Introduction
1 Raising Questions
1.1 Theoretical Significance
“Conservation-oriented economy” is still a brand new concept (no relatively authoritative concept has been formed yet) in the current economics theory circle. Our understanding of “conservation-oriented economy” is theoretically abstract and based on the concept of “conservation-oriented society”.
Currently, the Party Central Committee and the State Council put forward the establishment of conservation-oriented society, which sets a new goal of China's economic development. The authoritative concept of the “conservation-oriented society” is claimed as follows:
In the production, circulation, consumption and other field, through legal, economic, administrative and other comprehensive measures, people improve the efficiency of resource utilization, obtain maximal economic and social benefits by consuming minimal resources, and ensure the sustainable economic and social development. The construction of a resource-conserving society is to pursue less resource consumption, less environmental pollution, and greater economic and social benefits, and to achieve sustainable development.
The author hopes that this study can make some contributions to the early perfection of the theoretical system of China's conservation-oriented economy, and to the proposition of guiding countermeasures which can make breakthroughs in the current issue of resource constraints.
1.2 Practical Significance
China is a country with a large population and a relative paucity of per-capita resource. Based on the per-capita possession of resource, with a per-capita lack of resource, China's shortage of resources would still be a long-term issue in spite of a large amount of total resources. In accordance with the exploration, development and utilization of the resource since the founding of the People's Republic of China (PRC) in 1949, China is developing its economy on a way of high resource consumption and extensive management, along with the phenomenon of high input, low output and serious waste of resources.
At present, China's economy is in its multiple transitions, with industrialization, informatization, urbanization, marketization and internationalization being ongoing simultaneously, showing the increasing restraint of resource to the economic development. This can be illustrated by the following main points:
Firstly, resource utilization rate is obviously low, and economic development is in an extensive mode. According to the energy efficiency of industry, energy consumption of unit product of the eight major energy-consuming industries, on average, is 40% higher than the counterpart of the world's advanced level, while the energy consumption of these 8 major industrial departments account for 73% of the industrial GNP energy consumption; the reusing rate of industrial water is 15%~25% lower than that of the developed countries; the gross recovery rate of mineral resources is about 30%, which is 20% lower compared with the foreign advanced level. This indicates that the issues of energy-saving and high energy-consuming in buildings are both extremely severe. China's energy-saving residential building just covers 3.5% of the urban residential building throughout the country, but energy consumption of heating per unit area is 2~3 times as much as the counterpart of developed countries whose climates are similar to China.
Secondly, the resource demand is rapidly increasing in the recent years, and the contradiction of resource constraint is continuously enlarging. From 2002 to now, our growth rate of resource consumption is higher than that of the GNP. Elastic coefficient of energy consumption was lower than 0.5 during the period from1980 to 2000 while it is higher than 1 now. Elastic coefficient of power consumption has been higher than 1 since 2000, indicating that the growth rate of the power consumption is higher than that of the GNP.
The contradiction of resource constraint is continuously enlarging and the amount of resources per capita is lower than the world average. China's total amount of resources ranks the third in the world while the amount of resources per capita just takes up half of the world average, ranking only 53rd.
Thirdly, the environment is severely polluted as China has not yet got rid of the pattern of “treatment after pollution”. The environmental pollution which is relatively severe has caused high economic and environmental cost, and led to an obvious hazard to public health.
Some scholars from domestic and abroad assert that the high growth rate of China's economy depends on enormous capital investment and substantial consumption, along with its low efficiency of investment and production. China's economy owns a high rise in the GNP at the extremely tremendous cost of environment and resource.
Therefore, in our opinion, the study on conservation-oriented economy has its important practical significance in guiding China to dispose of the resource shortage, correctly choose a modernization road, and take the civilized path of sustainable development.
2 Review of the Studies at Home and Abroad
2.1 Status and Trend of the Studies Abroad
There is no official definition of conservation-oriented economy in foreign countries. However, theoretical perspectives of conservation-oriented economy are included in many theories on economic growth. Having gone through “the early thoughts of economic growth—the generation of the modern economic growth theory (including every kind of economic growth mode) —the endogenous growth theory—the economic development theory—the sustainable development theory”, now the western economic growth theory puts forward the theoretical perspectives of conservation-oriented economy. The following parts are the brief descriptions of some important points in the early thoughts of economic growth and the sustainable development theory.
