A new beginning for China’s comprehensive reform

Editor’s note: Li Zhi is assistant dean at the China Institute of Development Planning, Tsinghua University. The article reflects the author’s opinions and not necessarily the views of CGTN. 

The ongoing discourse surrounding China’s economic trajectory and reform direction has captured global attention for an extended period. The world watches with anticipation, pondering the destination of China’s economy. Recent economic data from the first quarter suggests a promising uptick, with signs of recovery in consumer and investment confidence emerging. After enduring a prolonged period of bottoming, the macroeconomic landscape is showing signs of improvement, reigniting international investors’ optimism in the Chinese market. 

Many analysts and observers deemed that China stands on the brink of a pivotal juncture, poised to embark on a transformative phase. The highly anticipated third plenary session of the 20th Communist Party of China (CPC) Central Committee is expected to mark this turning point. As such, the forthcoming session holds significant implications for China’s economic future.

The significance of the session cannot be overstated. Historically, these gatherings have served as focal points for reform discussions. China’s remarkable economic achievements over the past four decades owe much to the government’s bold reforms, particularly in improving the economic management.The symbiotic relationship between reform and opening-up has been the cornerstone of China’s economic success story. By unleashing market potential and fostering increased productivity, these twin pillars have propelled China’s rapid development.

Wind turbine in Ulanqabu, Inner Mongolia, China, August 8, 2023./CFP

Wind turbine in Ulanqabu, Inner Mongolia, China, August 8, 2023./CFP

One of the possible themes of the session will underscore the Chinese government’s unwavering commitment to economic reform with a focus on social fairness, justice, and the enhancement of people’s well-being. This declaration signifies a profound recognition within the government of the critical importance of addressing societal inequities and ensuring equitable distribution of prosperity as the fundamental goal of reform efforts. The emphasis on social justice and well-being as the cornerstone of economic reform reflects a broader recognition of the interconnectedness of economic prosperity and social stability. By addressing underlying issues of inequality and injustice, the Chinese government seeks to foster a more resilient and sustainable economic model that benefits society as a whole. As such, the third plenary session will mark a significant milestone in China’s ongoing reform journey, heralding a new era of economic governance that prioritizes the welfare and dignity of its citizens.

Another possible theme is about emphasizing the importance of the relationship between the government and the market. By fostering greater synergy between state governance and social development, comprehensive reform aims to create a more harmonious and inclusive economic system. This entails not only streamlining regulations and promoting market efficiency but also ensuring that government intervention serves to safeguard social welfare and address systemic inequalities.

The container yard of Taicang Port in Jiangsu Province, February 25, 2023./CFP

The container yard of Taicang Port in Jiangsu Province, February 25, 2023./CFP

From the macro perspective, comprehensive reform needs to enhance the foundational system of the market economy and foster breakthroughs in institutional reform across key areas such as property rights, market mechanisms, and regulatory frameworks. Institutional reform in markets and regulatory frameworks aims to enhance market efficiency, transparency, and competition. By streamlining administrative procedures, reducing bureaucratic barriers, and promoting fair competition, authorities can create a level playing field for businesses of all sizes, fostering innovation and productivity gains.

From the micro perspective, comprehensive reform involves making macro-control mechanisms more scientific and effective, with a focus on system integration and targeted interventions. This micro-level approach recognizes the complexity and interconnectedness of economic dynamics, requiring tailored policies to address specific challenges and opportunities. System integration is essential for ensuring coherence and consistency across policy measures and objectives. By aligning macro-policy orientation with broader economic goals, authorities can avoid conflicting or counterproductive policies that undermine overall stability and growth.

In summary, comprehensive reform efforts at both macro and micro levels are essential for driving sustainable economic growth, enhancing market efficiency, and promoting social welfare. By addressing institutional deficiencies, improving policy coordination, and fostering fair competition, authorities can lay the groundwork for a more resilient and inclusive economy.