“The gov­ern­ment and the mar­ket”

ChinAfrica - - China Report -

Af­ter more than 30 years, China con­tin­ues to open up and pro­ceed with re­form. It con­stantly re­fines its so­cial­ist mar­ket econ­omy to al­low the mar­ket to play a big­ger role. To fur­ther im­prove the eco­nomic struc­ture, China has to prop­erly han­dle the re­la­tion­ship between gov­ern­ment and mar­ket, a ma­jor chal­lenge un­der the new con­di­tions.

In its re­port to the 18th Na­tional Congress in Novem­ber 2012, the Com­mu­nist Party of China (CPC) stated, “The un­der­ly­ing is­sue we face in eco­nomic struc­tural re­form is how to strike a bal­ance between the role of the gov­ern­ment and that of the mar­ket, and we should follow more closely the rules of the mar­ket and bet­ter ex­er­cise the role of gov­ern­ment.”

To man­age this re­la­tion­ship prop­erly, the mar­ket should play a de­ci­sive role in re­source al­lo­ca­tion, while ex­ces­sive gov­ern­ment in­ter­ven­tion in the op­er­a­tions of in­di­vid­ual en­ter­prises must be avoided; at the same time the gov­ern­ment should im­prove its own per­for­mance by trans­form­ing its func­tions, op­ti­miz­ing its or­ga­ni­za­tional struc­tures, and in­tro­duc­ing a bet­ter macro-ad­just­ment sys­tem.

The de­vel­op­ment of a so­cial­ist mar­ket econ­omy ne­ces­si­tates con­tri­bu­tions from both the mar­ket and the gov­ern­ment, which should forge a syn­ergy to pro­pel the sound and sus­tain­able de­vel­op­ment of the econ­omy and so­ci­ety.

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