2.1.1 The Detailed Elaboration on Conservation from Marx and Adam Smith
In the book of The Wealth of Nations, for many times, Smith mentioned that the Homo economics took wealth accumulation and profit as the aim of their lives: “But the principle which prompts to save is the desire of bettering our condition, a desire which, though generally calm and dispassionate, comes with us from the womb, and never leaves us till we go into the grave......Though the principle of expense, therefore, prevails in almost all men upon some occasions, and in some men upon almost all occasions, yet in the greater part of men, taking the whole course of their life at an average, the principle of frugality seems not only to predominate, but to predominate very greatly.” Analysis of Smith indicates that people save to pursue better condition and higher social status, which will last long till the end of their lives. Viewing life from this angle, it can be argued that “people die for money”.
Marx was a thinker who held the most profound analysis on the essence of conservation. The capitalist reproduction on an extended scale which is “accumulation for accumulation's sake” was depicted by Mars emphatically: “Accumulate, accumulate! That is Moses and the prophets! Industry furnishes the material which saves accumulates. Therefore, save, save! Reconvert the greatest possible portion of surplus-value, or surplus-product into capital! Accumulation for accumulation's sake, production for production's sake.” In Marx's opinion, this kind of conservation that is“accumulation for accumulation's sake” depends on two factors: the pressure under capitalist society's competition and the inner impulse of the profit-push of the capitalist class. Because Marx maintains that capitalist class's personal consumption was not excluded by their act which is “accumulation for accumulation's sake”; on the contrary, accumulation can promote the consumption of the capitalist class.
2.1.2 Keynes' General Theory
Keynes, who was the founder of modern economics, moved the core of economic analysis from the classical school (neo-classical)'s supplement to demand. In Keynes' opinion, this kind of capitalist spirit (conservation) came from “the psychology of capitalist society”, with three other human's basic mental disposition listed in his book of the General Theory. He argues, “European countries form into an organization both in society and economy to ensure the largest quantity of capital accumulation. In the meantime of the continuous improvement of the public daily condition, such social structure distributes the main part of the increase in income to the class who is most unlikely to consume, to control.” The psychology of capitalist society that Keynes described provided a good explanation to Smith's principle of conservation. He pointed out the dual-purpose of the capitalist class's accumulation in an extremely clear way: accumulating for accumulation, and consuming for accumulation; consumption is just an attached product of accumulation.
2.1.3 Modern Thought of the Sustainable Development
The modern thought of the sustainable development derives from the gradual public cognition and fervent concern of the environmental issue. The fact that the environment and resources on which human beings rely on existence and development has become more and more severely destructive forms to the background of production. After 1960s and 1970s, with the appearance and aggravation of pollution nuisance and the compact of energy crisis, a discussion on “the Limits to Growth” arose almost all around the world. This development theory holds the point that those who cut the economy, society and environment apart and seek for their own economy even though it is partial and temporary, will bring about others' overall and permanent diseconomy, even disasters.
All in all, the sustainable development theory consists of two parts: the first part is the introspection and negation of the traditional development mode and the second part comes to the rational design of the normative mode of sustainable development. In terms of the rational design, the sustainable development mainly shows that: industry should achieve high yield and low consumption; energy should be moderately utilized; food's long-term supply should be ensured, and the relative balance between population and resources should be maintained.
2.1.4 Study on Circulating Economy
The development of circulating economy and the establishment of circular resource society are both taken as the important realization form of sustainable development strategy by Europe, USA and Japan since 1990s. The so-called circulating economy accurately follows the ecological law, reasonably utilizes the natural resources and realizes the ecologicalization of economic activities. With its integration of clean production and waste utilization, circulating economy is a kind of ecological economy in essence. Putting production and consumption into organic coordination and optimizing the long-term effectiveness of products, instead of quantity production, mass consumption and heavy waste of inefficient product, forms the basic strategy of circulating economy. With its marked features of low investment and high utilization in natural resources and low emission of the waste, circulating economy is fundamentally helpful to the contradiction between environment and economy.
