Cheng Yanjun and Cheng Hao: Discussing Comprehensive Deepening of Reform with Professor Wu Jinglian through the Study of Xi Jinping's Speeches and Central Committee Spirit

Cheng Yanjun and Cheng Hao: Discussing Comprehensively Deepening Reform with Professor Wu Jinglian Based on the Study of Xi Jinping’s Key Speeches and Central Committee Directives ^[1] —Can We Mechanically Adopt Western Models under the "Guidance of Western Theory"?

Currently, the training of cadres nationwide—including faculty and staff across the Party school system—is focused on deeply studying the spirit of the Central Committee in connection with practical realities, specifically General Secretary Xi Jinping’s series of speeches and the Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening the Reform from the Third Plenary Session of the 18th CPC Central Committee. During this process, many have expressed doubts regarding the research of Professor Wu Jinglian (hereafter referred to as Mr. Wu). We are now publishing several questions on matters of principle that have universal significance, and we invite Mr. Wu to publicly clarify these doubts.

It should be noted that we are doing this not only because it is impossible to consult Mr. Wu directly, but more importantly, because of his extraordinary influence on reform and opening up. This influence was lauded by Mr. Wu’s friends at the "Launch of the Collected Works of Wu Jinglian and Seminar on China’s Reform": "He is a very important standard-bearer"; "He is a scholar of economics who calls for constitutionalism"; "The cause he promotes is indeed the core of China"; "Everyone's reform now, to put it bluntly, is to allow China's national capital to escape the devastation of bureaucratic capital"; "He has set an example for everyone not only in China's market-oriented reform and opening up, but also in China's various reforms regarding the legal system and constitutionalism." From March 2012, when he called to "strengthen top-level design to further advance reform," throughout 32 years, he has "consistently adhered to one set of ideas and one proposition, and advanced them with unwavering determination—this is something everyone should learn from." ^[2] This consistent use of "Western theory as guidance" to study reform and opening up for over 30 years proves that Mr. Wu is indeed the "standard-bearer" of neoliberalism in our country. ^[3]

I. Can Neoliberalism be Enshrined as the Infallible Guide for Comprehensively Deepening Reform?

The day after the Decision of the Third Plenary Session of the 18th CPC Central Committee was passed, Investment Times published a vivid portrayal by Ma Guochuan of Mr. Wu enshrining neoliberalism as the infallible guide for reform and opening up. Using the viewpoints of Milton Friedman (a representative figure of neoliberalism who visited China over 30 years ago in 1988) and John McMillan as guidance, Mr. Wu argued that "free competition is the soul of the market system." He advocated that the goal of comprehensively deepening reform is to establish a completely free market economy without macroeconomic regulation, along with a "limited government" and "effective government." ^[4] We will discuss the merits of this view later; the first issue to discuss here is the guiding ideology of reform. Comparing this with the spirit of the Central Committee—which states that comprehensively deepening reform must be guided by Marxism (referring here to Marxism-Leninism, Mao Zedong Thought, and the theoretical system of socialism with Chinese characteristics)—everyone particularly wants to ask Mr. Wu: Why enshrine neoliberalism as an infallible guide? How should we understand the requirement that comprehensively deepening reform must be guided by Marxism?

At the beginning of 2013 (January 5), Xi Jinping delivered an important speech at the Central Party School, emphasizing: "All comrades in the Party must persist in taking Deng小平 Theory, the Theory of 'Three Represents,' and the Scientific Outlook on Development as guidance, and adhere to the principle that practice is the sole criterion for testing truth." He added, "Socialism with Chinese characteristics is socialism and not any other 'ism.' The basic principles of scientific socialism cannot be lost; if they are lost, it is no longer socialism." ^[5] At the end of the year, the Decision of the Third Plenary Session of the 18th CPC Central Committee reiterated: "To comprehensively deepen reform, we must hold high the great banner of socialism with Chinese characteristics and be guided by Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the 'Three Represents,' and the Scientific Outlook on Development."

