Zhang Xu: Strengthening the Capacity to Grasp and Apply Objective Laws [1]
Currently, the deepening adverse effects brought about by changes in the external environment mean that the operation of the Chinese economy still faces considerable difficulties and challenges. However, it must also be seen that the economic base of China is stable, its advantages are numerous, its resilience is strong, and its potential is vast; the supporting conditions and fundamental trend of long-term improvement remain unchanged. The Central Economic Work Conference [2] emphasized five areas that "must be well-coordinated" [3], providing important guidance for transforming positive factors from all sectors into actual developmental performance.
First, we must well-coordinate the relationship between an effective market and a capable government, forming an economic order that is both "dynamic/unfettered" and "under control."
Ensuring the market plays the decisive role in resource allocation while better exerting the role of the government is not only a great theoretical innovation but also an objective law that must be followed in building a high-level socialist market economy system.
A high-level socialist market economy system is a crucial guarantee for Chinese-path modernization. We must better utilize market mechanisms, create a fairer and more vital market environment, and achieve the optimization of resource allocation efficiency and the maximization of benefits. This means creating an environment that is both "dynamic" and "under control," better maintaining market order, remedying market failures, unblocking the circulation of the national economy, and stimulating the endogenous momentum and innovative vitality of the entire society.
Only by following the general laws of the market economy—wherein the market plays the decisive role—while simultaneously avoiding the defects of the capitalist market economy and better exerting the role of the Party and the government, can we fully utilize the dual advantages of market mechanisms and government governance. This ensures both the vitality of economic development and the correct direction of that development.
Second, we must well-coordinate the relationship between total supply and total demand to unblock the circulation of the national economy.
At present, the difficulties and challenges facing economic operations involve both issues of total supply and issues of total demand. From the perspective of total supply, the primary tasks are improving quality and efficiency in industrial development and resolving the problem of overcapacity in certain sectors. From the perspective of total demand, the main issues are a slowdown in investment, insufficient consumption, and weak exports.
The Central Economic Work Conference identified "vigorously boosting consumption, improving investment efficiency, and expanding domestic demand in an all-round way" as the top priority among the nine key tasks for economic work in 2025. It proposed a series of measures such as implementing special actions to boost consumption, increasing the scope of "Two New" [4] policies, and providing greater support for "Two Major" [5] projects. These are intended to continuously increase total demand.
Third, we must well-coordinate the relationship between fostering new momentum and renewing old momentum, developing new quality productive forces according to local conditions.
The transition between new and old growth drivers is a practical issue that economic development inevitably faces at a certain stage. Its essence is a process of providing new impetus for economic development through various forms of innovation, including institutional and scientific-technological innovation.
High-quality development is the primary task in building a modern socialist country in all respects. We must improve the incentive and restraint mechanisms for promoting high-quality development and develop new quality productive forces according to local conditions. Scientific-technological innovation can spawn new industries, new models, and new momentum; it is the core element for developing new quality productive forces. Next, we must deepen reforms in the economic and scientific-technological systems, focusing on clearing "blockages" and "bottlenecks" [6] that restrict the development of new quality productive forces.
Fourth, we must well-coordinate the relationship between optimizing "incremental" assets and revitalizing "stock" assets to comprehensively improve resource allocation efficiency.
Both "stock" (existing assets) and "incremental" (new additions) are basic resources for economic development. In fact, if stock assets are continuously optimized and circulated, they can also create increments, thereby enriching disposable resources and better meeting the needs of economic and social development and the people's yearning for a better life.
Under the new situation, we must continuously improve the efficiency and level of resource allocation by optimizing increments and revitalizing stocks. We must ensure that various stock policies and incremental policies are fully implemented, creating a "combined punch" [7] of measures. We should strengthen the coordination between policies and reform-and-opening-up measures, improve effective communication and consultation-feedback mechanisms between departments, and integrate economic and non-economic policies into a unified assessment of macro-policy orientation consistency. On this basis, through further comprehensively deepening reform, we will drive resource allocation to achieve maximum benefit and optimal efficiency according to market rules, market prices, and market competition.
Fifth, we must well-coordinate the relationship between improving quality and expanding total volume, thereby consolidating the material foundation of Chinese-path modernization.
Improving quality and expanding total volume reflects the essential requirements of grasping the New Development Stage, implementing the New Development Philosophy, and constructing the New Development Paradigm [8]. We must speed up the construction of a modernized economic system, focus on increasing total factor productivity, focus on enhancing the resilience and safety levels of industrial and supply chains, focus on promoting urban-rural integration and coordinated regional development, and promote the economy to achieve an effective improvement in quality and a reasonable growth in quantity.
Ultimately, whether we can steer the world's second-largest economy well and maintain sustained and healthy economic and social development fundamentally depends on whether the Party's role as the leadership core in economic and social development is exercised effectively. Leading officials at all levels must strengthen their study, research, and thinking, as well as their practical experience. They must enhance their ability to grasp and apply the laws of the market economy, the laws of social development, and the laws of nature, striving to become experts [9] in leading economic and social development.
(The author is the Director and Researcher of the Political Economy Research Office at the Institute of Economics, Chinese Academy of Social Sciences)
Source: Jiefang Daily (January 7, 2024)
Web Editor: Hui Hui