2.2 Status and Trend of Domestic Studies
2.2.1 Conservation in Chinese Culture
Advocacy of conservation (in capital) is one of the major features in Chinese traditional culture. Confucius claims, “Extravagance leads to insubordination, and parsimony to meanness. It is better to be mean than to be insubordinate.”(From Confucian Analects).He also argues, “To rule a country of a thousand chariots, there must be reverent attention to business, and sincerity; economy in expenditure, and love for men; and the employment of the people at the proper seasons.” (From Confucian Analects).Mo-tse treated conservation as the magic instrument of governing the country and people with his expression that “people are rich and the country is strong”, “saving leads to prosperity and dissipating leads to decaying.”(From Mo-tse). Xuncius also regarded conservation as a kind of natural law which complied with the world's pattern, and a kind of measure that could compete with the nature, assuming that “if we can enhance agricultural production and economize expenses, even the God cannot stop us from being rich…….But if you spend extravagantly when you are needy, you will end up impoverished even with the God's help.” (From Xuncius).
Confucianism encourages people to save so it guides people to deposit money to make more money in some degree; moreover, with the awareness of “money means everything”, the Chinese people are driven by accumulation, suggesting that saving will definitely bring about a long-term rapid growth in economy. Demonstrations are the economic take-off in Singapore, Hong Kong, Taiwan, and Mainland China.
2.2.2 Two Viewpoints on Sustainable Development to Solve the Resource Restraint
At present, the concept of conservation in conservation-oriented economy has already been far outside the range of capitalist conservation mentioned above. For a country with such a huge population, now the concept of the conservation is mainly reflected on resource restraint.
Currently, the emphasis of solving China's resource restraint is concentrated on the sustainable theory and other relevant theory of the domestic economic circles. On the basis of the reality of China, these studies can be divided into two viewpoints:
One of the viewpoints is the transition of economic growth. The traditional extensive growth mode in China is on a way of non-sustainable development. High investment and high speed seriously lead to a structural imbalance between total social supply and total social demand, causing mass overstock of some products and severe waste of the resource; people's eagerness for investment continuously expands. People remove the necessary environmental investment without considering the reasonable allocation of resource, seriously weakening the effect of the mechanism of the industrial structure adjustment, and they neglect the construction of basic industry and infrastructure including environmental protection; what they pursue is the growth of production without considering such issues as resource conservation, ecological destruction and the existence and development of next generations.
The factors of resource's publicity, externality, uncertainty and the like, which make the necessary basic conditions for market mechanism to allocate resource reasonably, are difficult to meet the standard, generating a fact that market mechanism loses its regulatory function in some economic activities. Thus, the government is required to be a guide to strengthen macro indirect control on the premise of the full function of the basic effect in market mechanism. These studies cover the following domains:
How to stick to the scientific and reasonable principle in resource development with a degree falling inside the bearing capacity;
How to establish circulating economy that boasts low consumption and high effectiveness with the implementation of a strategy which takes resource conservation as its core;
How to correctly choose a developing direction of technology and keep the technology with its advancement;
How to internalize the external cost of production and consumption and force those who pollute and destroy the environment to pay for what they have done.
The other study is to establish a new system of resource-conserving national economy. The essential problem of sustainable development is conservative utilization in resource. Resource is the basic substantial requirement for human society to exist and develop while disposable resources are always limited. Thus, resource storage is really a kind of valuable wealth. Hence, the main studies on establishing a new system of resource-conserving national economy are as follows:
How to establish an intensive agricultural production system which is taking conservation of land and water as its center to promote ecological benign cycle;
How to establish a clean production-oriented industrial production system which is taking conservation of energy and material as its center by emphasizing overall effectiveness;
How to establish an effective and conservative integrated transportation system which is taking conservation of transportation capacity as its center;
How to raise the education level: development will eventually boil down to the individual development and the improvement of education;
How to establish an environmental protection system which is taking optimizing environmental quality as its center.
2.2.3 The Official Proposal of Conservation-oriented Society
During the High-Level Forum on China's Economic Development—International Symposium on Constructing Conservation-oriented Economy in the June of 2005, China clearly proposed to establish conservative-oriented society, making it as a long-term important strategic task of economic and social development. Premier Wen Jiabao, Vice-premier Zeng Peiyan, director of National Development and Reform Commission Ma Kai, director of Development Research Centre of the State Council Wang Mengkui, attended the forum and delivered their speech on establishing a conservation-oriented society.
The important decision of establishing conservation-oriented society made by the Chinese Government would greatly promote the deep development of the theoretical study on China's conservation-oriented economy.