Furthermore, in conjunction with the Decision of the CPC Central Committee on Several Major Issues Concerning Strengthening and Improving Party Building Under the New Situation, we analyzed Mr. Wu’s positioning of neoliberalism as an infallible guide for reform through the lens of the "Four Distinctions." ^[6] We feel that Mr. Wu is not merely failing to draw clear theoretical lines, but has fundamentally abandoned Marxism—especially the basic principles of scientific socialism.

Of course, publishing contrary views the day after the Third Plenary Session's Decision might be a coincidence of timing, but how does one explain the "consistency over 32 years"?

II. What is Meant by "Eliminating the Administrative Monopoly Privileges of State-Owned Enterprises and Certain Non-State Enterprises Favored by Government Officials"?

In the past two years, Mr. Wu has repeatedly emphasized that "China's current economic system is still a mixed system of semi-command and semi-market." He advocates "eliminating the administrative monopoly privileges of state-owned enterprises and certain non-state enterprises favored by government officials" and "implementing constitutionalism," claiming that "the democracy China must choose can only be constitutional democracy." ^[7] To this, everyone has two doubts.

First, a doubt regarding the complexity of the phrase "eliminating the administrative monopoly privileges of state-owned enterprises and certain non-state enterprises favored by government officials." Why can’t it be expressed more plainly? Of course, we recognize that such a complex and obscure sentence does demonstrate Mr. Wu’s profound theoretical and literary level—something average scholars could hardly "wring out" even with painstaking effort.

Second, a doubt regarding comprehension. What does "eliminating state-owned enterprises" mean? Is it total privatization? What are "certain non-state enterprises favored by government officials"? Does this not refer to the existing state power of socialism with Chinese characteristics? If so, then this sentence implies the elimination of the economic base of socialism with Chinese characteristics and the superstructure of state power built upon it through total privatization. Interpreting the sentence this way, the conclusion is: the phrasing is complex and convoluted precisely to cover up what is being revealed! We venture to suggest that because the phrase "eliminating the economic base and state power of socialism with Chinese characteristics" cannot be said directly, yet not saying it would fail to express the true intent, Mr. Wu had to "wring out" such a complex and twisted sentence. This conclusion is based not only on a literal reading but also on the research of Zheng Zhixue, who argues that the "proposition of ‘constitutionalism’ has a very clear target: to cancel the leadership of the Communist Party in China and subvert the socialist regime." ^[8] In other words, people agree with Zheng Zhixue’s straightforward bluntness but disagree with Mr. Wu’s two "eliminations" and his obscure, roundabout expression.

Must state-owned enterprises be "eliminated"? The Decision of the Third Plenary Session of the 18th CPC Central Committee states: "The basic economic system, in which public ownership plays the dominant role and diverse forms of ownership develop together, is an important pillar of the system of socialism with Chinese characteristics and the foundation of the socialist market economy system." It continues, "We must unswervingly consolidate and develop the public sector of the economy, persist in the dominant position of public ownership, give full play to the leading role of the state-owned economy, and continuously enhance the vitality, control, and influence of the state-owned economy." Meanwhile, "We must unswervingly encourage, support, and guide the development of the non-public sector." ^[9] It is clear that state-owned enterprises should not only not be "eliminated," but must be "consolidated and developed" to "continuously enhance their vitality, control, and influence," ensuring their dominant position and leading role in the national economy.

