no matter in attitude, concept, psychology, policy, institution, and strategy, to take the lead in the post-USA period. According to Professor Zhu, however, what we had done was far from enough.
During the second session of the forum, Professor Li Daokui discussed together with the Chinese guests about the domestic economic situation in 2012. Professor Sun Liping from the Department of Sociology at Tsinghua University warned aboutthe transition trap. He argued that in the middle of such an unprecedented mess, lots of possibilities emerged. Therefore, the transition trap meant that this transition moment was formulated during the reforming process. Meanwhile it had kept in hand most of the social resource, and now it required to stop progressing. We had seen it as nothing but the transition moment, but now it might form a relatively stable system. The transition trap is an exclusive phenomenon in China. Xu Shanda, vice minister of State Administration of Taxation, called for a new budget system for the taxation strategy and policy. After 30 years’ of the development of market economy, what was in desperate need was a new budget system that could cover the governmental revenue and could accurately compute the debt and income. Wangjian, deputy secretary of China Macroeconomics Association, proposed that the current state of income distribution should be immediately adjusted. When there appeared the micro efficiency brought by our market economy system, it also gave birth to the unbalance in the macro level distribution which we had not built up through a social security system or a payment-transfer system. And for finance the payment-transfer system was probably more important. Our taxation burden was almost the same as that of developed countries, but our payment-transfer system was a complete failure. we have the payment-transfer system, but it mainly took place across different regions and among different groups of people, and the greatest gap is the lack of the payment-transfer system between urban and rural areas.
On the time trend of Chinese economy in the near future, three experts of this field shared their own opinions. Peng Wensheng, chief economist of China International Capital Corporation Limited, believed that in the medium and long term, the economic growth rate depended on the economic supplying capacity. The financial and monetary policies can stimulate the demand in the short term, which would translate to high inflation if it exceeded the supplying capability. It was not what we called sustainability. Therefore, looking from the medium and long terms, the economy depended on supply for the next 5 to 10 years. In terms of supply, our basic belief was that Chinese economy had now entered the phase of slower growth with declining growth rate.