1988: Back to the human world for a few years

Chapter 533: Story. Reason. Motivation (1)

The story that those intellectuals "made up" was this:

In later generations, after decades of reform and opening up, a certain large Eastern country finally achieved qualitative change through quantitative change. The country completely entered the fast lane of development, the people across the country completely eliminated absolute poverty, and once again began to stand at the top of the world.

However, although it took only a few decades to complete the modern industrialization process that took Western developed countries 200 years, there are still some omissions and some minor bugs left over.

Therefore, in the 16th, 20th, 30th and 40th years of reform and opening up, due to a variety of complex reasons at both macro and micro levels, Southeast University experienced several drastic fluctuations with wide-ranging impacts.

Although the University of Tokyo actively intervened, and with the unique resilience of the Chinese nation, it eventually overcame these challenges after the initial pains and became stronger; however, some bugs and hidden dangers that remained during this drastic fluctuation became increasingly apparent over time.

One very important issue is that after all, Southeast University is a super populous country with very limited per capita resources. With the rapid development of urbanization and the soaring GDP, the city can not provide enough new jobs, especially high-quality jobs, which leads to the gradual narrowing of the social upward channel for the people. It is becoming increasingly difficult to change their destiny through traditional labor.

At the same time, due to the increasing cost of urban living necessities such as housing, medical care, and education, the proportion of real disposable income in the hands of the people has been decreasing year by year. As the total per capita consumer expenditure and per capita GDP become increasingly mismatched, the basic foundation of the University of Tokyo, that is, the domestic economic internal circulation system, has always been maintained in a difficult state.

If the University of Tokyo had always maintained a relatively high growth rate and relied on the incremental market brought about by the dual circulation of internal and external circulations, this problem would not be so obvious; but the world has never been as peaceful as everyone thinks. Once the external situation changes drastically, this problem suddenly becomes a headache.

You have to know that at that time, Todai was already a major manufacturing country. Unless it was determined to develop one or two of the three major pillar industries of housing, medical care, and education, the demand side's digestion capacity would not be able to take over the supply side's production capacity if the internal circulation system alone operated.

Therefore, when the reform and opening up entered its 30th year, the experts of Dongda University looked back and realized that they had been neglecting the lowest end of the pyramid, that is, the water storage capacity at the grassroots level in rural areas. It is precisely because of this structure similar to the blockage of the two poles of economic ecology that the scarce assets in the cities behind Dongda University have been seriously overvalued, and the growth rates on both the supply and demand sides have been asynchronous.

Then, when these experts looked back, they were surprised to find that if the differences in the timeline were eliminated, the economic development history of the University of Tokyo and the many problems it encountered were surprisingly similar to those of its neighboring island country.

As a result, "looking at the world and learning from history" became a very popular research field at the University of Tokyo.

"OK, this is the prologue of this story. Next, it's the main story... This story is divided into three independent sections, each written in parallel timelines. Mr. Zhao, Brother Gao, please don't be impatient."

Yang Mo smiled without much joy, wishing that these two big guys would plug their ears right now and then wave their hands and tell him to go away.

Unexpectedly, Mr. Zhao and Gao Qingfeng just looked at each other, with a hint of curiosity and solemnity in their expressions, but nodded in unison: "Xiao Yang, don't worry, talk slowly, speak a little slower, and tell in a little more detail, so that we can appreciate these stories carefully."

Yang Mo underestimated his current status.

Although he is only a director-level cadre of a central enterprise, this status inherently limits his authority in regional management, but his achievements in business and economics are dazzling;
Therefore, although he repeatedly explained that this story was made up by intellectuals with wild imaginations, and that it was indeed a bit absurd to complete the 200-year industrial modernization process in the West in just a few decades and stand at the top of the world in one fell swoop... Putting aside whether it is true or not, the fact that Yang Mo could remember this story and retell it is enough to prove that there is some very valuable information in it.

Seeing this, Yang Mo shrugged helplessly and could only continue telling this "made-up" story.

………………

At a certain time in the story, as employment difficulties intensified, many young people from the University of Tokyo began to discuss escaping from the prosperous first-tier cities and returning to their hometowns to find jobs, as if that was the last safe haven in life.

In fact, this is exactly the choice made by the young people of the island country in the 90s. The fate of the two is so similar.

In the near future of the architectural time and space, that is, in 1992, the island country, which has always been sniped by European and American financial capital, is still a long way from economic collapse, but its economic growth rate has dropped to 0.9%; the urban economy, which had been developing rapidly for decades, was put on hold during three years of severe economic fluctuations.

