tongfu’s benefits to consumers are really visible, prompting consumers to take action.

Li Qi, head of Tongfu Group’s Tongfu Explosives Warehouse Center, introduced that Tongfu Explosives Warehouse allows consumers to really experience the benefits through the hard discount mode.

"On April 13, the first day’s operating income exceeded 800,000 yuan." Li Hui, the manager of Tongfu Explosives Warehouse (Old Town), said that during the "May 1" period, the store’s sales revenue is expected to reach a new high.

From the eve of this year’s Spring Festival, the first Tongfu explosive warehouse in Zhengding, Shijiazhuang was officially opened, and from Hengshui Old City, Bozhou, Anhui Province to Handan Daming, which was opened during the May 1 ST period, Tongfu explosive warehouses in various places all appeared the phenomenon of "opening immediately". According to the data provided by Tongfu Group, during the "May 1" period, the single-day turnover of Tongfu explosive warehouses with an area of more than 2,000 square meters was about 500,000 yuan.

"In the past year, consumers in China have undergone multiple tests. While paying attention to product performance, quality and brand reputation, consumers are also paying more and more attention to the rationality of prices. The retail industry in China has entered the’ cost-effective era’." Patrick Cua, managing director of Nielsen IQ in China, believes that for FMCG retailers and brands, it is necessary to explore opportunities in different consumer perceptions, formulate more accurate pricing and promotion strategies according to the performance and price growth trend of different categories, and seek new growth opportunities.

"We continue to bring value to consumers and stores with better products and services and lower prices." Li Qi said that Tongfu Explosives Warehouse is a sunken market warehouse discount store built by Tongfu Group based on the vast county market. By integrating the upstream and downstream supply chains such as manufacturers, distributors and terminal stores, it can improve quality and increase efficiency, and realize the goal of "when manufacturers come to your home, they will also wholesale everything".

On April 15th, Deloitte China released the report "Overview of Consumer Goods and Retail Industry 2024", which showed that the discounted operation met the current consumers’ demands for products with both quality and cost performance. This operation mode may remain in the retail format for a long time and become an effective strategy to attract and retain customers.

"For the vast number of county consumers, Tongfu Explosives Warehouse is a’ new species’." Distinguished professor Cheng Shaoshan, a well-known marketing expert and EMBA/EE of Business School of Renmin University of China, believes that the residents in first-and second-tier cities have become "normal" about warehouse discount stores, but it will still bring great impact to the people in low-tier cities.

In Cheng Shaoshan’s view, the reason why Tongfu Explosives Warehouse is "hot" is not only because it caters to consumers’ requirements for consumption upgrading, but also because it conforms to the current situation of more rational consumption of ordinary people.

In addition to being sought after by consumers, Tongfu Explosive Warehouse has also been recognized by the industrial chain. "I really don’t worry about selling goods now." Jia Xiuling, the supplier of Tongfu Explosives Warehouse (Old Town), specializes in daily chemical products. In the past, she and her employees were required to go to a supermarket and convenience store to run orders. Now, they can directly sell the goods just by putting them in the warehouse. Through the technological empowerment of Tongfu Group, the number of bulk purchases can be increased, logistics costs can be reduced and operational efficiency can be improved.

"Traditional dealers run terminal stores with high cost, low consumption and slow efficiency. But if you don’t run, this batch of goods can’t be sold. " In addition, Cheng Shaoshan said that dealers are also facing the supply pressure of upstream strong manufacturers; Hard costs such as daily expenses and labor are increasing.

The appearance of Tongfu explosive warehouse can just solve these pain points in the industry. Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, believes that the replication and promotion of Tongfu explosive warehouse model will meet the needs of users in the sinking market in the region for local high-cost goods, accelerate the circulation of goods by dealers, and improve the turnover rate and capital efficiency.

New mode: China version of Sam with grounded gas.

"It is not a subversive of the traditional market, but an enabler." Cheng Shaoshan believes that the same warehouse discount store, different from the member stores in Sam, has chosen to take root in non-first-and second-tier cities and county markets, and its products are closer to ordinary people’s kitchens for three meals a day, and the price is also "grounded".

"In the current county market, Tongfu Explosives Warehouse is a’ new species’ with competition, but no major competitors." Cheng Shaoshan said that the traditional large-scale chain retail institutions are either "ungrounded" or do not choose a high-frequency and just-needed main track in the county market, which is not explosive. The local traditional single supermarkets and couples’ wives’ shops, which lack the ability of marketing and quality control, are not rivals of Tongfu Explosion Warehouse.

This has also been affirmed by insiders. "It is very difficult for peers to copy the Tongfu explosive warehouse model." Li Hui said that the products operated by Tongfu Explosives Warehouse are daily fast-moving products and belong to low-profit products. Tongfu, with more than 30 years of experience in entity management, has the ability to "knock down" the prices of similar commodities.

