The 10th meeting of the Central Committee of Finance and Economics recently brought the "third distribution" back into the public eye.
In the digital age, how should we do a good job in the third allocation? What roles should the government, enterprises, and social organizations play in public welfare and philanthropy? How to revitalize public confidence in charitable causes? Wang Zhenyao, Dean of the China Institute of Public Welfare at Beijing Normal University and former Director of the Department of Social Welfare and Charity Promotion at the Ministry of Civil Affairs, accepted an exclusive interview with 21st Century Economic Report reporters.
Wang Zhenyao believes that China has objectively entered the era of "social value economy". When the per capita GDP reaches the threshold of 10000 US dollars, social value begins to lead economic value. The goal of economic development is no longer "seeking more", but "seeking good".
Wang Zhenyao, Dean of the China Institute of Public Welfare at Beijing Normal University and Director of the former Department of Social Welfare and Charity Promotion at the Ministry of Civil Affairs
In the digital age, we should jointly build projects to promote public welfare and charity
21st Century: The 10th meeting of the Central Finance and Economics Commission proposed that to promote common prosperity in a down-to-earth way, it is necessary to build a basic institutional arrangement for the coordination of primary distribution, redistribution and tertiary distribution. What role will the third allocation play in improving the distribution structure? What are the new features of the third distribution in the era of "Internet plus"?
Wang Zhenyao: When the third distribution is put on the agenda of the party and the state, it is not only a simple encouragement for everyone to do charity, but also brings about institutional improvements to the overall distribution structure. Advocating goodness and love will have an impact on both the initial distribution and redistribution. For example, the current "996" working system, which is not uncommon, or the relatively backward living and production conditions of some migrant workers, reflect the lack of fairness in initial distribution.
Redistribution also faces many adjustments, including major illness treatment, child assistance, elderly care, and services for disabled individuals. By promoting the concept of the third distribution, we can pay more attention to fairness in the process of initial distribution and redistribution, and also mobilize the power of public welfare and charity to make up for some parts that countries cannot fully handle.
Entering a new era, our public welfare and charitable undertakings have undergone significant changes compared to the past. In the era of digital economy, the growth rate of global economic aggregate has slowed down, but the momentum of wealth accumulation is strengthening. In this context, economic behavior changes, and social behavior also needs to change.
The older generation of philanthropists mainly use donations to solve the problem of food and clothing for the impoverished population. At present, public welfare and charitable undertakings should not only promote donations, but also connect the government, enterprises, and society, and benefit people's livelihoods through the joint construction of some projects.
Taking the treatment of major illnesses as an example, the total expenditure of the National Medical Insurance Fund every year is trillions of yuan, and the total financial subsidies and social fundraising for major illnesses also exceed hundreds of billions. However, there are still patients who worry about major illnesses. So beyond the issue of money, the concept of public cooperation is particularly important. How to facilitate information sharing among patients, social organizations, medical institutions, and governments in the digital age? There is room for project development.
Furthermore, there is an urgent demand from all sectors of society for public learning platforms. Learning platforms are a beneficial supplement to children's education, while also alleviating the depression and loneliness of the elderly. The central government has issued many documents for projects such as parent schools and child directors, and the establishment of the platform is also beneficial for promoting the implementation of these projects. This is not only the responsibility of the government, but many things with professional colors should be seen in the presence of social figures.
In summary, the current stage of public welfare philanthropy should have greater social benefits. We need experts in social policy research, experienced administrative workers, and social organizations engaged in public welfare philanthropy to engage in deeper dialogue and pay attention to some of the urgent social issues that need to change, rather than relying solely on the power of donations.
21st Century: Han Wenxiu, Deputy Director of the Central Finance Office, recently proposed in his speech that the national tax policy should provide appropriate incentives for the third distribution. How to leverage the incentive effect of taxation on social donations? What other means can help with the third allocation?
