A Translation of Gu Yumin's Research on Xi Jinping's Thoughts on Socialist Market Economic System and Operating Mechanism

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Foreward

This is a particularly interesting article that I saw someone mention on Twitter relatively recently, but it's written in Chinese. For the sake of making it more presentable to English-speaking audiences, I have decided to make a very rough translation into English. Of note is that I do not speak Mandarin Chinese, so please reference the original work to ensure that I am not accidentally misleading you. The original article can be found here. Also, I have not received explicit permission to translate this article from the original author. If the author contacts me and requests that I remove this article, I will take it down.

The Translated Text

Taking the road of socialist market economy development is an important part of socialism with Chinese characteristics, and it is also an important manifestation of the theory and practice of socialism with Chinese characteristics. The report of the 19th National Congress of the Communist Party of China pointed out that the new era "must uphold and improve China’s basic socialist economic system and distribution system, unswervingly consolidate and develop the public-owned economy, unswervingly encourage, support, and guide the development of the non-public-owned economy, so that the market will continue to grow. Play a decisive role in the allocation of resources and better play the role of the government." This is a solemn declaration that we will neither follow the old road of isolation and rigidity nor the evil road of changing the flag and changing the banner, and firmly follow the path of socialism with Chinese characteristics. The 19th National Congress of the Communist Party of China concentrated on the basic economic system of socialism with Chinese characteristics and the development path of market economy, economic system, and operating mechanism, which strengthened our confidence in road, theory, system, and culture.

1. Deng Xiaoping’s theoretical contribution to the socialist market economy

Adhering to the development path of the socialist market economy is a major innovation in the development of Marxist theory and the latest theoretical achievement of Marxism in contemporary China. It has opened up a broad space for the development path of socialism. The connotation of the socialist market economy includes two major contents: one is the combination of socialism and market economy, that is, whether socialism and market economy can be integrated and whether they can achieve internal unity; the other is whether the operation of socialism and market economy can be compatible. The unanimous question is whether the advantages of both the general law of market economy operation and the special law of socialism can be fully utilized. Only when these two major issues are resolved through the combination of theory and practice can we truly respond to all doubts about taking the development path of the socialist market economy.

After the Second World War, the establishment of a number of socialist countries started the process of socialism in many countries. Scholars in some countries explored the use of market economy to develop socialism and proposed a market socialism model, but they only stayed at academic thinking. At this stage, a realistic road and system of socialist market economy has not really formed.

In the 1950s, based on the practice of the Soviet Union, Stalin put forward the concept of socialist commodity economy, and carried out theoretical analysis and discussion, which is a bright spot in the development of socialist economic theory. However, Stalin's theory is not thorough. The theory itself has great contradictions, and it has not developed into a socialist market economy theory. In the end, it has not escaped from the rigid theory of socialist planned economy

(1) The combination of socialism and market economy is a major contribution of Deng Xiaoping Theory

The socialist market economy theory is a major innovation and development of Marxist theory by Deng Xiaoping, the chief designer of reform and opening up. Based on the practice of reform and opening up, Deng Xiaoping followed the ideological line of emancipating the mind and seeking truth from facts, keenly aware that a major theoretical and practical problem to be solved on the road of socialist development is the relationship between socialism and the market economy. The classic works of Marx and Engels clearly stated that the nature of socialist public ownership cannot be combined with the market economy. Practice has proved that the development of Marxist theory must be treated with a Marxist attitude. The combination of socialism and market economy is a major practical problem to be solved by contemporary Marxists, and it is also a concrete manifestation of the essence of the Marxist theory of advancing with the times. Deng Xiaoping pointed out as early as 1979: "It is definitely incorrect to say that the market economy only exists in a capitalist society, and that there is only a capitalist market economy. Why can't socialism develop a market economy? This cannot be said to be capitalism." "Socialism can also engage in a market economy." "This is how socialism uses this method to develop social productive forces. Taking this as a method will not affect socialism as a whole and will not return to capitalism." Later, Deng Xiaoping emphasized: "There is no fundamental contradiction between socialism and market economy. The question is what method can be used to develop social productive forces more effectively." Inspected in 1992. In important talks in the South, Deng Xiaoping further proposed: "A little more planning or a little more market is not the essential difference between socialism and capitalism. Planned economy is not equal to socialism, and capitalism has plans; market economy is not equal to capitalism, socialism There is also a market. Plans and markets are both economic means." The thesis that "two are not equal" is the first time in the history of Marxism that the theory of socialist market economy was put forward, and the socialist political economy The theory has been raised to a new stage, realizing a new understanding of socialism. After the 14th National Congress of the Communist Party of China established the theory of socialist market economy, the goal of economic reform was to establish a socialist market economic system. With the development of practice, our understanding of the socialist market economy from theory to system and operation mechanism is also deepening. From a deeper level, the unification of socialism and market economy solves the problem of the nature of market economy-it can be combined with capitalism or socialism. The basic economic system further demonstrates the socialist public ownership economy (state-owned economy). It also meets the development requirements of the market economy. The 15th National Congress of the Communist Party of China established the basic socialist economic system and laid a more solid Marxist theoretical foundation for the further development of the socialist market economy.