As economic growth came to an abrupt halt, the three metropolitan areas (Tokyo, Osaka, and Nagoya) that had employed a large number of young people during the island nation’s bubble economy were immediately faced with a serious labor surplus;

By 1993, the total number of job seekers in the three major metropolitan areas had reached 1.46 times the number of positions - that is, even if all positions were recruited, only 70% of job seekers could be absorbed.

As a result, a serious social problem is faced by the island country.

In the past, the rapidly growing economy could support a large number of young people going to big cities to work, but now the economic growth of the island country is no longer sustainable, and a large number of young people are still stranded in the big metropolitan areas. You know, during the bubble economy period, more than 12 young people poured into Tokyo alone every year. This not only made Tokyo famous as the world's second most populous city, but if these young people cannot find jobs for a long time, the possible consequences will be extremely terrible.

Therefore, in order to solve this problem, the island country officials launched a series of measures to divert the urban population;

The most important one is to encourage young people to return to their hometowns to start businesses, and this series of actions is collectively referred to as the "Island Country Rural Revitalization Plan."

According to statistics from the island country's agricultural and forestry society, a total of 200 million people returned to rural areas for employment during the entire island country's rural revitalization plan. As a result, Tokyo has experienced negative population growth for three consecutive years, which has eased the city's employment pressure for a period of time.

But a very cruel fact is that the island country’s rural revitalization plan lasted only 7 years before it was hastily declared an end. The massive return of the population and the wave of urban unemployment directly triggered the island country’s super employment crisis in the millennium... Therefore, the three years from 2000 to 2003 were also called the "super employment ice age" by the island country.

Well, the problem is coming.

Why did the seemingly promising trend of young people returning to their hometowns to find jobs eventually lead to an employment crisis for the island country?
This is not common sense!
After all, the island country is not today's China. Even if the economy has stagnated, the foundation of the world's second largest economy is still there.

What's more, those young people who return to their hometowns from the three major metropolitan areas to start businesses are exposed to the most advanced things in the world. They have money, knowledge, and ideas. How could they not be able to make it?
However, in this story, a relatively reasonable underlying logic is given according to the timeline.

First of all, why did the island country launch that round of rural revitalization plan?

The biggest reason is the hope to stimulate the economy through large-scale infrastructure!

In the past twenty years, the core urban areas of the island nation have basically completed infrastructure construction. Therefore, this round of stimulus can only use the countryside as a reservoir for infrastructure; this can not only quickly create jobs and reduce unemployment, but also divert the urban population. The employment and economy that can be directly driven by young people returning to their hometowns to start businesses are not that much, but if coupled with policy-based supporting infrastructure, the effect of driving this will be greater.

(However, no one expected that the island nation’s economy would not recover and a large number of people would continue to return home. The island nation’s government could only continue to maintain the scale of infrastructure construction. Eventually, the villages could not bear the excess population, leading to the famous “Heisei Great Merger”. After the merger, half of the grassroots jobs in the island nation’s villages disappeared, and countless young people were forced to return to big cities and became a drifting group.)
Secondly, how do island countries stimulate young people to return home to find employment?

In the story, it was probably in 1992 that the island nation officially launched the Rural Infrastructure Revitalization Act, which had a huge impact on later generations. Everyone on earth knows that as early as the period of Roosevelt's New Deal, it had been proven that large-scale infrastructure had a role in boosting employment and the economy.

So according to later statistics from the island nation's Ministry of Finance, approximately 1992 trillion yen flowed into the rural infrastructure market during the three years from 1995 to 25.

In this process, practitioners in the construction industry have become the biggest beneficiaries of this round.

Judging from the fabricated data in the story, when the real estate market in the six major cities of the island nation collapsed drastically in the 90s, the number of people employed in the construction industry actually grew against the trend from 510 million before the bubble to 1997 million in 700, making it the fastest growing industry in the island nation in the last years before the bubble completely burst.

In fact, this effect began to emerge after the first round of rural infrastructure investment was completed. According to statistics from the island country's Ministry of Internal Affairs and Communications, between 1992 and 1995, 70 people moved from urban areas to non-urban areas each year, and more than half of them were employed in the construction industry.

By 1995, the island nation's GDP growth finally returned to above 2%, but the unemployment rate in the core urban areas was still over 3.5%, and the employment pressure in cities was still enormous.

