Injecting Strong Power into Promoting High Quality Development: A Review of the Achievements of Economic System Reform Since the Third Plenary Session of the 18th Central Committee of the Communist Party of China
2024-07-04
Economic system reform is the key to comprehensively deepening reforms.
The Third Plenary Session of the 18th Central Committee of the Communist Party of China made multiple reform deployments, including deepening economic system reform around the decisive role of the market in resource allocation, adhering to and improving the basic economic system, accelerating the improvement of modern market system, macroeconomic regulation system, and open economic system, outlining the basic framework for deepening economic system reform.
Play a decisive role in the market and unleash development vitality
At present, the peak summer season is approaching, and the electricity market is receiving much attention.
On June 17th, the Shandong electricity spot market went from trial operation to official operation, becoming the third electricity spot market in China to become a regular one. At the same time, the new basic rules for the operation of the electricity market will be officially implemented on July 1st.
Relying on sensitive price signals to guide the coordinated efforts of "source network load storage" to ensure power supply, since the new round of power system reform, the proportion of market-oriented trading electricity in China has significantly increased. As of the end of 2023, the national electricity market has traded 5.67 trillion kilowatt hours of electricity, accounting for 61.4% of the total electricity consumption in society.
Price is the "signal light" of market changes and the "baton" of market regulation. Up to now, more than 97% of the prices of goods and services in China are determined by the market, which reflects that the market plays a more significant role in determining the price of goods and services.
"Economic system reform is the key to comprehensively deepening reforms, and the core issue is to handle the relationship between the government and the market well, so that the market can play a decisive role in resource allocation and better play the government's role."
The difference between elevating the role of the market from "fundamental" to "decisive" reflects the new height of our party's understanding of the role of the market, marking a new stage in the development of socialist market economy.
Managing the relationship between the government and the market is a world-class challenge and a core issue in China's economic system reform.
Theoretical innovation leads to a leap in practice.
For over a decade, the Central Committee of the Communist Party of China has firmly grasped the core issue of handling the relationship between the government and the market, continuously improved the basic socialist economic system, accelerated the improvement of the socialist market economic system, and adhered to the "two unwavering principles". The decisive role of the market in resource allocation has become more prominent, and the role of the government has become more effective.
For the first time, incorporating data into production factors and promoting market-oriented reforms of factors such as land, labor, capital, technology, and data;
Improve the basic system of market economy, including property rights protection, market access, fair competition, and social credit, and steadily promote the construction of a high standard market system;
Remove institutional and institutional barriers that hinder the free flow of factors, and promote the realization of factor price market determination, autonomous and orderly flow, and efficient and fair allocation;
……
A series of unprecedented and groundbreaking reform measures have been implemented and blossomed, activating the vitality of various business entities, institutional vitality, and social creativity.
As of the end of 2023, there were 184 million registered business entities, including over 53 million private enterprises, an increase of 2.3 times and 3.9 times respectively compared to 2012. From 2012 to 2023, the total R&D investment in society increased from 1.03 trillion yuan to 3.3 trillion yuan, accounting for 2.64% of the gross domestic product, exceeding the average level of EU countries. The construction of an innovative country has achieved significant results.
In the autumn of 2019, at the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, "public ownership as the mainstay, multiple forms of ownership developing together, distribution according to work as the mainstay, multiple forms of distribution coexisting, and the socialist market economy system" became a new summary of the basic socialist economic system. This "trinity" framework marks a more mature and established economic system in China.
Continuously innovating and improving macroeconomic regulation, strengthening policy coordination and cooperation in finance, currency, employment, industry, investment, and other areas; Deepen the reform of the fiscal and taxation system, optimize the combination of special bonds, treasury bond, tax incentives, financial subsidies and other policy tools; Deepen the reform of the financial system and guard against the bottom line of systemic risks; Deepen the reform of the scientific and technological system, and form a basic system that supports comprehensive innovation
In 2023, the gross domestic product exceeded 126 trillion yuan, with a growth rate ranking among the world's major economies. Over the years, it has contributed over 30% to global economic growth.
