Reform helps China build high-standard market economy

Abstract: Global Times on Thursday published an article Reform helps China build high-standard market economy, compiled based on a speech by Liu Shijin, vice chairman of the Committee for Economic Affairs of the Chinese People's Political Consultative Conference and vice president of the China Development Research Foundation, at the 9th Caixin Summit on Nov. 20. The article pointed out that in the face of a complicated situation that hasn't been seen in many years, setting the goals of creating a high-standard market economy and achieving high-level openness to the outside world will enable China to lead the development of the global market economy, with confidence in the domestic economy also stabilizing.

The full text of the article is as follows:

The Chinese economy is facing a complicated situation that hasn't been seen in many years, given the major adjustments to the international trade and investment order, the ongoing China-US trade war, low confidence among China's private enterprises, and the weak outlook of the domestic economy.

Before addressing these problems, it's necessary to develop a basic understanding of China's socialist market economy at the current stage.

After four decades of reform and opening-up, China has achieved great success, which should be mainly attributed to the improved socialist market economic system, the decisive role the market plays in resource allocation, the expansion of opening-up, and the protection of property rights, especially intellectual property rights (IPR).

The country's achievements didn't stem from development plans and industrial policy characterized by the planned economy, or the monopoly of State-owned enterprises (SOE).

But the construction of China's market economy hasn't been completed. China's commodity market has been mostly marketized, but the degree of marketization in its factor market is still not high. This situation has aroused some criticism in the international arena. For example, some Western countries don't recognize China as a market economy under the WTO system. Meanwhile, the Chinese economy is shifting from high-speed growth to high-quality development, which requires a high level of opening-up. All these trends are prompting the government to establish a high-standard, high-level and high-quality market economy.

Nevertheless, there are still many difficulties in building a high-standard market economy. Issues like breaking administrative monopolies, fair competition, SOE reform, transforming government functions and industrial policies, protection of IPR, safeguarding the rights and interests of workers, protecting the environment, and green development are all problems that China must resolve to move toward a high-standard market economy from a low-level one.

We are not forced by others to push forward with reforms, but we are instead taking the initiative to improve our own problems. Without IPR protection, for example, innovation cannot really develop in China.

Our goals are to establish a high-quality market economy and achieve high-level openness to the outside world. Such goals will help China effectively cope with trade friction with the US and major adjustments to the global trade and investment situations. These goals will also have a positive impact on domestic confidence and economic expectations. China could create a favorable international environment and generate important development opportunities.

China has been a major beneficiary of the market economy and globalization. Although China is a latecomer, the development of its market economy, has also contributed a lot to the global market economic system over the years. We have every reason to develop a high-standard market economy achieve a high level of openness to the outside world, so as to get the upper hand in the competition and development of the global market economic system.

There will be more changes to the international and domestic situations. In the international arena, WTO reform is imperative. Also, investment and trade rules will see major adjustments, and major economies will establish zero-tariff trade zones.

China's economy will shift from high-speed growth to high-quality growth. In the face of such a complex situation, setting the goals of creating a high-standard market economy and achieving high-level openness to the outside world will enable China to lead the development of the global market economy, with confidence in the domestic economy also stabilizing.

To achieve the "double high" goal, we must integrate Chinese characteristics into the market economy to enhance our competitive edge. We need both top-down management and grass-roots tests. With the direction and bottom line set by the top level, we should encourage local, social, corporate and personal enthusiasm, and in this way, find the proper solutions through trial and error.

Actions speak louder than words. We need to take substantial steps in building a high-standard market economy by pushing forward reform in such areas as SOEs, land, finance, fiscal policies, taxes and the social security system.