3 Study Goal, Contents and Key Problems in Question
3.1 Study Goal
The study goal of this book is to initiate a basic theoretical framework of conservation-oriented economy, and the approach of implementing China's conservation-oriented economy is also systematically studied.
3.2 Study Method
On the guidance of Marxist economic theory, by the application of market economic theory, industrial economics and the like, the book will initially establish systematic basic concept and basic contents' framework of the study pertinent to conservation-oriented economy. Then, the author will emphatically analyze the reality issue regarding the realizing approach of China's conservation-oriented economy. In theory, it would be a study with pioneering significance.
3.3 Main Study Content
The book is divided into two parts. Part 1 studies the general theory of conservation-oriented economy while Part 2 deals with the approaches to realizing the conservation-oriented economy.
Part 1 (from Chapter One to Chapter Four) mainly studies the general theory of conservation-oriented economy.
Chapter One summarizes the study of the development on conservation-oriented economy, and analyzes its theoretical origin based on the development of Marxist economics, Western economic theory and the theory of sustainable development.
Chapter Two mainly studies the basic theory of the conservation-oriented economy. Proceeding from the analysis of the basic definition and meaning of the conservation-oriented economy, it assumes that the rich meaning of the “conservation” can be understood in the following aspects: firstly, according to the scopes of conservation, conservation-oriented economy refers to the conservation in the whole process of reproduction but not in a specific link;secondly, judging from the contents of conservation, conservation-oriented economy refers to the conservation in all production factors; thirdly, based on the objectives of the conservation, conservation-oriented economy is to create a society with harmony between human and nature; fourthly, from the perspectives of the route choices of the conservation, conservation-oriented economy is to build up a circulating economic system. Therefore, the basic framework of the conservation-oriented economy should include three links, namely production, circulation and consumption. The national conservation-oriented economic system is the cornerstone of the conservation-oriented economy. Circulating economy is an economic operation mode of a conservation-oriented society.
The development of conservation-oriented economy cannot be separated from the improvement of efficiency of the government. In other words, the conservation of the government operating cost should be an important component of the development mode of the conservation-oriented economy. Since numerous inefficient and ineffective phenomena exist in the management of Chinese Government and the system cost is relatively high, we also should take the system cost into account and it is particularly important to actively seek for measures, take measures to improve the government efficiency and reduce the public management cost.
Chapter Three and Chapter Four, based on the basic theory of the conservation-oriented economy, respectively studies and discusses the cornerstone of the conservation-oriented economy, the establishment of a national resource conservation-oriented economic accounting system and the operation mode of the conservation-oriented economy.
Part 2 (from Chapter Five to Chapter Nine) mainly studies the approach to realize China's conservation-oriented economy.
Chapter Five analyzes one of the important contents of the conservation in the circulation links: the construction of a unified, open, competitive and orderly market system for various resources. Proceeding from the basic theory of environment and resource pricing, this chapter discusses the main problems existing in China's energy market, water resource market, mineral resource market and land resource market, and proposes the major measures to build up perfect resource market in China such as setting up and perfecting a reasonable energy and resource pricing mechanism, gradually creating a diversified ownership structure for energy and resource industries and strengthening the law enforcement and legislation.
Chapter Six analyzes the other important contents of conversation in the circulation link: the acceleration of the development of modern logistics industry. Through the analysis of the main problems existing in China's logistics industry, this chapter proposes the basic idea of developing China's logistics industry and conserving the circulation cost. On one hand, we should strengthen the guidance for the development of the modern logistics industry and set up the clear orientation for the industrial policy. On the other, we should also plan the coordination, division and optimization of the logistics layout of all regions and strengthen the construction of the logistics infrastructure and logistics standardization.
Chapter Seven mainly studies the conservation in the consumption link. This chapter firstly discusses the basic meaning of the scientific consumption concept and points out that scientific consumption mainly includes circulating consumption and green consumption. Circulating consumption refers to a kind of material circulating consumption mode with a circular process with “consumable—consumption—waste—renewable resources—recycled products” as its characteristics whereas green consumption is a kind of consumption mode with “green, harmonious, natural, healthy” as its tenet, which benefits the human health and ecological environment.
