The Major Tasks in Deepening Economic Reform and Utilizing Its Leading Role

We must build a high-standard socialist market economy

A high-standard socialist market economy will act as an important guarantee for Chinese modernization.

We must ensure that the market plays the decisive role in resource allocation and that the government better fulfills its role. We need to uphold and improve China’s basic socialist economic system, better leverage the role of the market, foster a fairer and more dynamic market environment, and make resource allocation as efficient and productive as possible. We must lift restrictions on the market while ensuring effective regulation, so as to unleash the internal driving forces and creativity of the whole of society.

We must deepen reform of state capital and SOEs; help state capital and SOEs become stronger, do better, and grow bigger, with their core functions and core competitiveness enhanced; and introduce value-added accounting in the state-owned sector. We need to foster a favorable environment and create more opportunities for the development of the non-public sector. We must formulate a private sector promotion law, improve the long-term mechanism whereby private enterprises participate in major national projects, and give assistance to capable private enterprises to take part in leading national initiatives aimed at making breakthroughs in major technologies.

We need to refine the modern corporate system with Chinese features and promote entrepreneurship; support and guide enterprises of all types as they work to use resources and production factors more efficiently, improve their operation and management, and fulfill their social responsibilities; and strive to quickly foster a greater number of world-class enterprises. We must build a unified national market, including developing a unified market for urban and rural land designated for construction, fostering an integrated national market for technology and data, and refining the integrated framework of distribution rules and standards. We must step up efforts to develop a complete domestic demand system, including setting up long-term government investment mechanisms to support the development of major projects that are of fundamental and far-reaching importance and serve the public interest, as well as refine long-term mechanisms for expanding consumption, while reducing relevant restrictions and boosting public spending as necessary. We also need to refine the systems underpinning the market economy, including improving the protection of property rights, market information disclosure system, market access system, bankruptcy and market exit systems, and social credit and oversight systems.

We must promote high-quality economic development

High-quality development is a foremost task in building a modern socialist country.

We need to improve institutions and mechanisms for fostering new quality productive forces in line with local conditions. This includes refining institutions and mechanisms for the optimization and upgrading of traditional industries, enhancing the policy and governance systems for promoting the development of strategic industries, and establishing a mechanism for ensuring funding increases for industries of the future. It also includes accelerating the formation of relations of production that are more compatible with new quality productive forces and channeling various types of advanced production factors toward the development of new quality productive forces, in order to increase total-factor productivity significantly.

We must improve the systems to promote full integration between the real economy and the digital economy. This entails improving the policy system for developing the digital industry and transforming traditional industries with digital technologies, putting in place a funding mechanism to ensure that the share of manufacturing in the national economy remains at a desirable level, and improving the system for routine regulation of the platform economy.

We need to refine the institutions and mechanisms for developing the service sector, including refining the policy system for supporting the development of the service sector, promoting the integration of producer services, and improving the mechanisms for accelerating the diversified development of consumer services.

It is also necessary to balance the relationship between development and security. To this end, we must develop China’s strategic hinterland and formulate backup plans for key industries and improve the systems for bolstering the resilience and security of industrial and supply chains. This is an inevitable requirement to respond effectively to containment and suppression as well as decoupling and delinking and to ensure safe development.

We must support all-around innovation

Science and technology (S&T) are our foremost productive forces, talent is our primary resource, and innovation is our principal driver of growth. We must strive to create a virtuous cycle between high-quality education, talent, and S&T.

Regarding deepening comprehensive reform in education, we must focus on fostering a new generation of young people to shoulder the mission of realizing national rejuvenation, enhance our ability to nurture top-tier innovative talent, and advance coordinated reforms in student training methods, school operation models, management systems, and support mechanisms. We must develop mechanisms for adjusting the configuration of disciplines and foster talent training models to meet the needs of China’s scientific and technological development and national strategies, strive to cultivate innovative capacity, and explore ways to gradually expand free education.