(2) The establishment of the basic economic system lays a firmer theoretical basis for the socialist market

The theory of the basic socialist economic system established by the 15th National Congress of the Communist Party of China is not only a major innovation and development of the theory of socialist ownership, but also brings our understanding of the development path of the socialist market economy into a new stage and realizes the essential characteristics and characteristics of socialism. The development of a market economy requires fundamental consistency. Deng Xiaoping’s thesis that “there is no fundamental contradiction between socialist public ownership and market economy” has been more fully explained theoretically, and fundamentally denied the view that socialism and market economy cannot be unified. The basic socialist economic system is a combination of multiple ownership economies: the non-public ownership economy has also entered the basic socialist economic system and has become a component of the basic socialist economic system. The macroscopic feature of the basic socialist economic system is a mixed ownership economy. The combination of the non-public economy and the market economy does not need to be demonstrated. The key is whether the public economy, especially the state-owned economy and the market economy, can be combined and consistent. The problem is clearly demonstrated theoretically. The combination of socialism and market economy Has been completely resolved. In this sense, the key to the problem of the combination of socialism and market economy is the combination of public ownership (state-owned economy) and market economy.

The combination of socialism and market economy is essentially the combination of public ownership and market economy. In the face of the combination of market economy and public ownership (state-owned economy), what we have to think about is how to answer this question theoretically. The problem that the socialist market economy theory must further solve is whether the public ownership economy (state-owned economy) and the market economy are inherently consistent. This problem cannot be explained and resolved theoretically, and the socialist market economy theory is incomplete. Stalin's theory of socialist commodity economy failed to make a breakthrough on this point, and eventually retreated to the old path of socialist planned economy. The current publi -owned economy (state-owned economy) contains the basic characteristics of the development of market economy, that is, the public-owned economy (state-owned economy) has independent economic interests, and they are all independent market entities and legal entities. The operation of the market economy does not itself Excluding the public-owned economy, whether it is a public-owned economy or a private-owned economy, as long as it is an independent market entity and legal entity with independent economic interests, it is in line with the development requirements of the market economy. The combination of theory and practice demonstrates that socialism with Chinese characteristics demonstrates that it is established that socialism takes the road of market economy and conforms to the law of development. This provides us with sufficient theoretical and practical basis for our firm confidence in the path, theory, system, and culture of socialism with Chinese characteristics. The market economy can be internally consistent with the public-owned economy (state-owned economy), and the market economy and the basic economic system are also internally unified. Shaken and hesitated in the internal unity of socialism and market economy, in essence, they deny the internal unity of socialism and market economy. "Shake" is the view of Westernization, which believes that socialism must take the road of privatization to develop a market economy, and "hesitation" is the rigid view that the combination of socialism and market economy will lead to a change in the nature of socialism. Both are essentially They are all opposed to taking the road of socialist market economy. The basic economic system established by the 15th National Congress of the Communist Party of China has established a solid and solid foundation for adhering to the direction of socialist market economy reform. Xi Jinping has repeatedly emphasized that the unswerving direction of the socialist market economy reform is built on this foundation.

Starting from the fundamental difference between public ownership and private ownership, the classic Marxist writers argued that socialism and market economy cannot be combined, because market economy is based on the existence of independent individual interests, and is inherently consistent with the private economy, while the public ownership economy is characteristic It does not have independent individual interests, so the two are not compatible, cannot be combined, and cannot coexist and function together. According to Marx and Engels' thinking, due to the incompatibility between public ownership and market economy, the combination of socialism and market economy cannot be established either. However, as practice is developing, Marxism must also keep pace with the times. The public economy in reality has new characteristics. It is not exactly the same as the public economy envisioned by Marx and Engels. The modern public economy (state-owned economy) has become a legal entity and market entity with independent economic interests. The development requirements are inherently consistent. With the establishment of the basic socialist economic system as a sign, socialism and the market economy are inherently unified. From the perspective of market economy development requirements, the required condition is that microeconomic entities become independent legal entities and market entities, regardless of the nature of ownership, that is, the market economy adapts to the economic nature of various ownership systems, and both socialism and capitalism can be compatible with each other. The integration of market economy, the market economy does not require a specific nature of ownership, the core of the socialist market economy theory lies in this, only by grasping this point can you become a true supporter of the socialist market economy. It is necessary to recognize that the combination of socialism and market economy is necessary, but it is not enough. It is also necessary to further understand the internal consistency of the development requirements of the public economy (state-owned economy) and the market economy from a theoretical perspective.