Chapter Eight and Chapter Nine mainly study the conservation of the system cost. Chapter Eight studies how to deepen China's economic system reform. Firstly proceeding from the analysis of the experiences of different countries in the world and the common characteristics of a market economic system with standardized and effective operation, it elaborately explores the main reasons contributing to the relatively high costs for the operation of China's market economic system: the transformation of government functions is not in place; the modern enterprise management system for state-owned enterprises is not yet fully established, which generates many problems; modern market operation system is not yet perfected and modern social credit system has not yet been established. On the basis of the facts mentioned above, the main ideas for reducing the system cost during the process of deepening China's economic system reform is further proposed as follows:
We should transform the government function, establish a scientific public financial system, further promote the factor liberalization, speed up the pace of the reform of state-owned enterprises and establish a modern social credit system.
Chapter Nine also studies the standardization of government's micro-regulation system. Judging from the basic theory of the government regulation of resource conservation and based on the analysis of necessity of government's micro-regulation of the resource market, this chapter suggests that government regulating failures often exist due to the reasons such as capture of regulation, malfunction of regulation and the like. Besides, government regulating failures will lead to serious waste of resource. At the end of the chapter, basic ideas of the standardization of the government regulation of China's resource conservation are proposed, namely, we should establish and improve the resource and energy auditing system, gradually deregulate the energy and resource prices, improve the access standards of the energy and resource industry, reform the property rights system of natural resources and reform the tax system.
Chapter Ten is the conclusion that summarizes the basic viewpoints of each chapter in the book.
4 Innovative Points of the Book
The study subject of the book is China's conservation-oriented economy which is comparatively new in domestic areas. The following aspects can demonstrate the innovation of the present works:
4.1 The multi-discipline study methods such as Marxist political economics theory, market economy theory, sustainable development economics theory and property rights economics theory have been applied in this book to analyze issues of the development of China's conservation-oriented economy and to form a unified framework for theoretic study.
4.2 The author emphasizes the combination of theory and practice. The book will systematically elaborate the current development of China's conservation-oriented economy on the basis of the summaries of the economics theory about conservation.
4.3 The author claims that the basic connotation of conservation-oriented economy is: “conservation-oriented economy is the way to conservatively allocate resources through the basic role of the market mechanism as well as functions of planned macro-control and micro-regulation from the government. We can improve the efficiency of resource consumption, obtain the maximum economic and social returns with minimum resource consumption and guarantee the social and economic sustainable development through comprehensive measures concerning economy, law and administration in the field of production, circulation and consumption. The purpose of developing conservation-oriented economy is to pursue less resource consumption, lower environmental pollution, obtain more economic and social returns so as to realize sustainable development.” Conservation-oriented economy contains the 10 aspects, namely: (1) social organizations and institutions work orderly; (2) components of national economy coordinate with each other; (3) main resources are sufficiently supplied and evenly used; (4) economy's operation mode is the mode of circulating economy; (5) waste could be fully utilized;(6) green consumption becomes the mainstream; (7) technological advancements serve as the backbone; (8) ecology can be well protected and environmental protection can be friendly; (9) a social community of long-term stability, sustainment, coordinative development can be built; (10) it is a new type of economic development mode which fully embodies the progress of national civilization.
4.4 It is proposed in the book that conservation-oriented national economic system is the cornerstone of the conservation-oriented economy. In such a system, enterprises should emphasize on improving the efficiency and quality of the production, decreasing the consumption or waste of natural resources on per unit of output, obtaining the maximum output with minimum input, producing products which are comprehensively utilize resources with low substantial consumption, and exploring high added value, functional substitute products and recyclable products. It is also suggested that circulating economy is the economic operation mode of conservation-oriented society. The main feature of circulating economy is that the economic growth rate is in direct proportion to the counterpart of the intensity of resource consumption and environmental load, forming a typical mode of “three highs and one low”, namely, high mining, high consumption, high emission and low utilization.
4.5 The author maintains that because of the hierarchical feature of implementing conservation-oriented economy, its realization needs the mobilization and exertion of the main function from both producers and consumers under the guidance of the government during the gradual and progressive process which proceed from macroscopic scale to microcosmic one, from abstraction to concreteness. Since there is often some inefficiency and even ineffectiveness in government management, the realization of conservation-oriented economy needs to take institutional cost into account, actively seeking strategies, taking measures to improve governmental efficiency.