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2008: Beware of Excessive Macro-Control

2008/1/10 17:33:22

According to traditional Chinese medicine, the principles of treating people and governing a nation are interlinked. And economic regulation is obviously an extremely important aspect of governance. The ailments of an economy follow the same logic as the ailments of the human body.

Chinese medicine categorizes disease states into three types: pre-disease, incipient disease, and manifest disease. Economic ailments similarly have these three states. Disease is not a mechanical, static concept — disease states can constantly transform. And frequently, disease is caused by the medicine itself. A minor illness turned into a major one by medication — this is not unheard of. The same applies to economic issues.

Disease has no fixed state, and medicine has no fixed state either. From a grand perspective, everything in the world is both medicine and poison. If it corresponds to the condition, it's medicine; if it doesn't, it's poison. And this correspondence has no a priori inevitable rules — everything is ready-made in the present moment, the resultant of all forces at play.

But more importantly, for any disease, external medicine is always merely auxiliary. The human body itself possesses the supreme medicine, surpassing all external remedies. True medication must ultimately stimulate the body's own supreme medicine — only then is the root truly treated. Once the body's own supreme medicine is activated, healing occurs without treatment. Otherwise, taking medicine daily, even divine elixirs will turn to poison.

Moreover, medication must vary by individual. A vigorous youth brimming with vital energy and an elder whose lamp of life is guttering — even with the same disease, the medications cannot be the same. Similarly, for the same person at different life stages, in different geographic environments, in different seasons — the same disease requires different medications.

For the Chinese economy, viewed from a grand historical perspective, we are still vigorous and brimming with vital energy — not on our last legs. Against this grand historical backdrop, any economic medication must respect the boundary of stimulating the body's own vital self-repair function, and must not overdose in a way that damages vital energy.

What's more important is that while our economic vital energy is abundant, our meridian system is not yet unblocked and our Ren and Du meridians are far from connected — this is the fundamental reason why our economy is particularly susceptible to febrile diseases. For febrile diseases, simply using heat-clearing medications is useless — this can't even easily treat the symptoms, let alone the root cause. And if febrile diseases aren't treated at the root, over time, with water and fire failing to regulate each other, toxic heat building up, it will congeal into malignant tumors. Once tumors spread, it becomes an intractable condition.

To treat the root, the key is to open up the meridians, connect the Ren and Du channels, and thereby allow the body's vital energy to circulate naturally according to the seasons — flowing ceaselessly in unobstructed circulation. Any system has its phases of creation, sustenance, decay, and dissolution. Treating the root doesn't mean achieving immortality — it means living out the natural lifespan. Similarly, economic development has its stages and its creation, sustenance, decay, and dissolution. Timely treatment and maintenance means living out the natural lifespan — allowing each stage of economic development to exert its maximum force and extend its lifespan and development period as much as possible.

China's economy is in the initial stage of its historic great development. Some of the most fundamental units of the economic structure haven't even fully developed yet. We are vigorous, but our organs are immature, and each functional system is also in an extremely immature stage. Therefore, any treatment must include nurturing these functional systems. Any overly aggressive medication will have extremely devastating effects on extremely immature functional systems. An economic system that, during its developmental stage, suffers from excessive or reckless medication, ultimately causing certain functional systems to become permanently underdeveloped, leading to long-term deformed economic growth — this is not a rare occurrence in world economic history.

A healthy human body requires, first and foremost, healthy organs and functional systems. Likewise, a healthy economic system without healthy fundamental unit systems is completely unimaginable. For China — a teenager in the market economy — the key is healthy physical development. Without this, treating any disease is meaningless.

The warning "Beware of excessive macro-control in 2008" is precisely because our economy is at the critical juncture of puberty development, yet many of our most fundamental units have not reached the development level they should have. At this point, the choice between using aggressive medicine to forcibly suppress some symptoms versus using appropriate medicine for steady guidance while quickly catching up on developmental deficits — making up for what should have been properly developed — has decisive significance for the long-term development of the Chinese economy.