We note that Mr. Wu said this on the eve of the Third Plenary Session, so inconsistency with the Decision does not necessarily imply intentional defiance. However, everyone was quite surprised that Mr. Wu advocated "eliminating" state enterprises while simultaneously emphasizing the implementation of "constitutionalism." As a man of great experience who has researched and lived through these shifts, Mr. Wu should deeply understand that "constitutionalism" is a synonym for the capitalist system and has specific historical connotations. Several centuries of constitutional history prove that the "people" in "sovereignty residing in the people" refers primarily to the big bourgeoisie, not the broad masses. Its tenets—the sacred inviolability of private property, the multi-party system, parliamentary democracy, the separation of powers, and its social ideology—are all without exception designed to maintain the capitalist system and the balance of power and interests among capitalist groups. "Constitutionalism," to put it bluntly and fundamentally, is the use of the state apparatus to solidify capitalist wage-labor relations into law, in the hope of making them eternal. Thus, it is hard to understand why Mr. Wu makes "implementing constitutionalism" the goal of comprehensively deepening reform, as this is almost a total mechanical adoption of the Western model, from the economic system to the political system! In this regard, Deng Xiaoping’s piercing insight is admirable. He said: "The democracy talked about in capitalist society is bourgeois democracy; in fact, it is the democracy of monopoly capital, which is nothing more than multi-party elections, the separation of three powers, and a bicameral system. Our system is the system of People’s Congresses, a system of people's democracy under the leadership of the Communist Party; we cannot do that Western set." ^[10]

III. Was Socialist Construction Before Reform and Opening Up Utterly Indefensible? Can It—or Must It—Be Totally Negated?

This question arose when we studied General Secretary Xi Jinping’s important speech on the inherent consistency of New China’s socialist construction and compared it to Mr. Wu’s view, which totally negates the socialist construction prior to reform and opening up.

Xi Jinping pointed out: "In leading the people in socialist construction, our Party has two historical periods: before reform and opening up, and after reform and opening up. These are two periods that are both interconnected and significantly different, but in essence, they are both practical explorations by our Party in leading the people in socialist construction. Socialism with Chinese characteristics was initiated in the new historical period of reform and opening up, but it was also initiated on the basis of the basic socialist system established in New China and twenty-plus years of construction. Although these two historical periods differ greatly in guiding ideology, principles, policies, and practical work, they are by no means cut off from each other, let alone fundamentally opposed. We cannot use the historical period after reform and opening up to negate the period before, nor can we use the period before to negate the period after." ^[11]

However, Mr. Wu does the exact opposite. He believes that the grand attempt to achieve national rejuvenation through the planned economic system based on public ownership before reform "ended in failure," "turned the whole society into a cage and caused hundreds of millions to be persecuted." He claims that "it is precisely because of the successful response of market-oriented reform to severe challenges that today’s glory was ushered in." ^[12] Everyone takes great exception to Mr. Wu’s total negation and even blackening of the socialist construction period prior to reform. Was socialist construction before reform and opening up utterly indefensible? Can it, or must it, be totally negated?

We believe it is likely because of views like Mr. Wu’s ^[13] that Xi Jinping, at the symposium commemorating the 120th anniversary of Mao Zedong’s birth, further clarified: "Socialism with Chinese characteristics did not drop from the sky." "The socialist practical exploration before reform and opening up was the starting position for the Party and the people to grasp reality and create the future in the new historical period. Without the historical experience—both positive and negative—it provided, and without the ideological, material, and institutional achievements it accumulated, reform and opening up could not have proceeded smoothly." ^[14]

When studying this speech, we reviewed this period of New China’s history and concluded that, even looking solely at economic construction, it was not only not a "failure" but was extremely great. This greatness lies in the establishment of an independent and relatively complete industrial system and national economic system, achieving an average annual GNP growth rate of 6.1%—a speed that "ranks among the fastest in the world during the same period." ^[15] This was achieved on a foundation of being "poor and blank," despite the institutional flaws of the planned economy (such as overly centralized decision-making in resource allocation) and errors in exploration like the Great Leap Forward and excessive socialization. Regarding its significance, Deng Xiaoping said: "The socialist revolution has already greatly shortened the gap in economic development between our country and developed capitalist countries. Although we have made some mistakes, we have still achieved progress in thirty years that old China did not achieve in hundreds or thousands of years." ^[16] Even the American historian Maurice Meisner highly evaluated the modernization of the Mao era, calling it "one of the greatest periods of modernization in the world, not inferior to the periods of most intense industrialization in latecomers to the modern industrial stage like Germany, Japan, and Russia." ^[17]

Therefore, we are astonished by Mr. Wu’s total negation of socialist construction before reform and opening up and would very much like to know the basis for it. But Mr. Wu offers viewpoints without demonstration or evidence, which is very disappointing!