In terms of deepening reform of the science and technology management system, with our sights on the global frontiers of science and technology, the development of the economy, the major needs of the country, and the health and safety of our people, we must improve the management of science and technology plans to ensure that they are forward-looking and play a guiding role in basic research, interdisciplinary frontier areas, and key fields. We must reinforce the principal role of enterprises in innovation, strengthen enterprise-led collaboration between industries, universities, and research institutes, and allow public institutions engaged in scientific research to implement a more flexible management system as compared to general public institutions, so that they can explore approaches to instituting corporate management. We must also give scientists and engineers a greater say in the distribution of gains from the transfer of their scientific and technological advances and deepen reforms to grant researchers corresponding rights over scientific and technological outputs.

Regarding deepening institutional reforms for talent development, we must make our policies on talent more proactive, open, and effective. We need to step up efforts to build a contingent of personnel with expertise of strategic importance, enhance the mechanisms for identifying, selecting, and training young innovators, and refine incentive mechanisms for talent, giving greater influence to employers and creating a more accommodating environment for talent development. We must also improve support mechanisms for recruiting talent from overseas and explore avenues for establishing an immigration system for highly skilled personnel.

We must improve macroeconomic governance

Sound macro regulation, along with effective governance by the government, is essential for ensuring that we can fully leverage the institutional strengths of our socialist market economy.

In terms of deepening reform of the fiscal and tax systems, we must improve the relationship between central and local governments, place more fiscal resources at the disposal of local governments by expanding sources of tax revenue at the local level, and ensure that the fiscal resources of prefecture- and county-level governments are commensurate with their administrative powers. The central government must hold more fiscal powers as appropriate and raise the proportion of central government expenditure accordingly, while no requirements for supporting funds from local governments in violation of regulations shall be made.

Regarding reform of the financial system, we must actively develop technology finance, green finance, inclusive finance, pension finance, and digital finance. We need to improve the functions of the capital market to give balanced weight to investment and financing, improve the financial regulatory system, and strengthen financial security mechanisms as we open our doors wider to the outside world.

To improve mechanisms for implementing the coordinated regional development strategy, we must develop a regional economic layout and a territorial space system characterized by complementarity between different regions and territorial spaces and refine the system for functional zoning. We must improve integrated regional development mechanisms, introduce new mechanisms for cooperative development across administrative divisions, and enhance institutions and mechanisms for promoting the marine economy.

Following more than four decades of rapid development in China under the policy of reform and opening up, the prosperity of our society has grown and our economy has utilized idle and existing resources, but we must improve the allocation of newly acquired resources while adjusting the mix of existing resources as well as explore the introduction of national macro balance sheet management.

We must promote integrated urban-rural development

Integrated urban and rural development is essential to Chinese modernization. It is also an inherent requirement for realizing people’s aspirations for a better life and promoting common prosperity.

With regard to improving the institutions and mechanisms for advancing new urbanization, we must put in place mechanisms to foster positive interactions between the processes of industrial upgrading, population concentration, and urban development. We must implement systems for allowing people to obtain household registration and access basic public services in their place of permanent residence. The process of granting permanent urban residency to people moving from rural to urban areas must also be accelerated. Moreover, we need to protect the lawful land rights and interests of former rural residents who now hold permanent urban residency and protect, in accordance with the law, their rights to contract rural land, to use their rural residential plot, and to share in the proceeds from rural collective undertakings.

In terms of consolidating and improving the basic rural operation system, we need to move forward with well-organized trials to extend rural land contracts by another 30 years upon the expiration of second-round contracts and deepen the reform to separate ownership rights, contract rights, and management rights of contracted land.

Regarding improving supporting systems to strengthen agriculture, benefit rural residents, and enrich rural areas, we must improve the investment mechanisms for rural revitalization, refine the regular mechanisms for preventing rural residents from relapsing into poverty, and establish a system of multi-tiered and categorized support for low-income rural residents and underdeveloped areas. We need to improve long-term mechanisms for promoting all-around rural revitalization and coordinate efforts to establish an inter-provincial mechanism for major grain-purchasing areas to compensate major grain-producing areas, so as to make substantive headway in incentivizing the latter.

