We live in the era of science and technology, knowledge-based economy and IT industry. Today, science and technology such as information technology are developing so fast throughout the world together with the enhancement of its role in all spheres of socio-economic life.
It is one of the important issues to improve the way of national planning as required by the modern age in several countries of the world. Its significance might be different from countries to countries according to the characteristics, contents and coverage of their planning.
However, one of the important theoretical and practical tasks in national planning is to find out the solution to national planning by means of balance method because keeping its economic balance is the most important matter and balance method is the main way of keeping balance.
Chairman
"The most important matter in planning is to ensure a proper balance between different sectors of the national economy."
One of the best ways to bring about the rapid development in national planning is to keep the total balance between different parts of the national economy such as the balances between accumulation and consumption, industry and agriculture, production elements as well.
The most important thing in estimating the balance of national economy is to compare on a scientific bases human and physical resources with the target of economic development. This can be successfully carried out by the balance method which reflects the way of planning.
The most essential thing in this issue is to clearly define the principles for the conformity between demands and resources, which is one of the contents of balance method. Here you can set the balance and make plans on the basis of the correct conformity between demands and resources.
However, it is important to decide how to give priority to them because it is a decisive factor in regulating the role of balance method.
In employing the balance method, priority should be given to demands while tapping all the possible resources to meet the demands.
This is the main principle of balance method, which means that the demand is based on the independent requirement of the popular masses. The requirement of the popular masses to dominate the nature by increasing the production and construction is expressed in their demands on the means of production while the demands of the people to enjoy the bountiful and civilized life are reflected in their demands for consumption. In the socialist society, which is centered on the popular masses, the state is fully responsible for the realization of the independent demands of the popular masses.
Therefore, in drawing up the balance table for the national planning, independent demands of the popular masses should be met by giving priority to demands.
It is an inevitable demand to set the active balance and make dynamic plans.
Constant innovation and continued progress are the desire of the popular masses to realize the independence and the rapid speed in economic development is the law of socialist society where the popular masses, true masters of state and society, work in high spirit for the building of a thriving socialist country.
Thus the balance in national planning should be the balance of constant innovation and continued progress, and the positive balance and the state plan should be a dynamic plan which reflects the demand and will of all the people.
The principle that the resources should be subordinated to the demand ensures the positiveness and mobilization of national plan by taking into account the balance which focuses on the demand and will of the people. If not, the dynamic plan, the plan envisaging the high tempo in the development of economy cannot be laid out.
The important one in national planning by balance method is to develop the form and structure of balance table as the situation develops.
The means of the application of balance method for national planning is the balance table of national economy. Variety of planning regulates the form of balance table, and its structure is done by planning task.
In order to develop structure and form of the balance table of the national economy, it is necessary to set up balance of the national economy in the way of comparing and according to demand and resource on the basis of national plan and invent a form of the balance table to define planned tasks of all indexes prescribing planned numbers under the provisions of the balance method. It is also important to complete the structure of the balance table to meet the need of calculation to fully satisfy the demand by enlisting whole resources and reserves.
The main problem to be solved in developing form and structure of the balance table of the national economy is to complete the balance table which can be used effectively to set up correct balance between sections.
Only when the right balance is maintained between sections, can the resources of the country be used effectively to develop the socialist economy in a high tempo in accordance with the need of the era of knowledge-based economy and IT industry and guarantee the independent and creative activity of the popular masses to the full.
The table of balance between the production, consumption and accumulation of social products has long been one of the important means to set the balance between the sections of national economy.
But it is now clear that the table is not sufficient to keep the proper balance when we consider the increasing demand for the unified and detailed planning on a scientific basis.
The insufficiency is due to the limitation of the table. It only reflects the motion of the social products with the currency index and only shows the relation between some sections of economy such as industry, agriculture, capital construction and so on, only giving the outline for socialist extended reproduction.