In addition to the lower cost of getting goods, Li Qi said that Tongfu Group will also send a special person to give the store a transition period of three to five months, and strive to achieve "helping the horse and sending a ride".

On the eve of the Spring Festival this year, customers in Tongfu Shared Warehouse (Zhengding) lined up to settle goods. Photo courtesy of Tongfu Group

Li Hui calculated an account. At present, the biggest cost of the old city warehouse comes from rent, water, electricity and labor, of which the rent is about 300,000 yuan per year and the labor salary costs more than 100,000 yuan per month.

However, with the support from the headquarters of Tongfu Group, the local Tongfu explosive warehouse can be more confident and calm. "What we are concerned about at this stage is how to attract more passengers and cultivate more potential customers." Li Hui said that the old city warehouse will maximize its profit through post-operation, stable volume and reasonable profit space.

In 2023, the "Three-year Action Plan for County Commerce (2023-2025)" issued by the Ministry of Commerce and other nine departments proposed to "establish a rural commercial system with county as the center, towns as the focus and villages as the foundation."

"At present, Tongfu explosive warehouse is rapidly copying and landing in the country." Zu Hongkui, head of the logistics center of Tongfu Group, said that this model will greatly promote the infrastructure construction of the county-level commercial system in China and help smooth the two-way circulation of industrial products to the countryside and agricultural products to the city.

At present, compared with first-and second-tier cities, counties with more than 50% permanent residents in China still face the contradiction between the demand for consumption upgrading and the shortage of quality supply. Cheng Shaoshan said that the vast county market needs more warehouse discount stores, represented by Tongfu Explosives Warehouse, to inject new consumption vitality.

New track: the surging momentum of the physical retail industry

Since the beginning of 2024, the fiery consumer market has shown the vitality of China’s economy. Statistics from the National Bureau of Statistics show that in the first quarter, the total retail sales of social consumer goods reached 12,032.7 billion yuan, a year-on-year increase of 4.7%. "Popularity" is the most intuitive perspective to observe the vitality of consumption. The "long queue" of Tongfu Explosives Warehouse shows that on the basis of strong consumer demand, the offline retail industry is trying its best to optimize the circulation link, solve the logistics bottleneck, cultivate its own internal strength, adapt to emerging markets, and create a new hot spot of county consumption in China.

Recently, Nielsen IQ released the report "Panoramic Outlook of China Consumption in 2024", which shows that China’s economic resilience and potential coexist, and consumers’ consumption strategies and behaviors are more complicated and differentiated. In the future, China’s consumer goods market will continue to grow driven by diversification of consumer demand. How to quickly identify and meet users’ needs under the challenges of increasing cost pressure and differentiation of online and offline channels has become the key to success for brands and retailers. Zhuang Shuai said that if Tongfu Explosive Warehouse can deeply cultivate the local market and sink the market and continue to provide cost-effective goods, its model is sustainable.

Tongfu Explosives Warehouse (Bozhou) "explodes as soon as it opens". Photo courtesy of Tongfu Group

At present, there are more than 30 Tongfu explosive warehouses in China, including Hebei, Henan, Shandong and Anhui. In 2024, Tongfu Group plans to achieve 100 Tongfu explosive warehouses in the first half of the year, and the total number will reach 1,000 by the end of the year.

"We are not blindly seeking for speed, and we are fully rolled out. The headquarters is still strictly controlling." Li Qi revealed that at the 2024 Tongfu Sharing Platform Thousand Merchants Conference held in March this year, there were 600 dealers who reached an intention and signed a contract with Tongfu.

Who can cooperate with Tongfu Group?

Li Qi introduced that to join Tongfu Explosive Warehouse, it is necessary to meet the minimum threshold, including a mature team, sufficient warehouse area, parking lot and other hardware conditions, and the ability to accurately cover the surrounding consumer groups.

For qualified dealers, Tongfu Group will give them a week’s training and let them practice in Tongfu explosive warehouse at Zhengding headquarters for a period of time. On the basis of the above, Tongfu Group will also send people to stay in the store to assist it in business opening, commodity stacking and marketing of irregular large-scale activities.

"I believe that the Tongfu explosive warehouse model will rise from Tongfu Group and eventually form an industry trend." Li Qi said that the future retail industry will pursue high-efficiency and low-cost operation methods to get rid of the fancy outer layer.

　　In recent years, the competition between "involution" and "involution" has become a hot word on the Internet, which has attracted widespread attention, especially in the economic field. Then, how to treat the problem of involution, what is its influence, what are its manifestations, what are its causes and how to solve it? In this regard, we inviteProfessor Liu Zhibiao, Executive Dean of Changjiang Industrial Economic Research Institute of Nanjing University.,Professor Mao Zhenhua, Co-Director of Economic Research Institute of Renmin University of China.Answer.