In order to deepen reform of the land system, we must reform and refine the system for offsetting cultivated land that has been put to other uses; improve the mechanisms for developing, verifying, managing, and protecting high-standard cropland; and optimize land management. We need to promote mixed land development and use and allow for changes in land use purposes when appropriate, ensuring that idle and inefficiently used land can be put to better use. We need to formulate policies for extending land use rights for industrial and commercial purposes and for renewing them upon expiration.

We must pursue high-standard opening up

Opening up is a defining feature of Chinese modernization. We must remain committed to the basic state policy of opening to the outside world, increase our capacity for opening up while expanding international cooperation, and develop new institutions for a higher-standard open economy.

We must further reform the management systems for inward and outward investment, remove all market access restrictions in the manufacturing sector, and open up sectors such as telecommunications, the internet, education, culture, and medical services further in a well-conceived manner. We need to improve relevant measures to make it more convenient for people from outside the mainland to live, access medical services, and make payments on the mainland, as well as strive to attract and utilize foreign investment.

We need to optimize the layout for regional opening up, including accelerating all-around opening up with links running eastward and westward, across land, and over sea, in order to develop a diverse array of pacesetters for opening up.

We must improve the mechanisms for high-quality cooperation under the Belt and Road Initiative, including coordinated efforts to advance both major signature projects and “small but effective” public welfare projects.

We must ensure and improve the people’s wellbeing

Ensuring and enhancing the people’s wellbeing in the course of development is one of the key tasks of Chinese modernization.

In order to improve the income distribution system, we must build an institutional framework under which primary distribution, redistribution, and tertiary distribution are well coordinated and mutually complementary, as well as put systems in place to boost the incomes of low-income earners, steadily expanding the size of the middle-income group, and properly regulating excessive incomes, thereby creating a distribution pattern of predominantly middle-income earners that gradually leads to common prosperity.

With regard to improving the employment-first policy, we must develop sound mechanisms for promoting high-quality and full employment, enhance the system of lifelong vocational skills training, coordinate urban and rural employment policies, and refine the mechanisms for promoting equal opportunities.

In terms of improving the social security system, we need to build a sound social security system to serve people in flexible employment, rural migrant workers, and those in new forms of employment, improve policies for transferring social security accounts, step up the construction and supply of government-subsidized housing, and quickly establish a new development model for the real estate sector.

Regarding implementing further reforms to the medical and healthcare systems, we must improve the public health system, support coordinated development and governance of medical services, medical insurance and pharmaceuticals, deepen the reform of public hospitals to make them better serve the public interest, and guide and better regulate the development of private hospitals.

In terms of improving the systems for supporting population development and providing related services, we must provide full life-cycle population services to all in order to promote high-quality population development, refine the policy system and incentive mechanisms for boosting the birth rate, work to build a pro-childbirth society, and enhance policies and mechanisms for developing elderly care programs and industries.

We must deepen reform in ecological conservation

Chinese modernization is the modernization of harmony between humanity and nature.

We need to ramp up the green transition in all areas of economic and social development by improving the basic systems for ecological conservation, environmental governance systems, and the mechanisms for green and low-carbon development, enhancing our ecological conservation systems.

We must implement fiscal, tax, financial, investment and pricing policies as well as standards to support green and low-carbon development, accelerate the planning and development of a new type of energy system, and put in place new mechanisms to facilitate the transition from controlling the total amount and intensity of energy consumption to controlling the total amount and intensity of carbon emissions. To create the safeguards needed to advance actively yet prudently toward reaching peak carbon emissions and carbon neutrality and develop new strengths in green and low-carbon development, we need to establish a carbon emissions statistics and accounting system, a carbon labeling and certification system, as well as a carbon footprint management system and improve the cap-and-trade system for carbon emissions and the trading system for voluntary greenhouse gas emissions reduction. 

Editor: Li Xiaoqiong