Therefore, the decision-makers of the island nation can only choose to continue with large-scale infrastructure projects to divert the excess young people in cities.

Of course, the island country’s officials are actually well aware of the dangers of large-scale rural infrastructure. They even pointed out in their 1995 economic white paper that excessive infrastructure investment has not been effectively used for people’s livelihood construction. As the overall infrastructure level of the island country is already very complete, its stimulating effect on national economic growth has been very weak. In order to obtain as much infrastructure budget as possible, each region has proposed a large number of ineffective construction projects for implementation.

To put it bluntly, the island nation's large-scale rural infrastructure projects have rapidly evolved into fat meat in the eyes of regional political parties and corporations - there are even social critics in the island nation who describe their rural revitalization plans as "repackaging the countryside with concrete."

In fact, there is no exaggeration in this statement. By the time large-scale rural infrastructure construction was stopped, 55% of the island's coastline had been covered with concrete.

But there was no way, the island country’s officials at the time were also caught in a dilemma.

If infrastructure construction is stopped immediately after the completion of the first phase, the massive rural jobs created by infrastructure construction will disappear quickly; then the core urban area of ​​the island country will not be able to bear so much population transfer;
However, if we continue to adopt large-scale infrastructure stimulus, it is possible that the stimulus will be delayed for a period of time until the island nation's economy improves.

As we all know, the island nation is a country with a strong gambling nature, and it likes to gamble on its national destiny at every turn. Therefore, under this circumstance, the officials of the island nation resolutely chose to continue to invest huge amounts of money in large infrastructure plans (it should be emphasized here that although this is very similar to the situation in my country in 08, the difference between the two is that my country’s 08 trillion infrastructure plan in 4 was proposed to resolve that external shock, while the island nation’s 25 trillion yen infrastructure plan was proposed to try to resolve their endogenous shocks. To put it bluntly, it is the systemic financial risk caused by the hard landing of the island nation’s real estate. There is a very big difference between the two, and the effects are also completely different).

After 1995, the first wave of large-scale infrastructure construction basically subsided, and a small number of people began to return to cities from some rural areas; therefore, the island country had to immediately start a second round of stimulus plan.

However, in this round, the island country's government shifted its focus from infrastructure construction to rural tourism investment, and introduced the "Rural Leisure Promotion Law" to encourage private capital to build resorts and other leisure facilities in rural areas.

Affected by this, rural tourism immediately became the largest investment outlet for the island country. At that time, the island country's banks were suffering from lack of loans, so a large amount of bank loans were immediately used in the rural tourism industry. According to the data of the island country's Tourism Bureau in the story, 6 months after the introduction of the Rural Leisure Promotion Law, 109 large and medium-sized resorts were newly started; and by 1998, there were more than 700 ski resorts in the island country alone. Ski resorts have always been regarded as the entertainment and leisure projects with the highest construction and maintenance costs in the tourism industry. So many ski resorts were newly built in just a few years, which shows the crazy investment level of the island country during that period.

But the ski resort is just a microcosm of this. In fact, during the period from 1995 to 1998, almost every village in the rural areas of the island nation spared no effort to create its own rural tourism... From food, clothing, entertainment, shopping, to even sexual attraction, it can be said to be varied and all kinds of strange tricks are used; its essence is the result of the joint participation of private capital and official capital in the island nation in order to stimulate economic investment under the condition of continued sluggish real estate credit.

As it turns out, the rural tourism boom led by the island country has had a very obvious effect in the short term...at least it has driven a large number of people to return to their hometowns for employment.

However, unlike the first phase of large-scale infrastructure projects that led to the return of construction industry workers, this round of rural tourism boom has led to the return of a large number of people in the service industry.

According to the timeline of the story, in 1996, after the island's new tourism projects began to enter the actual operation stage, the high-value-added tourism income in the countryside began to increase rapidly, and the gap between the rich and the poor between urban and rural areas of the island began to narrow rapidly;
By 1997, thanks to the upgrading and development of the tourism industry, the disposable income of households in rural areas of the island nation reached an all-time high.

At this time, the island nation was hit by a financial crisis that affected the whole of Asia. Urban areas began to lay off a large number of employees and cut wages. As a result, the per capita income in rural areas was 1.26 times that of urban working-class families. This further stimulated people to return to their hometowns for employment. On the one hand, there are the high cost of living in urban areas, suffocating work pressure and rising unemployment rates. On the other hand, returning to one's hometown to heal wounds and enjoying high-paying jobs brought about by large-scale infrastructure and industrial support. I believe most people know how to choose.