2. Xi Jinping's theoretical contribution to the socialist market economic system and operating mechanism

Since the 18th National Congress of the Communist Party of China, the Party Central Committee with Comrade Xi Jinping at the core has further enriched and developed the theory of socialist market economy in the process of comprehensively deepening reforms. "Decisions on Reforming Several Major Issues", an innovative summary of the socialist market economy system and operating mechanism: make the market play a decisive role in the allocation of resources, and better play the role of the government, and pointed out: "The reform of the economic system is a comprehensive The key and core issue of deepening reforms is to properly handle the relationship between the government and the market, so that the market can play a decisive role in the allocation of resources and better play the role of the government. The market determines the allocation of resources is a general law of the market economy, and it is necessary to improve the socialist market economic system. Follow this rule and focus on solving the problems of imperfect market system, excessive government intervention and inadequate supervision."

Regarding the clear positioning of the socialist market economic system and operating mechanism, Xi Jinping pointed out: “We must strengthen our confidence, build consensus, make overall plans, and coordinate advancement, adhere to the reform direction of the socialist market economy reform, and strengthen the systemic and overall reform of the reform. "It’s about making the market play a decisive role in the allocation of resources and better play the role of the government. This is a major theoretical viewpoint put forward by the decision of this plenary session. This is because the reform of the economic system is still a comprehensive deepening of reforms." The point is that the core issue of economic system reform is still to properly handle the relationship between the government and the market.

Proposing that the market can play a decisive role in the allocation of resources is a new breakthrough in our party’s understanding of the laws of building socialism with Chinese characteristics, a new achievement of the Sinicization of Marxism, and a new stage in the development of the socialist market economy. This obviously refers to a new breakthrough in the economic system and operating mechanism. The original socialist economic theory did not involve the decisive role of the market. Now the general laws of the market economy are introduced into the socialist market economic system. It is the new breakthrough that the harmonious operation mechanism has marked that the development of the socialist market economy has entered a new stage.

On the core issue of enabling the market to play a decisive role in the allocation of resources and better giving full play to the role of the government, Xi Jinping conducted a comprehensive analysis and elaboration: “Proposing that the market plays a decisive role in the allocation of resources is actually implementing the problem orientation. After two After more than ten years of practice, China’s socialist market economic system has continued to develop, but there are still many problems, and there are still many drawbacks that restrict the vitality of market entities and prevent the market and the law of value from fully functioning. These problems cannot be solved properly and a perfect society It is difficult to form a socialist market economic system, and it is also difficult to change the mode of development and adjust the economic structure. We must adhere to the direction of socialist market economic reforms, promote market-oriented reforms in breadth and depth, and reduce the direct allocation of resources by the government. The government’s direct intervention in microeconomic activities will speed up the construction of a unified, open, competitive and orderly market system, establish fair, open and transparent market rules, hand over economic activities that can be effectively regulated by market mechanisms to the market, and hand over matters that the government shouldn’t control. To the market, let the market play a full role in all areas where it can play a role, and promote resource allocation to achieve maximum benefit and efficiency optimization, so that enterprises and individuals have more vitality and greater space to develop the economy and create wealth." Scientific macro-control and effective government governance are the inherent requirements for giving full play to the advantages of the socialist market economy. To better play the role of the government, it is necessary to effectively transform government functions, deepen the reform of the administrative system, innovate administrative methods, and improve the macro-control system. Strengthen the supervision of market activities, strengthen and optimize public services, promote social fairness, justice and social stability, and promote common prosperity. Governments at all levels must administer strictly in accordance with the law and earnestly perform their duties. The power of government must be fully put in place, and resolutely overcome the dislocation, offside, and absence of government functions."

