  On 30 December 2021, the 10th Xi Xian Academic Seminar, co-organised by IIDPF and the School of Public Finance and Taxation, was successfully held in Conference Room 119, Wenqin Building. Dr Zou Jianwen, a researcher of IIDPF, was the guest speaker of this academic luncheon and gave a lecture entitled "Understanding the Mystery of the Declining Investment Rate of Chinese Real Enterprises - An Analysis Based on Dynamic Investment Models". The forum was chaired by Professor Lu Yuanping, Executive Deputy Director of IIDPF, and more than 40 students and faculty members, including Professor Sun Qunli, Deputy Director, Dr. Yan Weibo from the School of Public Finance and Taxation attended the academic seminar.
  The significant decline in investment rates by Chinese real enterprises in recent years has increasingly affected macroeconomic performance, and the easing policies and stimulus measures implemented by the government to this end have not led to any significant improvement in this phenomenon. Improving the return on investment by real enterprises and promoting investment by real enterprises are important requirements for promoting high-quality development under the new development pattern. However, few scholars are currently directly analysing the reasons for the decline in corporate investment rates, making it difficult to apply the right measures to enhance corporate investment rates.
  Based on the structural estimation of the dynamic investment model, Dr. Zou Jianwen focused on the causes of the decline in enterprise investment rate based on estimating the structural parameters of the model and using the annual data of listed companies from 2003-2018 in the CSMAR database to quantify the explanatory power of factors affecting the decline in enterprise investment rate, such as the cost of labour, financing costs and taxes and fees. The empirical study found that the rise in enterprise labour costs was an important reason for the decline in enterprise investment rates, explaining more than 50% of the decline in the investment rates of real enterprises, and further analysis found that 82.9% of which was due to the rise in labour costs caused by wage expenses. In the policy analysis, the impact of various policy tools, such as lowering labour costs, lowering financing costs, tax cuts and fee reductions, on the investment rate of enterprises was simulated through counterfactual simulations, further exploring how to improve the investment rate of real enterprises. The analysis found that tax cuts and fee reductions are still important tools to stimulate investment in real enterprises, which can be stimulated through policies such as cost credits and depreciation credits; against the background of the disappearing demographic dividend and rising labour costs, it is fundamental to adhere to innovation and increase productivity to ultimately promote high-quality economic development.
  Dr Zou Jianwen's sharing attracted the students and teachers present, who actively interacted with Dr. Zou. The shared research has helped to fundamentally address the low investment rate of real enterprises and provided a basis for the government to formulate policy solutions.