The Third Plenary Session of the 20th CPC Central Committee Has Launched a New Round of Economic System Reform in China - 2024-07-23
The third plenary session of the 20th Central Committee of the Communist Party of China (CPC) has made systematic arrangements to further deepen comprehensive reforms, proposing reform tasks in 14 aspects. These reforms are not just about policy adjustments; they aim to transform the economic system and key institutions, emphasizing the direction of "regarding economic structural reform as the spearhead." It is particularly noteworthy that the meeting set a "deadline" for the completion of tasks, with all reform tasks expected to be completed by 2029, demonstrating a strong will and execution capability.
"Building a high-level socialist market economy system" is the first among this set of reform tasks. "It is imperative to better leverage the role of market mechanisms to create a more equitable and dynamic market environment, achieving the optimization of resource allocation efficiency and the maximization of benefits." Here, the dual objectives of the socialist market mechanism are highlighted: not only to enhance the efficiency of resource allocation but also to consider broader benefits. Both the vitality of the market and fairness must be ensured. Over the past few decades, major countries around the world have generally faced the challenge of widening income gaps and intensifying social inequality. The dual objectives set in the first reform task underscore that the starting point and the ultimate objectives of the reform are "greater social fairness and justice and improvements in the people's wellbeing."
Enterprises are the mainstay of the market economy. In every significant meeting, the articulation of the relationship between the public and non-public sectors of the economy has always been a focal point of concern for both domestic and international circles. This plenary session once again reaffirmed the "two unswervings," which means unswervingly consolidating and developing the public ownership economy, and unswervingly encouraging, supporting, and guiding the development of the non-public ownership economy. Specifically, it is stated that "economic entities under all forms of ownership have equal access to factors of production in accordance with the law, compete in the market on an equal footing, and are protected by the law as equals." This implies that non-public economic entities, including private enterprises, will compete on an equal footing with public ownership enterprises in terms of financing, credit enhancement, and the use of factors of production such as scientific research infrastructure, based on the law. The aim is to support and guide various enterprises to improve the efficiency of resource utilization and to accelerate the construction of more world-class enterprises.
"Perfecting the system and mechanism for promoting high-quality economic development" is the second aspect of this set of reforms, with the key being to "improve the institutions and mechanisms for fostering new quality productive forces in line with local conditions," focusing on the development of productive forces characterized by high technology, high efficiency, and high quality. Adapting to local conditions means that each region should leverage its comparative advantages, resource conditions, and industrial foundations to selectively promote the development of new industries, new models, and new drivers of growth. It is also necessary to encourage and regulate the development of angel investment, venture capital, and private equity investment to guide the healthy and orderly development of emerging industries through market-oriented means. As the vanguard of China's reform and opening up, a hub for talent, and a center for the convergence of financial and other resources, Shanghai is accelerating the construction of a center for technological innovation. Artificial intelligence is a strategic industry that Shanghai is focusing on promoting. With the recent World Artificial Intelligence Conference held at the beginning of the month as a benchmark, Shanghai is gathering top global talent and resources, building an industrial ecosystem, developing a rich array of application scenarios, and forming an artificial intelligence innovation hub with international competitiveness.
Ninghua Zhong, Yilei Qian
School of Economics and Management, Tongji University
Source: Touch Shanghai
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