IV. Does Solving Corruption, the Huge Wealth Gap, and Official-Citizen Conflicts Rely on Taking the "Evil Path"?

“The path determines the destiny;” “the question of the path is the primary issue concerning the success or failure of the Party's cause; the path is the lifeblood of the Party.” These are the core contents that must first be mastered when studying the spirit of the Central Committee, such as the series of speeches by Xi Jinping. Consequently, when studying from this perspective, people find Professor Wu’s attribution of the polarization between rich and poor, severe corruption, and acute conflicts between officials and the masses to the large scale of public enterprises and excessive government power (leading to vast rent-seeking ^[19] space) not only preposterous but also problematic. They believe that, from the perspective of a “top-level design” target model aimed at “eliminating the administrative monopoly privileges of state-owned enterprises and certain non-state enterprises favored by government officials,” this has the objective effect of leading toward the “evil road of changing flags and colors” ^[20].

In reality, the current massive wealth gap, severe corruption, and the intensification of conflicts between officials and the masses in China each have their own specific causes; they should not and cannot be generalized. The huge wealth gap is primarily rooted in three consequences of excessive privatization: the weakening of the dominant status of the public economy; the seizure of vast amounts of public assets by a minority during privatization; and the irrational—even illegal—widening of the distribution gap between labor and capital income (such as the severe suppression, arrears, or even deduction of workers' wages). Of course, it is also related to the insufficient construction and perfection of the socialist property rights system, especially the system of distribution according to work and human capital property rights. Wealth acquired through administrative corruption and the exorbitant salaries of some state-owned enterprise (SOE) executives should not be considered the decisive causes of the widening wealth gap. Although there are many types and causes of corruption, almost all are rooted in economic corruption. The most influential and serious form of economic corruption is none other than the erosion of government officials by private capital (including foreign capital). Simultaneously, it is closely related to the "envy" felt by officials of low personal quality due to the divergence between capital income and labor income caused by excessive privatization and the over-introduction of foreign investment. The main cause of the intensification of conflicts between officials and the masses is that certain officials have forgotten the "serving the people" mission, acting as if the guests have usurped the host ^[21] and even depriving the people of their rights and interests. Secondarily, it is closely related to the incomplete systems and regulations for punishing corruption and curbing the Four Winds (formalism, bureaucratism, hedonism, and extravagance), as well as ineffective enforcement. Therefore, the view that summarizes these problems as being due to the scale of public enterprises and excessive government rent-seeking space only describes a surface phenomenon; it not only fails to touch the essence of the problem and contradicts historical facts but is fundamentally untenable and misleading.

It is quite obvious: if Professor Wu’s view were correct, then the period on the eve of reform and opening up should have been the historical era with the most serious wealth gap, corruption, and conflict between officials and the masses, because at that time the scale of public enterprises was largest, government power was greatest, and rent-seeking space was also at its maximum. But in fact, the opposite was true. As someone who lived through that era, it is baffling that Professor Wu would make such an error that violates historical common sense. Of course, the gravity of the problem does not lie there. When one analyzes the objective effect of this common-sense error—which negates both the historical period before and after reform and opening up—and combines it with his "top-level design" target model of "eliminating the administrative monopoly privileges of state-owned enterprises and certain non-state enterprises favored by government officials" to establish a “limited and effective government” and a completely free market economy, one again reaches the conclusion of an “evil road” that would “cancel the leadership of the Communist Party in China and subvert the socialist regime!” This leaves everyone stunned: Why does Professor Wu lead everything toward the “evil road,” even disregarding historical common sense?

