Wu Zhenglong: Adhere to the combination of efficient market and proactive government

Developing a socialist market economy is a great creation of our party, and the key is to handle the relationship between the government and the market well. The Proposal of the Central Committee of the Communist Party of China on Formulating the 15th Five Year Plan for National Economic and Social Development, adopted at the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China, proposes to adhere to the combination of effective market and proactive government, providing scientific guidance for correctly handling the relationship between government and market. It is necessary to deeply understand, grasp and comprehensively implement it, and accelerate the construction of a high-level socialist market economy system.

1、 Deeply understand the significant importance of combining efficient markets with proactive governments

After more than 40 years of practice in reform and opening up, China's socialist market economy system has continued to develop, and our party's understanding of the relationship between the government and the market has also been continuously deepened. Especially since the 18th National Congress of the Communist Party of China, General Secretary Xi Jinping has made a series of important statements on coordinating the relationship between the government and the market, emphasizing the use of both the "invisible hand" and the "visible hand". It is necessary to have both an effective market and a proactive government, fully leverage the decisive role of the market in resource allocation, and better play the role of the government. This is a concentrated manifestation of dialectics and two-point theory in the relationship between the government and the market, and also an effective way to solve many prominent problems in practice. It has strong ideological, guiding, and targeted significance, further deepening the regulatory understanding of developing the socialist market economy with Chinese characteristics.

The "15th Five Year Plan" period is a crucial period for consolidating the foundation and fully exerting efforts to achieve socialist modernization. Adhering to the combination of an effective market and a proactive government, coordinating the relationship between the government and the market, is of great significance for achieving the goals and tasks set in the "15th Five Year Plan" and maintaining stable and healthy economic and social development.

（1） This is an inherent requirement for deepening economic system reform and leveraging the advantages of the socialist market economy system. Economic system reform is the key to comprehensively deepening reform. The Third Plenary Session of the 20th Central Committee of the Communist Party of China focused on the core issue of handling the relationship between the government and the market, placing the construction of a high-level socialist market economy system in a prominent position, and making arrangements for key areas and links of economic system reform. Many reform tasks must be completed during the 15th Five Year Plan period. In recent years, China's socialist market economy system has been continuously improved and perfected, but there are still drawbacks in some aspects that hinder market competition and restrict market vitality, as well as problems of government function deficiency and overstepping. This requires adhering to the direction of socialist market economy reform, promoting market-oriented reforms in both breadth and depth, continuously improving government management and service capabilities, and striving to build a more systematic, complete, mature, and standardized high-level socialist market economy system. Only by clarifying the boundaries between the government and the market, allowing each to showcase its strengths, can we better leverage the advantages of the socialist market economy system, further liberate and develop productive forces, and liberate and enhance social vitality.

（2） This is an inherent requirement for implementing the new development concept and promoting high-quality development. To build a modern socialist country in all respects, we must, first and foremost, pursue high-quality development. During the 15th Five Year Plan period, we must closely focus on this primary task, promote the effective improvement of the quality and reasonable growth of the economy, take solid steps towards comprehensive human development and common prosperity for all people, and ensure decisive progress in the basic realization of socialist modernization. This also requires the complete, accurate, and comprehensive implementation of the new development concept in economic and social development, making innovation the primary driving force, coordination an endogenous characteristic, green a universal form, openness a necessary path, and sharing the fundamental goal. Implementing the new development concept and achieving high-quality development cannot be achieved solely by either the market or the government. The two must complement each other and work together. The market is a powerful driving force for development. To improve the quality and efficiency of development, it is necessary to rely on an effective market to stimulate the vitality of various business entities, accelerate technological innovation and industrial upgrading, and promote the transformation of economic development quality, efficiency, and driving force. At the same time, the role of a proactive government is indispensable. Measures such as improving macro governance, regulating market order, strengthening public services, and preventing and resolving major risks are needed to promote a healthier and more orderly operation of the market, ensure fair competition among all types of business entities, and ensure that development achievements benefit all people more and fairly, thereby promoting higher quality, more efficient, more fair, more sustainable, and safer development.

