Abstract
Hu Jintao administration (Hu-Wen administration), which launched in 2002, proposed “Harmonious Society” as a catchphrase of their own policy. It is generally understood that “Harmonious Society” which raised the “protection of the weak” is a kind of antithesis to the principle of Jiang Zemin administration, adopting the “economic growth oriented” policy. Actually, however, the basic direction of economic policy in the Hu administration is not different from the Jiang Zemin regime.
On the other hand, the following phenomenon, to be considered as the background of the “over accumulation of capital”, seem to be increasingly serious in the era of Hu Jintao. a) the decline of the labor’s share, due to the reform of state-owned enterprises and the intensified competition among the non-state enterprises, b) the expansion of the corporate saving or retained earnings of nonstate enterprises, c) the sluggish consumption of the household sector, due to a immature of the social security system.
Series of policies aiming to “Harmonious Society”, could not provide fundamental solution the phenomenon of “Over Accumulation of Capital” Rather, these policies were assumed to be the postponement of the problem, through the intervention by the state into the market. However, such strengthening of the state intervention, have further strengthen the contradiction of “Over Accumulation of Capital”, on the other hand. Therefore, the degree of state’s intervention in Hu administration has been stronger and stronger as a result. In other words, the Hu administration seems to fall into the “trap” of sorts.