Continuously optimizing economic structure and accumulating development momentum
Entering Tianjin Rongcheng United Iron and Steel Group Co., Ltd., hydrogen heavy-duty trucks are bustling, with hundreds of acres of photovoltaic panels neatly arranged and densely distributed data collection points in the factory area, transmitting data in real-time to the smart center. Not long ago, this place was rated as a "benchmark enterprise for green development".
Eliminating outdated production capacity, improving production efficiency, and accelerating green and intelligent transformation... The steel industry is making a bold move to reduce production capacity, adjust structure, and accelerate the pace of transformation and upgrading, which is a microcosm of China's deepening of supply side structural reform, transformation of development mode, optimization of economic structure, and transformation of economic vitality.
The problem is the call for reform.
Returning to 2012, bidding farewell to double-digit high growth, China's economic growth rate fell below 8% for the first time in the new century. During the same period, deep-seated structural contradictions accumulated over a long period of time continue to emerge.
From judging that China's economic development is in the stage of "three phases overlapping" to proposing a new normal, from implementing the new development concept to promoting supply side structural reform, and then to clearly transitioning from a high-speed growth stage to a high-quality development stage... Our party makes timely scientific judgments on the economic situation and continuously uses reform methods to solve problems in development.
Afterwards, the supply side structural reform, like a main thread, runs through all aspects and stages of comprehensive deepening reform.
The 23rd meeting of the Central Leading Group for Comprehensive Deepening of Reform pointed out that "the supply side structural reform is interconnected with the comprehensive deepening of reform and the implementation of the new development concept, with the core being institutional and mechanism innovation";
The 19th National Congress of the Communist Party of China clearly stated that "taking supply side structural reform as the main line, promoting changes in the quality, efficiency, and driving force of economic development, and improving total factor productivity";
The 20th National Congress of the Communist Party of China emphasized the organic combination of implementing the strategy of expanding domestic demand with deepening supply side structural reform;
……
The Central Committee of the Communist Party of China has evaluated the situation and focused on solving the structural contradictions and institutional obstacles that constrain high-quality development. It has formed a policy framework guided by the new development concept and with supply side structural reform as the main line, promoting economic structural adjustment and the transformation of old and new driving forces, and firmly embarking on a path of higher quality, higher efficiency, and more sustainable development.
Continuous upgrading of industrial structure——
Deepen the promotion of "three reductions, one reduction, and one supplement" to optimize resource allocation, accelerate the transformation of traditional industries, promote the vigorous development of emerging industries, and continuously expand the scale of the service industry. From 2012 to 2023, the added value of high-tech manufacturing and equipment manufacturing industries accounted for 15.7% and 33.6% of the industrial added value above designated size, respectively, from 9.4% and 28%; The proportion of added value in the service industry has increased from 45.5% to 54.6%.
Continuous improvement of demand structure——
We will firmly grasp the strategic starting point of expanding domestic demand, actively build a long-term mechanism to expand domestic demand, promote smoother domestic circulation, more efficient connectivity between domestic and foreign markets, and focus on playing the fundamental role of consumption and the key role of investment. The contribution rate of domestic demand to economic growth has increased from 105.8% in 2012 to 111.4% in 2023.
Gradual optimization of regional structure——
The coordinated development of Beijing Tianjin Hebei has reached a new level, the Yangtze River Economic Belt has spread a high-quality development picture, and the construction pace of the Guangdong Hong Kong Macao Greater Bay Area has accelerated... New urbanization and rural revitalization resonate with each other, and major regional strategies are advancing in depth. The urbanization rate of China's permanent population has increased from 52.57% in 2012 to 66.16% in 2023, with each high-quality development and growth pole accelerating its rise.