（3） This is an inherent requirement for strengthening the domestic circulation and properly responding to external shocks. During the 15th Five Year Plan period, China's development environment is facing profound and complex changes, with strategic opportunities and risks coexisting, and an increase in uncertain and unpredictable factors. In this context, we must adhere to the strategic basis of expanding domestic demand, focus on strengthening the domestic circulation, hedge the uncertainty of the international circulation with the stability of the domestic circulation, effectively respond to external shocks, and promote the stable and far-reaching development of China's economy. The key to strengthening the domestic circulation lies in leveraging the dual roles of government and market, promoting the smooth flow and efficient allocation of commodity resources on a larger scale. China has a population of over 1.4 billion, a large scale of business entities, and a middle-income group, with a per capita GDP of over 13000 US dollars. As long as efforts are made to eliminate institutional barriers to the flow and allocation of various factors, and to make production, distribution, circulation, and consumption more dependent on the domestic market to achieve a virtuous cycle, the enormous resource value and development potential can be fully released, and the endogenous driving force and reliability of the domestic circulation can be enhanced. At the same time, it can also gather high-quality global resources with strong domestic demand, achieve mutual promotion of domestic and international circulations, and firmly grasp the initiative in dealing with global economic uncertainty, instability, and great power games.

2、 Focus on building a unified, open, competitive, and orderly market system

The market determines resource allocation, which is a general law of market economy. Essentially, market economy is an economy where the market determines resource allocation. We should entrust economic activities that can be effectively regulated by market mechanisms to the market, and delegate tasks that the government should not interfere with to the market. We should minimize the government's direct allocation of market resources and direct intervention in microeconomic activities, accelerate the construction of a high standard market system, further amplify the scale and agglomeration effects of China's market, and give the whole society stronger vitality and greater space to develop the economy and create wealth.

（1） Deepen the construction of a unified national market. The market with super large scale and great growth potential is a huge advantage for China's development. Building an efficient, standardized, fair competition, and fully open national unified market can deepen division of labor and cooperation on a larger scale, promote full competition, reduce transaction costs, create a favorable market environment for promoting scientific and technological innovation and enterprise development, and enable demand to better lead optimized supply. Supply can better serve the expansion of demand, promote high-quality development and high-quality life, and continuously meet the growing needs of the people for a better life. The basic requirement for promoting the construction of a unified national market in depth is "five unifications and one openness", which includes unifying the basic market system, market infrastructure, government behavior standards, market supervision and law enforcement, and factor resource markets, and continuously expanding domestic and foreign opening up. To improve the market system rules, especially to achieve the unity of property rights protection, fair competition, quality standards and other systems, and to perfect the statistical, fiscal and taxation, and assessment systems that are conducive to the construction of a unified large market; To enhance the connectivity level of market facilities, connect logistics, capital flow, and information flow, and improve the modern commercial and trade circulation system; To clarify the specific behaviors encouraged and prohibited by the government in attracting investment, and to clean up policy measures that affect the construction of a unified national market; We need to unify the standards and procedures for market supervision and law enforcement, clarify the criteria for administrative penalty discretion, and use a single ruler to measure to the end; To promote the free flow and efficient allocation of factor resources throughout the country, and reduce resource misallocation and idle waste; We need to implement internal and external openness and connectivity, avoid closed operations, prevent localities from engaging in self circulation, and continuously release the dividends of a super large market.