V. Is the goal of comprehensively deepening reform the establishment of a Western “limited and effective government” and a “free competition” market economy without macroeconomic regulation?

The general goal of comprehensively deepening reform determined by the Decision of the Third Plenary Session of the 18th CPC Central Committee is to improve and develop the system of socialism with Chinese characters and to promote the modernization of the state governance system and governance capacity. Centering on this general goal, first, it clarifies that the focus is on economic system reform, the core issue of which is handling the relationship between the government and the market, allowing the market to play the decisive role in resource allocation and better playing the role of the government. Second, it clarifies the political and economic responsibilities of our People’s Government, which “upholds the principal status of the people.” The political responsibility is to ensure the people are masters of the country ^[22], with the mission of serving the people. The economic “responsibilities and roles are to maintain macroeconomic stability, strengthen and optimize public services, ensure fair competition, strengthen market supervision, maintain market order, promote sustainable development, promote common prosperity, and compensate for market failures.” When explaining the Decision of the Third Plenary Session of the 18th CPC Central Committee, Xi Jinping quoted Deng Xiaoping to emphasize: “‘If we do not persist in socialism, do not reform and open up, do not develop the economy, and do not improve the people’s lives, it will only be a dead end.’ Looking back, we have a deeper understanding of Comrade Deng Xiaoping’s words. Therefore, we say that only socialism can save China, and only reform and opening up can develop China, develop socialism, and develop Marxism.” At the same time, he specifically pointed out: “We implement a socialist market economy system; we must still persist in exerting the superiority of our country’s socialist system and the active role of the Party and the government. The market playing a decisive role in resource allocation does not mean it plays the entire role.” “Emphasizing scientific macroeconomic regulation and effective government governance is an inherent requirement for exerting the superiority of the socialist market economy system.” After deeply studying this spirit of the Central Committee, everyone feels perplexed by Professor Wu’s theory of a top-level design target model.

As mentioned previously, Professor Wu cited the views of neoliberal figures such as Milton Friedman and John McMillan to argue that “free competition is the soul of the market system,” advocating that the goal of comprehensively deepening reform is to establish a completely free market economy without macroeconomic regulation and a “limited government” or “effective government.” At the same time, he severely criticized the view that “a ‘socialist market economy’ is a market system under the harness of Party and government leadership.” Whose view is this? Professor Wu did not say, and a search through Party and government documents, textbooks, and academic research yielded no results. Judging by Professor Wu’s specific criticism that “China’s land acquisition market is a typical ‘pseudo-market’” and his long-held view of a “half-command, half-market” economy, he is referring to our country’s existing socialist market economy system. Professor Wu first exaggerates or even distorts the defects of the existing economic system and then negates it, which reminds people of how he previously blackened the historical period before reform and opening up as “turning the whole society into a cage and causing hundreds of millions to be persecuted,” and then negated it entirely. This makes everyone feel disappointed: what kind of logic is this?

As is well known, the theories of “limited government” and “effective government” are institutional construction theories of modern Western liberalism. We have noticed that when Professor Wu uses this theory to guide our country’s reform, he does not copy it exactly, but rather "innovates" the connotations of these categories. “The so-called limited government is a government form opposite to the omnipotent government (infinite government) under a planned economy.” “The so-called effective government is one that should improve government management under the supervision of taxpayers, eliminate corruption and waste, and provide services to the public with low cost and high efficiency.” But what is an “omnipotent government under a planned economy”? Is it not the government that has continued for over 60 years in New China ^[23] to the present day? Now, the advocacy for establishing a “limited government” and “effective government” is naturally because the “omnipotent government under a planned economy” is allegedly all-powerful yet ineffective. Without even discussing whether the “omnipotent government” was truly all-powerful or ineffective, regarding the total negation of the “omnipotent government under a planned economy”: if Professor Wu’s aforementioned use of the post-reform period to negate the pre-reform period at least affirmed the achievements of construction after reform and opening up, then here, he negates the entire socialist construction of New China! The impression given is that using the post-reform era to negate the pre-reform era was only a stage-specific goal or a means, while the total negation of 60-plus years of socialist construction in New China is the ultimate goal. Furthermore, regarding the "reform" orientation of establishing a completely free market economy without macroeconomic regulation and a Western-style “limited” or “effective government,” Professor Wu’s goal for comprehensively deepening reform becomes clear at a glance: the total transplantation of the Western model. That is, the “reform” of the system of socialism with Chinese characteristics into a European-American model.