　　What is the impact of "involution"

　　Moderator:On July 30th, 2024, the Political Bureau of the Communist Party of China (CPC) Central Committee Conference pointed out that it is necessary to strengthen industry self-discipline and prevent "involution" vicious competition. The Central Committee of the Communist Party of China attaches great importance to preventing "involution". Then, what impact does "involution" have on the economy?

　　Liu Zhibiao:At present, the problem of "involution" has aroused widespread concern at home and abroad, which has substantially affected the situation and direction of China’s economic operation and development. There are two completely different views on this. One view is that market competition is "involution" to a certain extent. As some scholars have pointed out, Japanese enterprises are "decisive at home and decisive abroad" and gain international competitiveness through domestic market competition. Another point of view is that China’s "involution" competition leads to more and more sales and lower prices, so it is a reason for the current economic contraction. If the latter is established, the problem will become quite serious, instead of being an ordinary market competition phenomenon.

　　Mao Zhenhua:At present, the "involution" competition of enterprises in China has caused a certain impact at home and abroad. In China, the "involution" competition leads to the decline of commodity prices, which leads to the decline of corporate profits, which in turn leads to the decline of residents’ wage income and consumption power. In addition, with the further intensification of "involution" competition, the market may gradually take price as the sole criterion to measure products, which may lead to the phenomenon of "cutting corners and counterfeiting" that once existed in the era of backward technology and cruel competition in the past. In foreign countries, the "involution" of China enterprises has caused some negative public opinions.

　　The main manifestations of "involution"

　　Moderator:Whether it is "involution" or "involution" competition, what are its manifestations in the economic field?

　　Liu Zhibiao:The problem of involution can be analyzed from three levels: micro, meso and macro. At the micro level, it involves the choice of enterprise strategy and behavior, such as occupying the market at a low price; At the meso level, we need to pay attention to the relationship between enterprises within the industry, such as the relationship between entry and exit and the degree of competition; At the macro level, it is necessary to grasp the macro situation and trend from the perspective of the balance between total supply and total demand. Here, I focus on the discussion from the perspective of the middle industry.

　　First, from the perspective of industry balance, when the production capacity or supply capacity of an industry significantly exceeds the expansion speed of its market capacity, it will lead to the shrinking market share of each enterprise. Because the growth of market capacity can’t keep up with the expansion of production capacity, it is easy to trigger a price war. This situation is particularly obvious in China’s new energy automobile industry. The increase of inventory pressure and oversupply have directly led to the outbreak of price war, which has become an important factor for the automobile industry to reflect on low profit rate or even loss.

　　The second is to understand from the income of input factors. The "involution" mainly shows that the marginal income of factor input decreases until the marginal income drops to zero or becomes negative. At this time, enterprises continue to invest because vicious competition poses a threat to survival, and whoever does not continue to invest will die first. In the past, in order to attract large projects, local governments competed to provide preferential conditions, such as "three exemptions and two reductions" and "five exemptions and five reductions", which eventually led to meager local income, and most of the income flowed to investors. Excessive discretionary investment behavior not only makes the benefits flow to the capital owners too much, but also breeds a large number of groups rushing to get the benefits of the project, which in turn leads to overcapacity.

　　The third is to analyze from the perspective of innovation. In the absence of innovation, technological development mainly depends on imitation and introduction, and the competition among enterprises often manifests itself as homogeneous competition, which eventually evolves into a vicious price war. Due to the lack of differentiation and pricing ability of homogeneous competitive products, enterprises can’t control market share through product characteristics, so they can’t raise prices, so they can only compete by lowering prices.

　　Fourth, from the perspective of industrial entry, when the entry threshold of an industry is too low, or although there are certain entry thresholds, competitors can easily break through these thresholds with the support of government forces, which will lead to a rapid influx of too many enterprises in the limited market capacity. Because these enterprises can’t achieve economies of scale, they can only compete by lowering prices in the end, thus triggering a vicious price war.

　　Fifth, from the perspective of industrial chain, China has a strong production capacity in the field of end products, forming many industry giants. However, these giants often transfer the fierce competition pressure between them to upstream suppliers through various methods and channels, which shows the growth of robbing suppliers. For example, the downstream chain owner enterprise delays payment to the upstream supplier, often for half a year or even more, or forces the supplier to reduce the price by 15%-20% quickly in the short term, otherwise it refuses to purchase its products. This practice is actually to enhance their competitiveness by squeezing upstream enterprises. In addition, all kinds of centralized purchasing behaviors for final products, such as centralized purchasing in the communication equipment market and centralized purchasing in the pharmaceutical market, often lead to the price being pushed down to a surprising level, which is very serious.