However, most people don’t realize that the gift that fate gives you actually has a price already secretly marked on it.

You should know that these two rounds of returning to hometowns to start businesses and find jobs are based on huge infrastructure investments and massive private capital. Many of these jobs are "artificially" created; once the investment stops, these jobs will quickly disappear.

In 1998, as the financial crisis that affected the whole of Asia continued to affect the island nation, it faced the largest wave of bankruptcies since the bubble burst. The island nation’s government was forced to issue massive amounts of debt to save the companies in the city’s economic circle that were already struggling to survive and were now facing a series of setbacks.

For the rural areas of the island nation, there are two even greater shocks.

First, a large amount of infrastructure investment was withdrawn from the countryside to save bankrupt enterprises in the urban economic circle, which brought the progress of large-scale infrastructure in rural areas of the island country to a halt, and there was no longer any dividend brought by continued investment;
Second, a large number of resorts built with bank loans have also faced a massive wave of closures due to the bankruptcy of the banking system and a sharp drop in tourists during the economic downturn.

Simply put, the rural model that relies on debt-financed infrastructure cannot be maintained once the upstream capital flow is cut off; the rural employment prosperity created by large-scale infrastructure will also quickly collapse when risks arise.

By 1999, the island nation finally faced a local debt crisis. The total debt of various regions that year reached a terrifying 180 trillion yen, which was three times that of 1990... In other words, in just ten years, various parts of the island nation had added 120 trillion yen in debt.

Under the huge debt pressure, not to mention continuing to bear the operating expenses of various infrastructure, many villages in the island country have even lost the most basic repayment ability and can only rely on the official financial resources of the island country to maintain operation.

According to statistics from the island country's government department, by 1999, about 20% of the island country's villages had more than 50% of their disposable fiscal revenue from official aid; many villages were no longer able to generate income and could only survive by relying on official transfer payments from the island country;

This undoubtedly made the already extremely difficult official finances of the island country even worse. You have to know that the main source of the island country's economy and tax revenue is still the enterprises in the urban circle, and the island country's officials could not just leave it alone;

Under the extremely difficult financial difficulties, reducing fiscal expenditures once again and cutting jobs in various places have become the inevitable choice for the island country's officials;

So when the millennium arrived, the island nation's officials finally made up their minds and launched a rural merger plan (Heisei Great Merger) that was criticized by countless people in later generations, but also considered by countless people to have saved the island nation's rural areas. In just seven years, the island nation's original 3200 villages were merged and reduced to 1700. At the same time, in this round of mergers, 47% of grassroots institutions were abolished.

According to statistics from the island nation's official department, after the major merger was completed, the island nation's rural personnel expenditure alone was reduced by 1.8 trillion yen each year. This shows how many grassroots positions were reduced in this round of mergers.

In fact, in the story, this major merger has a more appropriate name among the people - Heisei Avalanche.

In this process of twists and turns and sudden changes, the lives of many people on the island were like encountering an avalanche, unable to avoid it and were swept away by it.

Although this major merger saved the island nation's rural finances and enabled it to still have the minimum economic reservoir function, the wave of returning to the countryside to start businesses and find jobs that began in the early 90s came to an end.

It is worth mentioning that during this major merger, the island country’s agricultural cooperatives took advantage of the official financial difficulties and, after more than a decade of rapid growth, became the unrivaled king in many regions. They even became the supreme weapon for the major chaebols to influence the island country’s policies... But that’s another story, so let’s not talk about it for now.

After the return-home tide officially came to an end, a large number of young people who had returned home could only flock to the cities again.

In 2001, Tokyo's net population inflow returned to 12 people per year after a lapse of twelve years. It has continued to rise since then and exceeded 2008 people per year in 16.

This is a very deadly number.

You have to know that at the beginning of the millennium, the island nation had just experienced the Asian financial crisis and a wave of corporate bankruptcies, and the employment environment in the island nation's urban economic circle was not optimistic. Coupled with such a huge influx of population returning to the city, the island nation's unemployment rate soared by more than 5% that year. Major metropolitan areas were full of people waiting for employment, and the sense of depression and disorder even made people doubt whether this was the second largest economy in the world... In this made-up story, this period of time was also called the "super employment ice age" by the island nation.

In short, in the island cities at that time, there were very few formal and stable jobs, let alone high-paying jobs.

