News Detail

Guangming Daily Reporter Lu Yuanzhen

 

 

“Finance is a carrying pole, carrying efficiency on one end and justice on the other.” Liu Shangxi, President of Chinese Academy of Fiscal Sciences (CAFS), shared his understanding in a recent study on the topic of finance for common prosperity. It is Liu Shangxi’s consistent principle and style to face up to the contemporary issues of China's social reform and development.

 

After graduating with a PhD in 1990, Liu joined CAFS and has been working in finance ever since. Along the way, he has produced a series of influential and innovative research results based on China's reform and opening-up development practices, providing theoretical support for solving real-life problems.

 

“The way of thinking I learned in my early years has always been with me.”

 

In 1980, Liu Shangxi enrolled in the Hunan College of Finance and Economics (now Hunan University), majoring in finance, after which he studied for a master's degree and a doctorate, and after graduation, he has been devoted to financial research. These experiences make him entwined with financial study.

 

Talking about the important points in his academic career, Liu Shangxi said that he started to focus on income distribution in his master years. His dissertation “The Circulation Theory of Income Distribution” broke down old conventions of traditional focus on income flow, offering a novel perspective of the relationship between flow distribution and stock distribution. In 1997, Liu Shangxi published “Fiscal Risk: Our Views and Suggestions” when this issue was not completely understood in China. Liu Shangxi became the first scholar to systematically study fiscal risk in China. Since then, he has developed an original theory of public risk, which has resulted in a series of significant achievements, and has attempted to create a fundamental theory of finance with Chinese characteristics based on the previous results.

 

During his university years, Liu Shangxi developed a strong interest in philosophy, and he always read those obscure books with great interest. In retrospect, Liu Shangxi thought that although these books were not superficially related to his major, they had benefited him for life. “We cannot study problems superficially but keep asking why, cultivating the habit of thinking from a philosophical perspective and further exploring the major. This way of thinking that I learned in my early years has always been with me”.

 

The habit of working diligently, thinking deeply and learning constantly has enabled Liu Shangxi to develop the academic style of rigorousness and carefulness. He defines himself as an “explorer of the public sphere”, breaking the boundaries between disciplines and covering a wide range of social and natural sciences. Over the years, he has read the history of natural science, mathematics and quantum mechanics, linking the “end of certainty” to the concept of “risk society”, which has been the source of his thinking on financial issues from a risk perspective.

 

“Write your thesis on the ground, not in a book”

 

It has always been an important principle and method for Liu Shangxi to focus on field research and to combine theory and practice.

 

Following the principle of “matching financial and administrative powers” since the 1994 tax-sharing reform, Liu discovered some problems after field research in Shaanxi in 2005. At that time, he talked to the county party secretary and the county governor in two poor counties near Xi'an, and they complained that, as the water source of Xi'an, the two counties cannot develop many industries and encounter financial difficulties, and that there was a mismatch between financial and administrative powers. Liu Shangxi asked whether it can cover all the expenditure if all the local tax revenue is left to the local government, and they said it was not enough either.

 

“I asked him as well as myself, and realised then that for less developed areas lacking tax sources, the matching between financial and administrative powers was like taking the moon from the water.” So, after his research, he boldly proposed the new principle of “matching financial and administrative powers” through an internal report. This expression was adopted in the report of the 17th Party Congress and became a major adjustment to the relationship between central and local finance, which has continued to this day.

 

Today, Liu Shangxi and his CAFS still keep the habit of practice and field research. For six consecutive years, CAFS has conducted large-scale research on enterprise costs. They have travelled all over the country, combining questionnaires with field research, resulting in big data on enterprise costs and 55 reports amounting to 1.6 million words, providing intellectual support to study the situation, prevent risks and formulate policies. "Theoretical research is not the study of the history of ideas, and it cannot only be conducted around the classics." Liu Shangxi said, "It is necessary to start from realistic problems, write papers on the earth rather than in books, and do more research that is useful for China's development and responsible for the reality."

 

“Standing on a higher level is the only way to see the most fundamental problems.”

 

As an expert who wears multiple hats, Liu Shangxi is very busy with research, meetings, writing articles, attending forums and talks ...... He says that over the years of his work, he has only taken annual leave once when compiling an anthology. His long and busy career has gradually made him a scholar who is good at thinking interdisciplinarily.

 

Liu Shangxi says his recent research has focused more on the transformation of society as a whole. For example, how finance can balance efficiency and equity and promote common prosperity; the role that finance assumes in promoting high-quality development, and so on. He believes that the focus of finance should be on the main issues facing the current reform, such as the cost of citizenship for farmers in urbanisation, “The carrier of high-quality development is people, not the development of a certain field. Promoting common prosperity is not only about economic growth, but also covers the optimisation of economic, social and distribution structures, especially the all-round development of people.”

 

The broader perspective allows him to grasp the crux of the matter more accurately. “Fragmented research can have many problems, while standing in a higher level makes it more likely to see that deepest and most fundamental problem.” Liu Shangxi said.

 

In addition to his pursuit of profoundness, Liu Shangxi also possesses a longitudinal view of history. In his books such as “The Fiscal Logic of China's Reform and Opening Up” and “The Fiscal Logic of 70 Years of New China's Development”, he has systematically sorted out the history of China's fiscal reform and development at different stages. “What impresses me most is that different times have different major tasks, and fiscal theory research is never detached from the times.” Since the reform and opening up, from the disintegration of the planned economy to the reform of the fiscal and taxation system towards modernisation, finance has always been the foundation and pillar of national governance, and Liu Shangxi’s academic research has always kept pace with the times.

 

At present, as the reform of the fiscal system continues to deepen, how to get the reform measures into practice is a major concern for experts and scholars. Liu Shangxi has been actively speaking out on various platforms, interpreting policies from a professional perspective, clearing up doubts and confusion, and accurately conveying policy to the public. At the same time, he also looks forward to raise the voice of China's fiscal theory research in the world academic community, “Economists and financial scholars should bear motherland in their mind, and should focus not only on the problems of all mankind, but also on China's problems, and should start from China's reality, tell the Chinese story well, and produce academic examples with world influence".

 

Guangming Daily (27 December 2021, page 03)

 

Source: Guangming.com - Guangming Daily