　　Mao Zhenhua:The main form of "involution" competition among enterprises in China is involution price, while price reduction mainly depends on cost reduction, which comes from salary reduction, layoffs and R&D reduction. Especially for industries with relatively low industrial and technical thresholds and products that are easy to copy, latecomers have more room for cost reduction. Starting from VC (venture capital, also translated as venture capital), the first-time enterprises finally formed an industrial structure after several rounds of investment, and invested a lot of costs in this process. However, the second-time enterprises do not need such a large-scale basic investment, and can directly use ready-made technologies and equipment, so their cost is lower and it is easier to achieve "involution".

　　The deep-seated reasons of "involution"

　　Moderator:When analyzing problems, we should look at the essence through phenomena. Then, what are the deep-seated or essential reasons for the "involution" in the economic field?

　　Liu Zhibiao:The phenomenon of "involution" can be analyzed from the classical three-dimensional structure of technology, market and system.

　　First, from the strategic concept of China enterprises. For a long time, some enterprises in China have relied on the concept of competition, which is a non-cooperative competition game rather than a win-win cooperation game. This concept is based on the thinking of zero-sum competition, that is, pushing competitors into trouble by means of price reduction, thus occupying a dominant position in the market. This kind of competitive thought not only exists in the domestic market, but also prevails in the international market, but it is often not welcomed by the enterprises and governments in the host country.

　　Second, from the perspective of industrial organization structure. China’s industrial organization mechanism has long been imperfect. Specifically, despite decades of competition, China’s enterprises have not yet formed the common oligopoly market structure in modern market economy. Oligopoly market structure is the micro-foundation of market economy in developed countries, in which several oligopolistic enterprises dominate the market and at the same time drive a large number of small and medium-sized enterprises to develop in the upstream and downstream of the industrial chain. This structure promotes the competition and cooperation between the main enterprises in the industrial chain and the upstream suppliers, and forms the governance mechanism, which forms the foundation of modern market economy. In the course of industrialization of about 200 years, western countries have experienced eight large-scale waves of mergers and acquisitions, which have shaped the current market structure. In contrast, China has not experienced a similar wave of mergers and acquisitions. Therefore, the imperfection of China’s industrial organization structure and the consequent "involution" phenomenon conform to the basic laws and viewpoints revealed by industrial economics to some extent.

　　Third, from the way the government participates in competition. The way the government participates in the competition leads to or aggravates the defect of industrial organization structure to a certain extent. One of the characteristics of China’s economic system transition is that the central government devolves power to local governments instead of delegating all power to enterprises. After becoming the main body of development, local governments have a variety of means to participate in market competition. Among them, providing various preferential policies is a common way of competition for local governments. In recent years, a new phenomenon is that local governments participate in competition by setting up various funds. Local governments participate in market competition by means of fund investment, which has potential risks because it may aggravate the involution competition in the market.

　　Fourth, from the perspective of institutional mechanisms. The administrative regional pattern formed since the reform and opening up has hindered the formation of a unified national market. The administrative regional pattern makes the competition mainly between the block economies. In these massive economies, the coordination mechanism is often a mixture of administrative orders and market coordination, while the external coordination mechanism mainly depends on the administrative relationship between regions. This state has hindered the free flow of factors and fair competition to some extent. The recently issued "Guidelines for National Unified Big Market Standards" aims to solve this problem and standardize the behavior of local governments. However, because the economic, administrative and judicial functions of local governments have not been completely straightened out, the guide can play a certain role, but it cannot completely solve the problem. To solve this problem fundamentally, we need to further adhere to the market-oriented reform, clarify the basic functions of the government and the market, and then establish the division of responsibilities and the relationship between the central and local governments.

　　Mao Zhenhua:From the perspective of price, I think that the formation of "involution" competition of enterprises comes from the problem of supply and demand. Long-term oversupply will lead to overcapacity and promote enterprise involution. From the demand side, the demand has shrunk in recent years, especially the lack of domestic demand and the weakening of terminal consumption. From the supply side, a long-term supply side force will form a large amount of production capacity, leading to oversupply.

　　The convergence of industrial policies of local governments will further aggravate overcapacity, which is an important reason for the "involution" competition of enterprises. In order to attract investment, local governments have launched various industrial funds, and the convergent industrial policies have further intensified the homogenization competition. Local governments promote the development of an industry at the same time, which will soon turn an industry from a "window" into a "risk exposure". We should reflect on the advantages and disadvantages of the government’s personal investment and industrial layout, whether it is shifting from advantages exceeding disadvantages to disadvantages exceeding advantages, whether it will lead to overcapacity and further promote the "involution" competition of enterprises.

　　Ways to get rid of the problem of "involution"

　　Moderator:How to overcome the negative effects of involution? How to prevent "involution" fundamentally?