During this super employment ice age, the size of the island nation's labor dispatch market increased by 30% annually. Countless people rushed to go abroad to do labor dispatch jobs that would have been considered exile to a cold and bitter place ten years ago, just for the salary that was relatively acceptable within their own country.

As for those young people who returned to the city to work, after being away from the city for several years, most of them found it difficult to even get such unstable labor dispatch opportunities, and could only engage in low-paying jobs such as convenience store employees and catering waiters.

This is an extreme waste of talent!
You know, since they had the capital and confidence to return to their hometowns to start businesses, a considerable number of these people are graduates from prestigious universities, and some were once core backbones or even middle-level managers in large companies.

But now that they have returned to the city, they can only do jobs that have a foreseeable end at a glance, and it is difficult for them to get a second chance to change their destiny... It's because, in this era of rapid change, they have been out of touch with the city for too long.

In that story, these young people who were born in non-first-tier cities, live in Tokyo, but can only survive by doing odd jobs, are called "drifters" by the island society...which means "they don't have a stable job in a big city, but can't go back to the hometown where they grew up (or they no longer have a hometown), and are forced to give up marriage, childbirth, and real estate, and finally can only face a life of constantly losing everything."

In fact, the vast majority of those drifting people are indeed destined to continue drifting like this, drifting from youth to middle age, and then from middle age to old age.

From the perspective of the times, they are the last generation of small town youth heading towards big cities; the generation before them has completed the original accumulation in the big cities, while the generation after them has fully realized the difficulties of survival in big cities and thus chose a dull life script.

Therefore, the emergence of a large number of drifters not only marks the beginning of the transformation of the mainstream values ​​of the island nation from "active struggle" to "passive lying down", but also indicates that the world's second largest economy, which once made America uneasy, has completely lost its long-term competitiveness. The subtleties involved are terrifying to think about.

………………

After listening to the first story in which Yang Mo selectively concealed some specific details, Mr. Zhao fell into deep thought. Gao Qingfeng, after pondering for a while, nodded gently: "The status of a city in the regional economy is similar to that of a key organ like the heart. Although it is extremely important, it also needs to draw a lot of blood and energy from the surrounding area to maintain its operation... A body must have a heart, but if the heart is too enlarged, it may even consume more than 70% of the body's energy, which is a fatal disease."

As he spoke, he looked at Yang Mo deeply and said, "No wonder Mr. Yang has always been reluctant to speed up the urbanization process in Dezhou and replace it with the urbanization process. I guess he has this consideration?"

Hearing this guy vaguely mention the setbacks faced by You Yakun, Kuai Hua and others, Yang Mo touched his nose and nodded slightly without giving any clear response.

Gao Qingfeng smiled and asked, "In fact, in my opinion, urbanization is just a second-best supplementary measure when urbanization is not promoted effectively... However, since Mr. Yang is very wary of urbanization and seems to be very resistant to too many laborers from rural areas moving to cities, the objective reality of low productivity in rural areas is here. Just like the story just now, it is difficult to rely on the one-way transfusion of the competent unit. I wonder if Mr. Yang has any good solution?"

There was something disconcerting about these words. After all, many people viewed accelerating the process of urbanization as a panacea for accelerating the pace of economic development. However, the story Yang Mo had just told ruthlessly pointed out some of the disadvantages of excessive urbanization... Especially the major social turning point implied by the "drifting tribe", which was difficult for any person in a high position to accept.

Yang Mo looked at him calmly, with a harmless smile on his face. "It's hard to say whether there is a way or not. However, in the second independent story that I'm going to tell, there are some ideas that may be worth learning from. Maybe we can skip the huge pitfalls that the island country has stepped into in the story to a certain extent."

As Yang Mo spoke, he took the other Panda cigarette handed over by Mr. Zhao, lit it, and exhaled a puff of smoke under Gao Qingfeng's sharp eyes. "Mr. Zhao, Brother Gao, I don't know if the current economics community and think tanks have mentioned a concept called "Strong Village Company"?"

Qiangcun Company?

Mr. Zhao and Gao Qingfeng looked at each other with confusion in their eyes, then slowly shook their heads.

Seeing this, Yang Mo hummed softly: "Don't be afraid if I haven't mentioned it. The second story mainly talks about the strong village company model with Chinese characteristics..."

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PS: 1. I haven’t finished the things I have to do yet. I will try my best to write more in each chapter to make up for the gap on the 21st.

2. Don’t rush to make a conclusion. It is recommended that you read these three stories first. This is also the core point of the book.

that's all.

(End of this chapter)