Plan according to the situation, respond to the situation, and follow the trend, while continuing to move towards "new" supply side structural reform.
Deepen the reform of the science and technology system, education system, talent system, etc., and break through the bottlenecks that hinder the development of new quality productive forces.
At present, anchoring the development of new quality productive forces according to local conditions, continuously deepening supply side structural reforms across the country, accelerating the construction of new production relations that are compatible with new quality productive forces, continuously opening up new fields and tracks for development, and continuously shaping new driving forces and advantages for development.
Building a New Open Economic System and Expanding Development Space
There are over 70000 foreign-funded enterprises in Shanghai, with 6017 new foreign-funded enterprises established in 2023 alone, a year-on-year increase of 38.3%. The actual use of foreign investment has exceeded 24 billion US dollars, setting a new historical high.
190 items have been reduced to 27, manufacturing items have been cleared, and the service industry has continued to expand and open up... Currently, the negative list of foreign investment access in the Shanghai Pilot Free Trade Zone is only a thin two pages.
This is the starting point for building a "reform experimental field" in the pilot free trade zone. On September 29, 2013, China's first free trade pilot zone was established in Shanghai. Subsequently, the Special Management Measures for Foreign Investment Access in the China (Shanghai) Pilot Free Trade Zone (Negative List) (2013) were released, which for the first time used negative lists to manage foreign investment in China, quickly igniting market enthusiasm.
The establishment of the first pilot free trade zone coincides with the upcoming Third Plenary Session of the 18th Central Committee of the Communist Party of China, which has become a vivid footnote to the comprehensive deepening of reform.
The upcoming plenary session made the Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening Reform, specifically proposing in the section on "Accelerating the Improvement of the Modern Market System" to "implement a unified market access system, and on the basis of formulating a negative list, all types of market entities can enter areas outside the list on an equal basis in accordance with the law. Explore the management model of implementing pre access national treatment plus negative list for foreign investment.".
We need to accelerate our transition from a trading power to a trading powerhouse. Currently, China has maintained its position as the largest country in goods trade for 7 consecutive years, and its international market share in exports has remained the top in the world for 15 consecutive years. It is a major trading partner of more than 140 countries and regions, attracting foreign investment and foreign investment, both ranking among the top in the world.
"The door of China's opening will not be closed, but will only open wider and wider" - In the face of the adverse wind of globalization, China has actively promoted bilateral, regional and multilateral cooperation. It has signed 22 free trade agreements with 29 countries and regions, signed more than 230 cooperation documents with more than 150 countries and 30 international organizations to jointly build the "the Belt and Road", and successfully held a series of international economic and trade events such as the Expo, the Canton Fair, and the Service Trade Fair.
Reform inevitably requires openness, and openness also inevitably requires reform.
Building a new high-level open economy system is our proactive strategic measure to promote reform and development through openness.
Intensify efforts to attract and utilize foreign investment, implement the Foreign Investment Law, revise and expand the Catalogue of Industries Encouraging Foreign Investment, and continuously reduce the negative list of foreign investment access;
The number of pilot free trade zones has been upgraded and expanded to 22, and a total of 349 innovative achievements in the system of pilot free trade zones have been replicated and promoted at the national level;
Create a market-oriented, legal, and internationalized first-class business environment, and strengthen institutional arrangements in market transparency, intellectual property rights, environmental protection standards, and other aspects;
High level implementation of the Regional Comprehensive Economic Partnership (RCEP), proactive integration with international high standard economic and trade rules such as the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) and the Digital Economy Partnership (DEPA)
For over a decade, China has been steadfastly building a new system of high-level open economy, accelerating the promotion of institutional openness in rules, regulations, management, standards, and other areas. With high-level openness, it promotes deep level reforms and contributes Chinese wisdom and solutions to global economic openness and cooperation.
Deepening reform will not stop, and expanding opening up will not stop.
Edit：He Chuanning Responsible editor：Su Suiyue
Source：Xinhua
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