　　Liu Zhibiao:First, to solve the problem fundamentally, we must strengthen the construction of enterprise autonomy and decision-making independence, and implement hard budget constraints including economic responsibility and bankruptcy. Without the hard budget constraint mechanism, enterprises will not use resources effectively, nor will they make responsible management and strategic decisions. Such enterprises cannot compete effectively in the market.

　　The second is to carry out the system reform in which local governments participate in competition. In this system, it is necessary to stimulate the enthusiasm of local governments and prevent the occurrence of unfair competition, which constitutes a pair of contradictory relations and is a highly complex worldwide problem. It may be necessary to solve it slowly from the aspects of power restriction and separation of functions according to the requirements of rule of law.

　　The third is to reconstruct the industrial organization structure of China. National policies should be devoted to promoting the formation of monopolistic competition market structure, and promote the merger, acquisition, bankruptcy and reorganization of enterprises through market competition mechanism.

　　Fourth, the national macro-level policy efforts. Here, I will focus on some suggestions for the transformation of industrial policy:

　　First, we should support the transfer of industrial policies to the front end, rather than the back-end capacity replication. In the past, industrial policies often supported the replication and expansion of production capacity. This is correct in the era of shortage economy. But now it not only intensifies market competition and overcapacity, but also promotes the phenomenon of "involution". Industrial policy should now pay more attention to front-end research and development and innovation. Although the intensification of front-end competition may lead to repeated investment of certain resources, which seems to be a waste, it is actually a necessary cost and price for technological progress. Once an enterprise obtains results through research and development and applies for a patent, other enterprises will naturally quit. Therefore, industrial policies should shift from supporting capacity expansion to supporting scientific and technological innovation, especially front-end innovation activities.

　　Second, the subsidy mode of industrial policy needs directional adjustment. Previous policies tended to subsidize producers, which easily led to overcapacity, rent-seeking and corruption. We should turn to subsidizing consumers, users and customers to expand market demand. In this way, the problem of "involution" can be effectively alleviated.

　　Third, the implementation method of industrial policy needs to be transformed. In the past, the main practice was to select losers and winners, and selectively support those enterprises that were considered competitive without competition in advance, ignoring the development needs of other enterprises. In addition to being unfair, this practice will also contribute to overcapacity. Industrial policy should support the creation of a favorable and fair competition environment for innovation, rather than simply supporting specific enterprises.

　　Fourth, the main body of industrial policy implementation should move up. It should be combined with the reform of local government functions to transform the local leading industrial policy into the central leading industrial policy. This is the basic premise of building a unified big market in China. If the industrial policy function continues to be dominated by local governments, it will be difficult to form a unified big market in China. Because the market will be divided into block structures by local government’s industrial competition means. The implementation of the central leading industrial policy does not mean returning to the planned economy, but reducing the number of industrial policies, so that the central government can concentrate resources to support several key industries instead of intervening in all industries. In most developed countries, it is usually the function of the central government to formulate industrial policies, and local governments rarely get involved. The special situation in China is that most industrial policies are dominated by local governments, which participate in market competition not for the purpose of realizing public interests, which leads to market segmentation. Therefore, some industries that are vital to the country, especially industrial policies that are suitable for developing new quality productive forces, should be uniformly implemented at the central level, which is conducive to achieving the consistency of rules, policies and coordination of actions.

　　Mao Zhenhua:How to solve the negative effects brought by the "involution" competition of China enterprises will affect the operation of international trade and the economic trend of China. The problem of "involution" competition among enterprises in China is very complicated, and it is ultimately necessary to solve the problem in economic development. Under the background that western capitalist countries have introduced policies to support enterprises’ export, China is no exception. Before new international trade advantages are formed, we should maintain our existing advantages and not simply and rudely raise product prices to eliminate "involution", which is neither reasonable nor feasible.

　　At the same time, the government should introduce policies to protect the competitive pattern of China’s export industry under the current price advantage. However, under the premise of maintaining the existing advantages, we should actively deal with new problems. In the process of governance, we should give play to the role of market mechanism, form consistent expectations from recognizing policies to behaviors, and actively deal with the negative effects brought by "involution" competition. First, we should pay attention to the chaos of low-price competition among enterprises, and introduce relevant policies to promote fair competition and restrict enterprises from unfair competition in a way below cost. The second is to properly handle the relationship between "promising government" and "effective market" to prevent improper government intervention from aggravating overcapacity. Third, chain owners should actively take measures to comprehensively sort out the problems existing in product pricing, wages and benefits, labor assessment, etc., seriously think about it, take the initiative to take improvement measures, respond to social concerns, and make contributions to changing the "involution" competition. Finally, scientific and technological innovation should lead the development of new quality productive forces and accelerate the formation of new competitive advantages. Of course, this process is inseparable from the support of the academic community. The "involution" competition among enterprises in China has posed a very important question not only to China, but also to global economists, that is, how to reshape the world trade theory in theory. With the improvement of China’s economic development level, the basic theory of world trade and competition may change. The practice of simply relying on cost theory to build a theoretical framework needs to be adjusted in the current situation, and it is suggested to strengthen theoretical research in this field in the future. (Moderator: Li Pan)

　　Xinhua News Agency, Beijing, April 14 th Question: Why can you cheat billions of dollars by making a phone call? — — Taiwan Province telecom fraud suspects reveal fraud shady.

