Chinese President Xi Jinping attached importance to two points in his speech during the two sessions of the National People's Congress and the Chinese People's Political Consultative Conference this year: Better respecting the law of the market and giving better play to the role of the government.
At the Third Plenary Session of the 18th CPC Central Committee, he emphasized that the market should play a decisive role in allocating resources and clearly pointed out that China implements a socialist market economy.
He said we should still insist on giving full play to the superiority of the socialist system as well as the positive role of the Party and the government, and that letting the market decide does not mean letting it decide all.
To realize the two centenary goals set by the 18th National Congress of the CPC - completing the building of a moderately prosperous society in all respects by the 100th anniversary of the CPC and turning China into a socialist modern country that is strong, prosperous, democratic, culturally advanced and harmonious by the centenary of the PRC - we should further stimulate the reform and opening-up policy in economic development by increasing public participation in reform, while at the same time promoting China's macroeconomic regulations with improvements in government efficiency and performance.
This is not only directly pertinent to economic growth, restructuring and efficiency improvement, but also deals with problems with people's livelihoods via market mechanisms. These problems include soaring property prices, high medicine prices, unauthorized price rises, low welfare, huge income disparity, difficulty in employment, food safety, corruption, frequent conflicts between employers and employees, and poor quality of education and urbanization.
The theory of the market's decisive role with Chinese socialist characteristics is totally different from the role of the market in neoliberalism. The former has five essential characteristics.
First, China's theory of the market's decisive role coexists with State macroeconomic and micro regulations.
Second, it is limited only to short-term allocation of general resources, not to long-term allocation of special resources including hidden ones and general resources.
Third, the allocation of culture, education and other intangible resources is decided by corresponding market mechanisms instead of the market.
Fourth, we shall continue adhering to the dominant position of public ownership and the leading role of State-owned economy, and embody this principle in our market economic system and activities all the time.
Finally, the market and the government should play their respective roles in wealth and income distribution, with the former playing a bigger part in the primary distribution of national income and the latter a greater say in the redistribution.
Therefore, the Third Plenary Session is of great significance in stressing that the decisive role of the market and the improvement of the government's role should be viewed as an organic whole. The market is expected to work where the government adjustment fails and vice versa, so as to create an architecture accommodating a strong market and a highly efficient government.
However, this does not mean that China is carrying out "semi-liberal and semi-dirigist economy," "crony capitalism," or "State capitalism," or that it just focuses on the so-called "modern market economic institution" without State regulation, as claimed by some theorists for the market's decisive role in neoliberalism.
China has been taking necessary macroeconomic and micro regulation seriously without getting mired in the market fundamentalism criticized by Keynesians.
The author is a member of the Presidium of the Chinese Academy of Social Sciences (CASS) Academic Divisions, and director of the Academic Division of Marxist Studies, CASS. opinion@globaltimes.com.cn