Of course, in improving and developing the system of socialism with Chinese characteristics, we should pay attention to learning from the rational components in the Western theories of “limited government” and “effective government” regarding the curbing of bureaucratism and administrative corruption. However, the essence of the problem here is not whether or how to learn from Western government theory, but rather the question of the nature of the government and the market economic system to be established—ultimately, it is a question of which road to take. Therefore, although the answer to the problem is self-evident, we would still like to ask Professor Wu to answer directly: is the goal of comprehensively deepening reform to “reform” our People’s Government into a Western “limited/effective government” and to establish a market economy of complete “free competition” without macroeconomic regulation?

In fact, the historical essence of the Western “limited/effective government” is completely different from that of the People’s Government of New China; they should not and cannot be spoken of in the same breath without distinction. This is something even a middle school student should understand; why doesn’t Professor Wu? Furthermore, his consistency “throughout the past as well as the 32 years” makes everyone even more confused.

Regarding the different natures of Eastern and Western governments and the mutual learning of measures to curb bureaucratism, a few more words seem necessary. As a government under the leadership of the Communist Party of China where the people are masters of the country, our government's mission is to serve the people. As far as this mission is concerned, it has an infinite nature; can it be remodeled and restricted using Western limited government theory? Additionally, we feel that Professor Wu’s advocacy for “serving the public” rather than “serving the people” is far too “Westernized.” If “serving the public” ^[24] were equal to serving the people, it wouldn't matter much; the problem is that in the Western context and society, the essence of "serving the public" is serving the monopoly bourgeoisie. Is it not? Even the U.S. government, which always flaunts democracy and freedom of the press and speech, arrested, detained, and even killed how many civilians during the “Occupy Wall Street” movement? They didn't even spare journalists. Its essence as a “night-watchman” for the monopoly bourgeoisie was exposed with total clarity. Thus, our question is: why not use “serving the people,” which we all know and love, instead of “serving the public,” a term with a Western stamp and specific historical connotations?

In fact, within the Western theories of “limited/effective government,” ideas like curbing government bureaucratism and administrative corruption are not Western inventions. Since the day it was founded, the People’s Government at all levels in our country has paid attention to building a clean government, with connotations far richer and more correct than those in Western government theories. This is fully illustrated by the “Three-Anti” and “Five-Anti” ^[25] campaigns in the early days of New China, the subsequent executions of Zhang Zishan and Liu Qingshan ^[26], and the current powerful anti-corruption efforts—characterized by “leaving a dent in the stone and a mark on the iron” ^[27]—the halting of the “Four Winds,” and the carrying out of the mass line education. In this regard, it is worth mentioning and taking pride in the fact that Mao Zedong found the way to effectively solve bureaucratism and administrative corruption long before the founding of the PRC: that is to ask the masses of the people to supervise the government and let the people be masters of their own house. It should be affirmed that mass supervision and letting the people be masters of the country is the fundamental way to eliminate phenomena like bureaucratism and corruption; it is also the best method that does not exist in Western government theory and is impossible for Western governments to implement. In this sense, we can learn from certain correct practices of Western government theory, whereas Western governments find it difficult to learn from our superior method. In this regard, failing to cherish and improve our own good things, but instead following in others' wake or even retreating to learn from the West as if from a sacred canon ^[28], inevitably makes one a laughingstock. Some people accuse Professor Wu of having a colonial mindset—though this lacks respect, they are serious and mean no ill will.