　　Xinhua news agency reporter

　　Recently, 77 suspects of telecom fraud were repatriated to Chinese mainland, including 32 from mainland China and 45 from Taiwan Province. This is the first time that China has brought back a telecom fraud suspect from Africa on a large scale.

　　Why are criminal dens located in distant Africa? How do criminal suspects commit telecom fraud on Chinese mainland people "from a distance"? How do a large number of fraud gangs divide their work and cooperate? What kind of fraud tricks are behind their repeated success and taking away hundreds of millions of stolen money?

　　On the 14th, with the approval of the case-handling organ, the reporter interviewed the police handling the case and some telecom fraud suspects in custody.

　　Deceptions are interlocking, and the spoils are divided according to the "basic salary" and "commission"

　　The suspect, Jane, born in 1992, is from Taoyuan, Taiwan Province, and came to Kenya in October 2014 through a friend, Ayao.

　　"Yao arranged for me to go to Jimmy’s place and let me pretend to be a policeman and call to cheat money." Jane confessed that the whole gang lived in the villa rented by Jimmy (one of the suspects, responsible for outreach, translation, transportation, etc.). According to the different division of labor, the "first line" lives on the first floor, and the "second line" and "third line" live on the second floor; The boss "Pangcai" lives alone in a room on the first floor. Jane is a "second line".

　　The so-called "first line", "second line" and "third line", Jane further introduced: "first line" about 10 people, in the first floor living room to answer the "customer" (victim) phone. "They are all landlines, and there are about a dozen telephones, one for each person; In addition, there is a person who specializes in operating computers. "

　　The "second-line" people are all on the second floor, and there are also 10 people in four or five rooms, each with two landlines. There are fewer people on the "third line", and they are also on the second floor, making phone calls in one room.

　　So, how did this gang commit fraud?

　　According to the police investigating the case, first of all, the person operating the computer in the "first line" sent a group call service to the mainland according to the telephone number given by the boss. "The mainland people received a voice packet saying that there was something wrong with your medical insurance card. Please press 9 for more information."

　　If the victims press the "9" key, the phone will be connected to the "front line" person. “‘ First line ’ Some people pretend to be medical insurance personnel, take customers’ identity information in the name of inquiry, and tell customers that their information has been stolen. ‘ First line ’ They all speak according to the contents of the speech list, and then transfer the call to us ‘ Second line ’ At the same time, people sent a note with the customer’s name and ID number on it. " Jane confessed.

　　"Our second-line people pretend to be police officers of Chaoyang Branch of Beijing Public Security Bureau or Criminal Investigation Team of Shunyi Branch, and accept the customer’s report. After the customer has finished speaking, we will ask them to wait and call them back later." Jane confessed, "After hanging up, we used the landline to call the customer back, pretending to be a police officer of the criminal investigation team, and then telling the customer according to the contents of the call sheet that their identity information was stolen and suspected of money laundering, and asked the customer to provide name, family situation, occupation, income and other information, as well as bank accounts they often use."

　　In order to convince the victims, fraud gangs will also play pre-recorded background sounds when making phone calls, such as hospitals, public security bureaus and other scenes; At the same time, we also use the number change software, which can display the incoming call as the phone number of any public security organ in mainland China.

　　"We asked the customer to dial 114 to check whether the number displayed on the mobile phone is the phone number of the Public Security Bureau. We will give him a minute to check the time, and then dial it again. " Jane said that they will further ask the victim’s account balance. If it is small, the second line will directly trick the other party into transferring money and remittance; If the amount is large, the call will be transferred to the "third line", and the person from the "third line" will pretend to be the head of the financial crime department and continue to talk to the victim about remittance and transfer.

　　One of the "three lines", the suspect Xu confessed, "We know which bank the customer uses to transfer money when talking to the customer, so we will ask the boss for the account number of which bank. The other party is eager to prove innocence to us, and we will provide one ‘ Security account number ’ Let the other party transfer the money to this account, which will be inquired by our financial crime department and transferred by ATM according to our instructions on the phone. "

　　According to the police investigating the case, the "third line" has the highest technical content in the whole criminal chain, and has clever deception, which can cope with various problems and doubts of the victims. Sometimes, for a "big order", the boss will even invite an "excellent" "third line" to play, with the ultimate goal of tricking the victim into remitting money into a designated bank account.