（2） Effectively maintain fair competition in the market. Fair competition is a fundamental principle of a market economy. In recent years, China has made great efforts to strengthen the construction of a fair competition system and continuously optimize the market competition environment. However, local protection, market segmentation, and monopolistic behavior in economic activities still exist to varying degrees in some places and fields. We need to deepen the implementation of fair competition policies, implement the Fair Competition Review Regulations and their implementation methods, strengthen anti-monopoly and anti unfair competition law enforcement and judiciary, and continuously eliminate explicit and implicit barriers that affect fair market competition. Governance of low price and disorderly competition among enterprises in accordance with the law and regulations, guiding enterprises to improve product quality, promoting the orderly exit of backward production capacity, severely cracking down on market chaos such as counterfeiting, false advertising, and infringement of intellectual property rights, and creating a good competitive ecology. We will unwaveringly consolidate and develop the public ownership economy, encourage, support, and guide the development of the non-public ownership economy, ensure that all types of ownership economies use production factors equally in accordance with the law, participate in market competition fairly, and receive equal legal protection, and promote the complementary advantages and common development of all types of ownership economies.

（3） Accelerate the construction of a rule of law economy and a credit economy. The socialist market economy is a rule of law economy, and we must adhere to the use of legal thinking and methods to guide and regulate various economic activities. In recent years, laws and regulations such as the Private Economy Promotion Law and the Regulations on Fair Competition Review have been introduced and implemented, creating favorable conditions for business entities to start businesses in accordance with the law and regulations. We should focus on building a modern economic system, continuously strengthen legislation in key areas, emerging fields, and foreign-related fields, and timely fill in the loopholes in the rules of new technologies and applications. Improve the legality review mechanism for major decisions and normative documents, establish a fair law enforcement and judicial system, and continue to promote the standardization and legalization of government behavior. The market economy is also a credit economy, and we need to accelerate the construction of a social credit system that covers all types of entities, has unified institutional rules, and is jointly built, shared, and shared. Strengthen the collection and sharing of credit information, promote the integration of public credit information and market credit information, and expand the deep application of credit in administrative management, social governance, financial services, and people's livelihood security. Based on credit evaluation, implement graded and classified supervision, optimize measures such as credit incentives and punishment for dishonesty, improve the unified credit repair mechanism, and make honesty and trustworthiness a conscious action of various business entities.

（4） Continuously building a market-oriented, rule of law, international first-class business environment. The business environment is the soil for the survival and development of business entities. It is necessary to benchmark against the international first-class level, promote the continuous optimization of the business environment, constantly stimulate market vitality, and enhance endogenous development momentum. Improve the national unified negative list for market access, optimize the market access environment for new formats and fields, and build an open, transparent, standardized, orderly, fair competition, clear rights and responsibilities, and strong regulatory market access system. Further improve the enterprise exit system and better leverage the market mechanism's survival of the fittest function. Accelerate the improvement of the market-oriented allocation system and mechanism for factors, establish a mechanism where factor prices are mainly determined by market supply and demand, and effectively enhance the efficiency of resource allocation. Proactively aligning with international high standard economic and trade rules, steadfastly promoting high-level opening-up to the outside world, steadily expanding institutional opening-up in terms of rules, regulations, management, standards, etc., actively expanding independent opening-up, deepening reforms in foreign trade, foreign investment, and foreign investment management systems, promoting trade and investment liberalization and facilitation, and shaping new advantages in international cooperation and competition. Protect the rights and interests of foreign investment in accordance with the law, fully implement national treatment, strengthen normalized communication mechanisms and service guarantees, and encourage more foreign-funded enterprises to invest in and deeply cultivate China.

3、 Accelerate the formation of an economic order that is both 'flexible' and 'well managed'

To balance the relationship between an effective market and a proactive government, it is necessary to handle the relationship between vitality and order, achieve a dynamic balance of vitality without disorder and active order, and continuously improve administrative efficiency.

（1） Strive to promote high-quality development. Scientific macroeconomic regulation and effective government governance are inherent requirements for leveraging the advantages of the socialist market economy system. We must closely focus on promoting high-quality development, fully leverage the functions of government economic regulation, market supervision, social management, public services, ecological environment protection, etc., promote the comprehensive implementation of various policies and measures, and facilitate the comprehensive achievement of various goals and tasks. Strengthen the strategic guidance role of national development planning, enhance the coordination of fiscal and monetary policies, give full play to the policy roles of industry, price, employment, consumption, investment, trade, region, environmental protection, regulation, etc., enhance the consistency of macroeconomic policy orientation, and improve the efficiency of macroeconomic governance. Optimize administrative decision-making, execution, organization, and supervision systems, improve departmental coordination and cooperation mechanisms, enhance government execution and credibility, and promote efficient government performance.

