China’s Reforms Heading in the Right Direction
In recent years, some Western media outlets have speculated about China’s reforms “stalling” or even “backsliding,” citing phrases like “state advances and private sector retreats” and “private sector exit.” However, the measures for deepening reforms outlined at the third plenary session of the 20th Central Committee of the Communist Party of China (CPC), which concluded on July 18, indicate that China’s reforms are progressing in a positive direction.
Strengthening the State-Market Relationship
At the core of China’s socialist market economy reforms is the relationship between the state and the market. A communique adopted at the session emphasized the importance of a high-standard socialist market economy as an essential guarantee for Chinese modernization. The communique stated, “We must 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 will lift restrictions on the market while ensuring effective regulation, striving to better maintain order in the market and remedy market failures.”
State-owned, private, and foreign-funded enterprises all play indispensable roles in China’s economic development. President Xi Jinping stressed, “We will unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector… enabling entities under different forms of ownership to complement each other and develop side by side.”
Innovation by State-Owned Enterprises
China’s state-owned enterprises (SOEs) have faced criticisms of being “big but not strong enough” and “big but not good enough.” In response, China has placed independent innovation at the core of SOE development, maximizing policies that incentivize innovation. In 2023, central SOEs invested 1.1 trillion yuan ($137.8 billion) in research and development.
Since the 18th National Congress of the CPC in 2012, SOEs have pursued breakthroughs in key technologies, achieving significant advancements. For example, Shenzhen Jinzhou Precision Technology Co., affiliated with China Minmetals, developed a milling cutter with a diameter of 0.01 millimeters—about one-eighth the thickness of a strand of hair—the smallest in the world, capable of milling 56 Chinese characters on a single grain of rice.
China has also been promoting modern corporate systems in SOEs to bolster their vitality. Since 2013, the restructuring and reorganization of SOEs have attracted non-state investments of over 2.5 trillion yuan. Currently, mixed-ownership enterprises account for over 70% of central enterprises and over 54% of local SOEs, leading to improved corporate governance, increased operational standards, and enhanced efficiency.
Supporting Private Enterprises
Private enterprises are a vital force for China’s high-quality development. Recognizing that some private enterprises still face heavy tax burdens and lack strong policy support, the government is taking steps to provide timely relief. President Xi Jinping likened these challenges to “three mountains”—the iceberg in markets, the steep mountain in financing, and the volcano in transformation—and “three gates”—the glass door, the spring door, and the revolving door—that need to be removed.
By addressing these obstacles, China aims to foster a fairer and more dynamic market environment, unleashing the internal driving forces and creativity of society as a whole.
Reference(s):
cgtn.com