　　How do criminal suspects divide the stolen goods?

　　According to reports, there is a whiteboard in the living room on the first and second floors. Who negotiated the list and which account received the money will be recorded on the whiteboard. The boss pays the bill once a month, and the "first line" takes "basic salary+commission", with a basic salary of 5,000 yuan, and the commission is generally 3% of the amount of each fraud; "Second-line" only has "commission", which is 4%— 5%； The "third line" with the highest "technology" content can get 8%.

　　The backbone of gang bosses with higher degree of specialization are all from Taiwan Province.

　　According to the police investigating the case, in many telecom fraud gangs, the bosses and backbones are all from Taiwan Province, as are the fraud gangs where Jane and Xu are located — — The bosses "Pangcai", "Second Line" and "Third Line" are all from Taiwan Province, and the script "Speech Script" is also written by Taiwan Province people. The "first line" is dominated by mainlanders with little fraud experience.

　　When recruiting personnel, the boss "Fat Wealth" especially pays attention to those who have fraud experience and criminal record, and tries every means to attract them. Xu is one of them. As soon as he arrived in Kenya, he was entrusted with the "third-line" responsibility and pretended to be the "Chief of the Financial Crimes Section".

　　"I am familiar with the process of telecom fraud, so Pangcai found me and asked me to join him ‘ Start work ’ 。” Xu, a 37-year-old native of Taichung, Taiwan Province, was sentenced to 7 months’ imprisonment by Taichung City Court in 2010 for fraud, and was released after serving his sentence. At the end of July 2014, he was recruited to Kenya by "Pangcai" and was arrested and detained by local law enforcement agencies in November of that year on suspicion of committing crimes. On April 9 this year, Xu was sent back to Chinese mainland.

　　Jane also has a criminal record. She fought and took drugs since she was a child. She dropped out of high school and was unemployed. She was dealt with by the Taiwan Province police for taking K powder, claiming that she was still wanted by the Taiwan Province police. According to his confession, as soon as he arrived in Kenya, the boss sent him a "speech sheet" to learn from it and recite it over and over again, so that he could answer questions when committing fraud.

　　Within the gang, there is not only a clear division of labor, but also very strict management. In order to ensure that all members concentrate on investment and improve the success rate of fraud, there are still strict boundaries between the "lines". “‘ First line ’ ‘ Second line ’ When talking about the list, no one else can be near; ‘ Third line ’ They are all in the same house, and no one can go in except the boss. " Jane said.

　　According to another introduction, the boss’s "fat money" generally pays a salary in advance and promises a high salary in order to win people’s confidence. For example, "Pangcai" once lent more than NT$ 100,000 to Xu by way of advance, which made Xu, who had a difficult family, grateful and worked hard for him. However, after the crime of fraud is successful, "Fat Wealth" always refuses to pay wages for various reasons.

　　According to the police investigating the case, Taiwan Province Telecom’s fraud started earlier, and the main target of fraud was the people of Taiwan Province. With Taiwan Province stepping up anti-fraud propaganda, there is no market for fraud. Around 2002, telecom fraud gangs, which were difficult to establish themselves in Taiwan Province, set their sights on the mainland and began to move to Fujian and other places, mainly to defraud the mainland people.

　　Zhang Jun, deputy director of the Criminal Investigation Bureau of the Ministry of Public Security, said that another reason why Taiwan Province Telecom’s fraud crimes are developed is that they can constantly update their scripts, among which the scripts of the Public Prosecution Law are "classic" and have been tried and tested on the grounds that victims’ accounts are involved in criminal cases.

　　"Some parts of the front line may change, such as pretending to be medical insurance, post office, express delivery, gehuayouxian, etc., but then they will still use the people’s awe and trust in the public security law to pretend to be the staff of the public security organs and complete the fraud process." Zhang Jun said. One of the latest fraud methods is to open a "cottage website" of Chinese mainland judicial organs, make a "wanted order" based on the identity information and photos provided by the victims, hang it online, and send the link to the victims; If the victim is a middle-aged and elderly person who can’t surf the Internet, he will send a "wanted order" by fax, so that the victim can believe it and fall into a trap when he is surprised and afraid.

　　In April 2009, the two sides signed the Agreement on Combating Crimes and Mutual Legal Assistance across the Taiwan Strait, which intensified the joint crackdown on telecom fraud. Fraud gangs then moved to Southeast Asia, Africa, Oceania and other countries, and some gangs also moved to the Russian Far East to implement cross-border telecom fraud.

　　"The dens of fraud are getting farther and farther away. Like this Kenyan case, they mainly consider staying away from Chinese mainland, making it more difficult to arrest, so as to escape the blow. But no matter how far the suspect runs, we have the confidence and ability to arrest him. " Zhang Jun said.