（2） Strengthen and optimize government supervision. Market regulation sometimes has drawbacks such as spontaneity, blindness, and lag. This requires the government to take on the responsibility of correcting market failures and regulating competition order, to manage things well and effectively, comprehensively improve supervision in accordance with the law, and continuously enhance government regulatory efficiency. We should clarify the responsibility chain according to the principle of "who approves, who supervises, who is in charge, who supervises". Industry regulatory departments should strictly implement their regulatory responsibilities, relevant regulatory departments should fulfill their regulatory responsibilities within their respective areas of responsibility, local governments should fully implement their territorial regulatory responsibilities, and enterprises should strengthen self-management and self-restraint. We will comprehensively promote market supervision, quality supervision, safety supervision, and financial supervision, accelerate the establishment of a comprehensive, multi-level, and three-dimensional regulatory system, achieve full chain and full field supervision before, during, and after the event, and plug regulatory loopholes. Especially for key areas related to the safety of people's lives and property, public safety, as well as potential risks and high social risks, we should focus on supervision, severely punish illegal and irregular behaviors in accordance with the law, and prevent and resolve major risks. Coordinate development and security, continuously improve regulatory methods for new industries, new business models, and new modes. Adhere to regulatory norms and promote development equally, create a good innovation atmosphere while strictly adhering to the safety bottom line, and promote the development of new quality productivity. Continuously optimizing the regulatory system and mechanisms, improving cross departmental collaborative regulatory mechanisms, enhancing grassroots regulatory capabilities, and actively using information technology and other means to innovate regulatory methods, improving the predictability, accuracy, and effectiveness of regulation. This not only achieves scientific and effective regulation, but also effectively reduces the burden on enterprises and grassroots.

（3） Strictly regulate government behavior. A proactive government should not only avoid inaction and slow action, but also prevent disorderly behavior. To standardize the economic promotion behavior of local governments, all types of business entities should be treated equally in government procurement, bidding, standard setting and other activities, and the fairness review of winning bids should be strengthened to prevent the abuse of administrative power to exclude and restrict competition; Standardize local laws and regulations on investment promotion, strengthen the disclosure of investment promotion information, and strictly prohibit illegal and irregular policy incentives. We must strictly regulate fair and civilized law enforcement, improve the administrative law enforcement system and mechanism, perfect the benchmark system of administrative discretion, focus on eradicating prominent problems in enterprise law enforcement, resolutely prevent and correct arbitrary fees, fines, inspections, and seizures, resolutely prevent and correct illegal law enforcement in different places and profit oriented law enforcement, and ensure that all types of business entities can develop with peace of mind.

（4） Improve the level of government services. Building a service-oriented government is an essential part of strengthening the government's own development and better leveraging its role. To focus on the needs of the masses and enterprises, further optimize service processes, innovate service methods, unify service standards, and continuously improve the standardization, normalization, and facilitation level of government services. In recent years, governments at all levels have taken "efficiently accomplishing tasks" as an important lever to optimize government services and enhance administrative efficiency. They have actively promoted the transformation of government concepts, process reengineering, data sharing, and departmental collaboration, which has improved the satisfaction and sense of achievement of the masses and enterprises in handling affairs. We need to further leverage the driving force of "efficiently accomplishing a task", promote the management and normalized implementation of key task lists, strengthen departmental collaboration and service integration in more fields and on a larger scale, and drive the overall improvement of government governance capabilities. Adapting to the trend of digitalization and intelligence development, further improving the functions of the national integrated government service platform, deepening the promotion of "one-stop service", increasing the sharing of government data across levels, regions, and departments, focusing on breaking down data barriers, promoting policies that benefit enterprises and the people, and providing more convenience for enterprise operations and public affairs.