The research on the socialist market economy system and operating mechanism is the key content of the theoretical research after the 18th National Congress of the Communist Party of China. In terms of specific content, it focuses more on "improving the property rights system and the market-oriented allocation of factors, so as to achieve effective property rights." Incentives, free flow of elements, flexible price response, fair and orderly competition, and the survival of the fittest by enterprises." There are things that need the government to play an important role better, such as improving various state-owned asset management systems, "accelerating the optimization of state-owned economic layout, structural adjustment, and strategic reorganization, and promoting the preservation and appreciation of state-owned assets. Promote the strengthening and expansion of state-owned capital, and effectively prevent the loss of state-owned assets. Deepen the reform of state-owned enterprises, develop a mixed ownership economy, and cultivate world-class enterprises with global competitiveness. Fully implement the market access negative list system, and clear and abolish obstacles to unification Various regulations and practices on the market and fair competition support the development of private enterprises and stimulate the vitality of various market entities. Deepen the reform of the commercial system, break administrative monopolies, prevent market monopolies, accelerate the reform of factor prices, and relax restrictions on access to the service industry Improve the market supervision system. Innovate and improve the macro-control, give play to the strategic guiding role of the national development plan, and improve the fiscal, monetary, industrial, regional and other economic policy coordination mechanisms. Improve the system and mechanism to promote consumption, and strengthen the foundation of consumption for economic development Role. Deepen the reform of the investment and financing system and give full play to the key role of investment in optimizing the supply structure. Accelerate the establishment of a modern fiscal system, and establish a central and local fiscal relationship with clear powers and responsibilities, financial coordination, and regional balance. Establish comprehensive standards and transparency, scientific standards, and Restrict a powerful budget system and fully implement performance management. Deepen the reform of the tax system and improve the local tax system. Deepen the reform of the financial system, enhance the ability of financial services to serve the real economy, increase the proportion of direct financing, and promote the healthy development of multi-level capital markets. Improve monetary policy and macroeconomics The two-pillar regulatory framework of prudential policies will deepen the market-oriented reform of interest rates and exchange rates. The financial supervision system will be improved and the bottom line of systemic financial risks will not occur." "All regions and departments should proceed from reality, refine and quantify policy measures, formulate relevant supporting measures, promote the implementation, detailed and implementation of various policies, and enable private enterprises to truly follow the policy. Enhance the sense of gain" and so on. All these are the contents of the operating mechanism composed of market mechanism and government role.

A large number of independent activities involving the market and micro entities. The decision-making entities are independent legal entities and market entities. These are all done spontaneously under the influence of market laws. The biggest advantage of accomplishing these things through the market is high efficiency, low cost, and autonomy. Decentralized decision-making, no institution or organization can interfere. This is the essence of the market's decisive role in the allocation of resources. The problems that can be solved by the law of market economy do not need to apply the dogmatic thinking of "surnamed society" and "surnamed capital" Way to solve. The government solves problems that the market cannot solve: formulating laws and regulations, formulating and improving various policies, maintaining fair competition in the market, maintaining economic coordination, stable and sustainable and healthy development; performing supervisory functions, improving the supervisory system, supervising in place, and giving full play to the role of referees effect. The combination of the government and the market is the socialist market economic system and operating mechanism, and is also the content of the construction of a modern economic system proposed by the 19th National Congress of the Communist Party of China.

It has been nearly 30 years since the establishment of the socialist market economy theory in 1992 to discuss the development path, system, and operating mechanism of the socialist market economy. The 19th National Congress of the Communist Party of China told us: “Conscientiously maintain the authority of the Party Central Committee and centralized and unified leadership, and consciously maintain a high degree of consistency with the Party Central Committee in ideological and political actions." This is a question we discussed and studied. Premise. Without changing ideas on this issue, it will be difficult to form a common language in discussions.

3. Follow Xi Jinping's theory of socialist market economy operating mechanism and build a modern economic system

"Building a modern economic system" is a new concept put forward by the 19th National Congress of the Communist Party of China. It is an important part of promoting sustained and healthy economic development in order to better adhere to the new requirements of quality first, benefit first, deepen reforms, and continuously improve people's living standards. Task.