　　"Things have developed to this day, all of which are my own self-inflicted, all of which are my retribution, but the deceived mainland people must be more sad. I say sorry to these mainland people, and I am willing to accept legal sanctions. I will definitely turn over a new leaf in the future, and I will never do bad things again. If I have the opportunity, I will definitely engage in legitimate work. " Xu deeply repented.

　　Jane also expressed regret: "I knew from the beginning that I was going to defraud the mainland people. Fraud is a wrong act, an unnatural thing, and there will be karma. I want to sincerely apologize to the people who have been deceived in the mainland. I am willing to accept legal sanctions and hope to be treated leniently. "

　　Every year, 10 billion yuan is defrauded, and Taiwan’ s crackdown needs to be intensified.

　　According to the relevant person in charge of the Ministry of Public Security, telecom fraud crimes have intensified in recent years, and the number of cases has increased by 20% to 30% annually. Among them, the telecom fraud criminal group headed by Taiwan Province criminal suspects set up fraud dens in Southeast Asia, Africa, Oceania and other countries, recruited telephone operators, and pretended to be the mainland public security organs to madly commit telecom fraud to the mainland people. The harm was very serious and the people hated it. According to statistics, the losses of fraud cases committed by telecom fraud criminal gangs with Taiwan Province as the backbone account for more than 50% of the total losses of telecom fraud cases, and the major cases of more than 10 million yuan are basically committed by Taiwan Province telecom fraud group. For example, on December 29th, 2015, Yang, the cashier of the Construction Bureau of Duyun Economic Development Zone in Guizhou, was cheated by Taiwan Province Telecom Fraud Group for 117 million yuan.

　　In view of the grim situation of telecom fraud related to Chinese mainland, the public security organs in have always maintained a high-pressure and severe crackdown situation, and have continued to organize crackdown operations, and joined hands with the Taiwan Province police to carry out police law enforcement cooperation. Since 2011, the police on both sides of the Taiwan Straits have joined hands to go to Indonesia, Cambodia, the Philippines and other countries, and organized several transnational and cross-strait simultaneous arrests, arresting more than 7,700 telecom fraud suspects, including more than 4,600 suspects from Taiwan Province.

　　However, due to the fact that Taiwan Province’s laws impose a lighter sentence on telecom fraud crimes, and the standards of evidence identification are quite different from those in mainland China, many criminal suspects can’t be convicted or have a lighter sentence for a felony, and less than 10% of them are sentenced. In August 2013, 21 gang leaders, including suspects Lin Minghao, Liang Jiabi and Wu Hanjie, were captured by Beijing public security organs in Cambodia and handed over to Taiwan Province police. In 2015, they appeared in Indonesia, Cambodia, Australia and other countries to open fraud dens, recruit soldiers and continue to commit crimes.

　　Statistics show that every year, more than 10 billion yuan of telecom fraud money is swept from the mainland to Taiwan Province by swindlers. Although the mainland public security organs have taken various measures to recover it, they have only recovered 207,000 yuan from Taiwan Province.

　　Due to Taiwan’s ineffective crackdown and the difficulty in recovering the stolen money, the arrogance and criminal desire of swindlers have been encouraged, which has led to repeated attacks by telecom fraud criminal gangs with Taiwan Province as the backbone, hiding overseas and committing crimes crazily, causing huge economic losses to mainland people. Criminals in Taiwan Province used the money they cheated to buy luxury houses and luxury cars, went to casinos to gamble and splurge, and publicly clamored that they would "cheat all the mainland’s money". According to the data from Taiwan Province, there are nearly 100,000 people in Taiwan Province who make a living by committing telecommunication fraud.

　　"The mainland has handed over a large number of Taiwan Province telecom fraud suspects to Taiwan Province, but the Taiwan side did not severely punish them, but sentenced them lightly or even acquitted them, which led to the suspects’ aggravation and became recidivists and recidivists. The amount of fraud was huge, and mainland residents and enterprises suffered serious losses. If this momentum cannot be stopped in time, the consequences will be unimaginable. " Liu Huawen, assistant to the director of the Institute of International Law of the Chinese Academy of Social Sciences, believes that cross-strait cooperation to combat telecom fraud needs to be strengthened, and hopes that Taiwan Province will attach great importance to it.

　　"Taiwan Province has not formulated criminal law provisions specifically for telecom fraud, but treats telecom fraud as a general fraud, with a low sentence, insufficient economic sanctions, lax legislation and too light punishment." Fan Chongyi, a professor at the Institute of Litigation Law of China University of Political Science and Law, believes that "Taiwan Province should intensify the crackdown on telecom fraud through legislation, and improve the determination of charges, methods of crackdown, and punishment rules so that criminals can get the punishment they deserve."