Therefore it is vital for the national planning to introduce the new balance table that gives the detailed and comprehensive view on the various relations among all sections of economy to keep their proper balance as the present age requires. The table of balance among the sectional plans of social products is the solution to this problem in the aspect of both theory and practice of national planning.
The table of balance between the sectional plans of social products is the development and perfection of the balance table of social products.
This table is more reliable than the other forms of balance table, because it sets the balance between the sections as required by the present era.
The effective formation and usage of this table gives the possibility for keeping proper balance among hundreds of sections of economy on the basis of the information technology and for analyzing the motion of social products in detail.
In the planning of national economy, we should solve the methodological problems for the formation of the table of balance between the sectional plans of social products and make full use of it as a means of setting balance among various sections.
Another important thing in the national planning by balance method is to enhance the scientific accuracy of the indexes of balance table.
The balance table reflects a couple of categories: demand and source, production and distribution, resource and utilization which consist of several indexes. The scientific value and workability of the balance tables is guaranteed by its accuracy.
The table has various indexes and its calculation methods might vary according to their economical meaning. Some indexes like necessary material amount may require simple calculation method, while others like production amount, labor requirement, transport capacity, main sources of investment require complicated methods. So to choose suitable calculation methods is vital for its scientific accuracy.
The accuracy of index calculation depends on the accuracies of the effects of the factors influencing the result of the economic activity and its mathematical modeling. The more accurate and scientific the detailed factors for the calculation and the variables and parameters for the modeling are, the more scientific the index calculation.
The scientific definition and usage of parameters of the modeling of the balance between sections is important for the index calculation of the table of balance between the intersectional plans.
One of the problems raised when you compose and use the balance model between the fields is how you formulate the main parameter economically.
In the past some countries in the world made and used this connection model between the fields and regulated the main parameter as a direct consumption coefficient and complete consumption coefficient.
Of course the direct consumption coefficient and the complete consumption coefficient should be the main parameter of the model in sense of analyzing the technical and economic relation between the fields.
But some economics scholars used this model for calculating balance and they call the parameter that reflects the quantity relation between the total output and the complete product a complete consumption coefficient of the goods, which does not comprise the economical content.
In fact the complete consumption coefficient includes the direct and indirect consumption of the other products for the per-unit production of the products when it happens in every field of the social product. So it characterizes the quantitative mutual relation between the interim products and the last products.
Nevertheless, the complete consumption coefficient of the goods is treated as a parameter that specialize a quantitative mutual relation between the total output production and the last production. This does not confirm to the economic content and may confuse you in understanding and using the model.
The main parameter of the balance model that we use between the sections should characterize the quantitative mutual relation between the last production and the total output in accordance with the fields of the country and this might be named complete demand coefficient of the products.
The complete demand coefficient of the products is the index that measures the amount needed for products of several fields which are spent for the production of a single final product.
As the complete demand coefficient is different in quantity from direct consumption coefficient and complete consumption coefficient and characterizes the quantitative mutual relation between the total production and the last production in the field of the country. And it gives possibility to stipulate the balanced production scale of the economical field, thus meeting the social demand.
This means that the complete demand coefficient raises highly the promptness and the scientific accuracy of the index calculation of the plan balance between the fields and it can play an important role in making the planning scientific and reasonable.
If a volume of any product is expected to be increased in a national planning we should foresee the growth of all of the fields which are directly related to the production.
When you don't use the complete demand coefficient of the product you may fail to calculate the production scale according to every field while connecting the production possibility and the social demand on the production.
The products of the individual field production and the enterprise production are foreseen by the materials, resources, electric power and equipments needed in the plan on the basis of the material demand.
So all the productive relation in the national undertaking is calculated by the direct consumption of the other's production for the production of one product.
This method does not ensure the correct and quick calculation on the balance between the sections and the task to calculate the total production task of all the fields needed in producing the final products in the national undertaking can be failed.
This task can only be solved successfully when the complete demand coefficient of the product is introduced.