Of course, this is not to say that Mr. Wu’s viewpoints are entirely without merit. For instance, he states: “The primary defect of our current economic system lies in excessive administrative intervention by the government and its deep involvement in microeconomic activities. Extensive administrative intervention and the administrative monopolies of large state-owned enterprises have suppressed the initiative and creativity of independent enterprises as market entities and subjects of technological innovation.” While these assertions are not quite accurate and contain a mix of truth and error, they do reveal some of the reasons for comprehensively deepening reform. However, the essence of the matter lies in how one understands these defects. In fact, these defects are not essential phenomena of the socialist market economy system; rather, they are non-essential phenomena arising from the fact that the system is not yet perfect and the relationship between the government and the market has not yet been properly handled. They are precisely the phenomena that must be resolved in order to improve the socialist market economy system. Otherwise, why would they be called "defects"? One should believe that as long as we strictly standardize the behavioral boundaries of the government and state-owned enterprises in accordance with the deployment of the Third Plenary Session of the 18th CPC Central Committee and accelerate the improvement of the socialist market economy system, these defects can be completely curbed or eliminated entirely. Even if they cannot be eliminated all at once, we must not retreat to a capitalist model under the guidance of neoliberalism!

Regarding how to correctly understand the spirit of the Decision of the Third Plenary Session of the 18th CPC Central Committee on the relationship between the government and the market, many believe that the research of Cheng Enfu, a Member of the Academic Division of the Chinese Academy of Social Sciences (CASS), is trustworthy. He states: “The ‘theory of the market’s decisive role’ in socialism with Chinese characteristics is poles apart from the ‘theory of the market’s decisive role’ advocated by domestic and foreign neoliberalism. The former possesses the following five characteristics: first, it coexists with national macroeconomic regulation and microeconomic oversight; second, it is limited to the short-term allocation of general resources, rather than the long-term allocation of general resources or special resources such as underground resources ^[29]; third, in the allocation of certain non-material resources—such as culture and education—it merely introduces market mechanisms suitable for those fields rather than allowing the market to be decisive; fourth, public ownership remains the mainstay and the state-owned economy remains the leading force, as reflected in the market economic system and market activities; and fifth, in the fields of wealth and income distribution, the market and the government each perform their respective regulatory roles, with the market playing a larger role in the primary distribution of national income and the government playing a larger role in redistribution.” He further points out: “The significance of the Third Plenary Session’s emphasis on the idea of dual regulation lies in the need to view the decisive role of the market and the better functioning of the government as an organic whole from now on. We must use the superior functions of market regulation to suppress ‘state regulation failure,’ while simultaneously using the superior functions of state regulation to correct ‘market regulation failure,’ thereby forming a ‘double-high’ pattern of an efficient market and an efficient government. This is conducive to exerting the benign regulatory functions of the socialist state while avoiding the neoliberal trap and the risks of financial and economic crises at the level of top-level design. This is fundamentally different from what some domestic and foreign neoliberal proponents of the market's decisive role describe as China still practicing a ‘semi-command economy,’ ‘crony capitalism’ ^[30], or ‘state capitalism.’ Nor does it promote a so-called ‘modern market economy system’ that advocates for a competitive market mechanism without state regulation, much less market fundamentalism or ‘marketization-only’ reforms that evade necessary government macroeconomic regulation and microeconomic oversight.” [xx]