Wang Zhenyao: The adjustment of tax policies can be approached from two aspects. On the one hand, inheritance tax and other direct taxes are collected. The ancients had a profound understanding of how to view wealth. The Great Learning mentioned that "those who are benevolent get rich with their wealth, while those who are not benevolent get rich with their own wealth. Many Chinese entrepreneurs have also told me that wealth cannot be controlled without virtue. Merely retaining wealth without retaining virtue may harm the child. Rich people leave a pile of golden mountains for their children, and these children can achieve success without effort, which is a harm to society. Therefore, the state collects inheritance tax and other taxes, which is conducive to the formation of an olive shaped social stratum structure.
On the other hand, as long as you donate to society, you will need to reduce your tax burden accordingly. One levy and one reduction are equivalent to two gifts given by the state to big entrepreneurs. Why not use this fund to promote the development of public welfare and charity, which is beneficial for educating future generations and forming a family tradition of hard work?
Of course, tax policy is only one of the means, and macroeconomic policies that match the high-quality development stage should also be kept up with, including the management of social organizations, the upgrading of public services, and the supervision of the charitable trust industry. More love should be accommodated at the legal level.
Furthermore, we need to commend the caring individuals who have made contributions, which is far from enough. We need to cultivate a social atmosphere of doing good and honorable deeds, gather consensus on a correct view of wealth, and assist in the development of social undertakings, which is the fundamental path to doing a good job in the third distribution.
In the era of "social value economy", social value leads economic value
21st Century: As early as 2013, you proposed that China is about to usher in an era of "social value economy". How to understand the concept of "social value economy"? What are the paths worth exploring for enterprises to participate in public welfare and charitable causes, and what risks should be taken into account to prevent?
Wang Zhenyao: From 2000 to 2011, the global per capita GDP increased from around $5000 to over $10000. But in the following decade, the per capita GDP remained stagnant, fluctuating around $11000.
With the continuous growth of the economy, what we are pursuing is from "nothing" to "something", and from "less" to "more". The per capita GDP exceeding 10000 US dollars is an important indicator, which means that the total amount of material wealth is greatly enriched. We began to consider the issue of transitioning from "good" to "better".
In 2019, China's per capita GDP exceeded the threshold of $10000, and the overall business logic is also undergoing a transformation. In the past, economic value led social value, but now social value is starting to lead economic value. Does the quality of the product meet high standards? Does the enterprise treat customers, employees, and the environment well? These indicators are increasingly becoming important factors for measuring the high-quality development of enterprises.
When the goal of economic development shifts to "seeking good", I call this era the "social value economy" era.
In the context of China, public welfare charity is no longer a backup option for enterprise development, but a necessary option. The country is vigorously promoting the construction of public services, and in this process, enterprises need to integrate their own philosophy and mission with the needs of society, and carry out public welfare and charitable activities with a serious attitude towards project development and investment.
The paths explored by large enterprises and small and medium-sized enterprises are not the same, and large enterprises should set their sights high. As for small and medium-sized enterprises, on the one hand, they can form a joint effort from multiple parties and choose familiar fields to develop targeted projects. On the other hand, it can sink into the community and play a role at the grassroots level through peer-to-peer assistance. Charity is not just about big projects and big strokes, but precisely solving grassroots problems will also earn social respect.
In the new stage of development, multi-dimensional standards have emerged for evaluating the public value of enterprises. Comprehensive evaluations, including ESG evaluations, will also promote enterprises to embrace kindness and love more actively.
In the process of transforming enterprises towards goodness, it is also necessary to pay attention to preventing some problems. Firstly, some companies engage in charitable activities that are highly arbitrary and lack planning and sustainability. After the disaster, I donated a sum of money to complete the task, and such donations are not directly related to the sustainable development of the enterprise.
Secondly, the country also wants to promote the concept of the third distribution and promote the healthy development of enterprises. So enterprises should not only focus on external assistance, but also provide timely assistance to employees who are facing difficulties within the enterprise.
Furthermore, enterprises need to register and establish their own foundation, and hire professional talents to manage the operation of the fund and project development. Charity is not just a ritual, we need to formalize its long-term operation.
Finally, I would like to remind enterprises once again that they should pay attention to engaging in more positive interactions with the government and society, understand the needs of all parties, and avoid doing some thankless things.
(Author: You Fangming Editor: Li Bo)