Proposing that the construction of a modern economic system is a concrete measure to implement and detail the operating mechanism of the socialist market economy: one is to follow the requirements of market economy development and to concretize the law of operation into a system and mechanism; the other is to have a deep understanding and better use of the government The role of the government is to standardize, institutionalize, and rule by law the role of the government. Market and government are the two basic elements of building a modern economic system. Understanding the new normal, adapting to the new normal, and leading the new normal are the general logic of China's economic development. The economy has entered a new normal, and the growth rate has shifted from high-speed growth to medium- and high-speed growth; the development mode has changed from extensive growth of scale and speed to intensive growth of quality and benefit; the economic structure has shifted from incremental expansion to the depth of adjustment of stocks and optimization of incremental growth. Adjustment; the driving force of economic development has shifted from traditional growth to new growth points. Adapting to the new normal requires timely reforms and constructions in economic systems, mechanisms, and development systems to conform to the general logic of the development of the new normal. Building a modern economic system is not only to meet the needs of new conditions for economic development, but also a specific measure to recognize, adapt to, and lead the new normal.

Proposed to build a modern economic system, changed the original way of thinking, shifted the focus of thinking about problems to holistic, synergistic, and systematic, thinking more about problems from the perspective of economic operation mechanisms, and changed the previous habit of thinking from the individual, Some areas such as enterprises, departments, and industries are considering the status of reform and construction. Originally thinking about problems from the micro and local areas, we are also solving micro and local problems. Now the focus is shifted to the operation mechanism and system construction, which means that our understanding has been further deepened and improved. The connotation of the modern economic system is to adapt to the laws of the development of the socialist market economy, follow the objective requirements of the economic system and operating mechanism, not only enable the market to play a decisive role in the allocation of resources, but also give full play to the role of the government, and strive to build an effective market mechanism. , An economic system with vigorous micro-subjects and a degree of macro-control has continuously enhanced China's economic innovation and competitiveness.

In a nutshell, this modern economic system has the following characteristics:

First, the construction of a modern economic system is linked to the reform of the operating mechanism of the market economy. It is also the integration of economic development into the macro-framework of the modern economic system, highlighting the study of operating mechanisms. For example, in-depth research on the general laws governing the allocation of resources by the market, and “deepening the supply-side structural reform”, “must put the focus of economic development on the real economy, and improve the quality of the supply system as the main direction of attack”. This is not only a practical problem of current economic development, but also a holistic, overall, and macroscopic problem, which links the solution of current problems with long-term construction. Another example is to solve the "agriculture, rural areas, and farmers" issues, "adhere to the priority development of agriculture and rural areas", "establish and improve the urban-rural integration development system, mechanism and policy system, and accelerate the modernization of agriculture and rural areas", "promote the integrated development of rural primary, secondary and tertiary industries, and support and Encourage farmers to find jobs and start businesses, and broaden income-increasing channels", etc. All aspects of rural development and the rural economy are the foundation of the national economy. It is a basic project to firmly hold the jobs of the Chinese people in their own hands. It is also a key issue to be solved by the modern economic system. This involves not only economic issues, but also a series of system construction, such as the reform and construction of the rural collective property rights system, the construction of the agricultural management system, and the construction of rural grassroots organizations. The holistic and systematic nature of the problem determines that the construction of a modern economic system also involves a change in concepts and a change in the focus of thinking about problems.

Second, the construction of a modern economic system is not just a problem of local areas, but also involves the support of regional coordinated development strategies and the promotion of a new pattern of comprehensive opening up. A modernized economic system is a large pattern of overall coordinated development and full opening. Such as speeding up the development of poverty-stricken areas, "promoting the development of the western region to form a new pattern, deepening reforms and accelerating the revitalization of old industrial bases such as the Northeast, and giving full play to advantages to promote the rise of the central region", establishing a more effective new mechanism for coordinated regional development , "With the focus on the construction of the'Belt and Road', we will continue to pay equal attention to bringing in and going out, strengthen the open cooperation of innovation capabilities, and form an open pattern of land-sea domestic and foreign linkages and mutual assistance between the east and the west." Implement a high level of trade and investment liberalization, expand the opening up of the service industry, and protect the legitimate rights and interests of foreign investment. Optimize the layout of regional opening, "give the pilot free trade zone greater reform autonomy, explore the construction of free trade ports. Innovate foreign investment methods, and promote international production capacity cooperation",

The third is that accelerating the improvement of the socialist market economic system, operating mechanism, and building a modern economic system are an overall project in the same direction. The problem to be solved in building a modern economic system is the problem of operating mechanism. There are a large number of problems that are solved by the laws of the market economy, and many problems are solved by the role of the government. The role of the market is also the role of objective laws, and it has nothing to do with different social systems and there is no ideological difference. However, the role of the government is different, because our government is a people-centered government led by the Communist Party of China. In the process of promoting sustained and healthy economic development, it is guided by the five new development concepts. This is precisely a society with Chinese characteristics. The unique advantages of the development and operation of the socialist market economy.

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