Web Editor: Lanheshui

[iii] Wu Jinglian: China's establishment of a modern market economy system "cannot be completed without the guidance of Western theories." These so-called "Western theories" refer to neoliberalism. Xia Xiaolin has conducted systematic research on this (see Xia Xiaolin, “Famous Public Figures Fabricate Viewpoints of Central Documents One After Another,” Hong Kong Fax No. 2010-7; Journal of Management 2012, no. 2 and 3: “The ‘Euro-American Model’ of ‘Universal Values’ Cannot Save China: A Four-Part Critique of Wu Jinglian’s ‘Socialist Model Theory’ (Parts I and II)”). Ma Guochuan provided a recent portrayal of this: using the viewpoints of neoliberal figures such as Milton Friedman as guidance to frame the target model for comprehensively deepening reform. See Ma Guochuan, “Wu Jinglian: The Core Issue of Reform is Properly Handling the Relationship Between Government and Market,” published in Investment Times, November 13, 2013.

[vi] The "Four Distinctions" ^[31] are: consciously drawing a clear distinction between Marxism and anti-Marxism; between the basic economic system—in which public ownership is the mainstay and multiple forms of ownership develop together—and privatization or unitary public ownership; between socialist democracy with Chinese characteristics and Western capitalist democracy; and between socialist ideology and culture and the decadent ideology and culture of feudalism and capitalism. See “Decision of the CPC Central Committee on Several Major Issues Concerning Strengthening and Improving Party Building Under the New Situation,” published in People’s Daily, September 28, 2009.

[xiii] “Such viewpoints” also include democratic socialism and historical nihilism. Please refer to Cheng Yanjun’s viewpoints in the “Collection of Expert Views” in the Chinese Social Sciences Today (中国社会科学报), December 9, 2013: The most profound and serious harm comes from the "fake reform but real Westernization" of neoliberalism—characterized by comprehensive privatization, total marketization, and extreme liberalization—which has led to a serious weakening of the economic, political, and social foundations of socialism with Chinese characteristics. The most wanton and resolute rhetoric comes from democratic socialism, which, targeting the historical conclusion that "only socialism can save China," instead proposes that "only democratic socialism can save China." The most hidden and sinister intent comes from historical nihilism’s total negation of the glorious history of the Chinese nation’s realization of its great rejuvenation. For details, see Cheng Yanjun, Xu Min, and Cheng Hao, “Correcting the Source: Consolidating the Ideological, Theoretical, and Public Opinion Foundations for Comprehensively Deepening Reform,” published in Marxism Studies (马克思主义研究), 2014, no. 5.

[xviii] “Strong government and large state-owned enterprises,” and the “ever-strengthening power of resource allocation and control over economic activities, have resulted in the most serious consequence: strengthening the institutional basis for rent-seeking activities, leading to the rapid spread of corruption and the widening gap between rich and poor, and intensifying contradictions between officials and the people.” Furthermore, this has “formed a vicious cycle—the more government control is strengthened, the greater the institutional basis for rent-seeking and the more serious corruption becomes; and the more serious corruption becomes, under the guidance of certain erroneous public opinions, the more reason there is to demand strengthened control by the government and state-owned enterprises.” Wu Jinglian, “The Future Direction of China’s Economy,” published on China Economic News Network, August 7, 2013.

[xix] The system of distribution according to labor and human property rights is the distribution system of a human-property-rights-based modern enterprise system. It refers to the combination of distribution according to labor, capital, and human property rights, with labor and human property rights as the primary bases. This corporate distribution system subverts the unfair nature of the capital-property-rights-based modern enterprise system, where profit distribution leans only toward elite senior management while profits are essentially enjoyed exclusively by capital owners. It constructs a corporate dynamic mechanism for development that organically combines distribution according to labor and human property rights as the mainstay with distribution according to capital as a supplement. It represents a revolution by the human-property-rights-based modern enterprise system over the capital-property-rights-based system in terms of both the subjects and the shares of corporate profit-sharing, specifically regarding who is incentivized (physical capital or human capital). Cheng Yanjun, “The Revolution of the Modern Enterprise System: From Capital-Property-Rights-Based to Human-Property-Rights-Based,” published in Marxism Studies, 2012, no. 9.