Combining Efficient Markets with Promising Governments to Promote High Quality Development | Resources | Government
Author: Chen Zirui
How to deal with the relationship between the market and the government is an important issue in the process of Chinese path to modernization. The report of the 20th National Congress of the Communist Party of China pointed out that "fully leverage the decisive role of the market in resource allocation and better leverage the role of the government.". This is the basic positioning of the relationship between the market and the government. High quality development is the primary task of comprehensively building a socialist modernized country. How to understand the role of the market and government in the process of high-quality development, and achieve a positive interaction between effective markets and promising governments, is a theoretical and practical question that needs to be answered in the process of high-quality development.
The role of efficient markets in the process of high-quality development
Efficient market refers to a market that can optimize resource allocation and achieve Pareto optimality through price transmission mechanisms. The socialist market economy system is an important component of China's socialist basic economic system and also a institutional support for high-quality development. The role of effective markets in promoting high-quality development is mainly reflected in efficient allocation of production factor resources, promoting the formation of market entities, promoting enterprise technological innovation, and promoting high-level opening up to the outside world.
Efficient allocation of production factor resources. The essence of a market economy is that the market determines the allocation of resources. Enterprises are the main body of market resource allocation, and the market is the most effective way to allocate resources. The general rule of a market economy is to allocate resources based on market rules, market prices, and market competition. The allocation of production factor resources is a prerequisite for production. Through market mechanisms, efficient allocation of production factor resources such as land, labor, capital, technology, and data can be achieved, maintaining a dynamic balance between supply and demand of production factor resources, and transforming them into real production forces. This is the starting point for high-quality development.
Promote the formation of market entities. Without entities, there is no market. Independent and dynamic market entities are the prerequisite for the operation of market economy and the basic carrier of high-quality development. An effective market can promote the development and growth of existing market entities, as well as the generation of new market entities. China has over 100 million market entities, which are the main driving force for promoting high-quality development. Market entities have the enthusiasm, initiative, and creativity for economic development in order to enter the market, form a market, seek stability, expand the market, and promote high-quality economic development.
Promote technological innovation in enterprises. Technological innovation is the driving force for high-quality development. Without technological innovation support, high-quality development cannot be achieved. The quality of development to a certain extent depends on the content and level of technological innovation. A market economy is an economy with sufficient market competition. In order to maintain a competitive advantage in the market, catch up with and surpass competitors, enterprises are bound to increase their investment in research and development funds, improve the technological content of products through technological innovation, and win competition and the market. As a result, enterprises become the main body of technological innovation and help the country's scientific and technological progress, providing technological innovation support for high-quality development.
Promote high-level opening-up to the outside world. A market economy is an open economy, open to the outside world, and participating in the international circulation is an inherent requirement for high-quality development. Efficient allocation of production factor resources embodies the demand for opening up to the outside world. Many production factor resources come from the international market and rely on the international industrial and supply chains. Therefore, enterprises are required to have a global perspective and allocate resources globally. At the same time, in the relatively stable domestic market, in order to win greater development space, enterprises must go out, expand overseas markets, and participate in international market competition. This drives enterprises to improve product quality, meet the demand for high-quality products in the international market, and thereby promote high-quality development of enterprises.
The role of a promising government in the process of high-quality development
A capable government is a government that does something, does something, and is good at doing something. The government, as the "national agent", controls national resources and can promote high-quality development by establishing a macroeconomic regulation system, providing public services, strengthening market supervision, and preventing and resolving various risks and challenges, highlighting the position and role of a promising government.
Establish a macroeconomic regulation system. Market regulation often has a lag effect. By comprehensively utilizing tools such as monetary policy, fiscal policy, tax policy, and financial policy, governments can correct the overall imbalance in the market, prevent economic overheating, and avoid significant economic fluctuations. After 2012, the Chinese government implemented supply side structural reforms to address issues such as insufficient effective demand, overcapacity, and unreasonable consumption structure in economic development, reducing production capacity, inventory, and leverage, and putting the Chinese economy on a track of high-quality development. China has not implemented the opening of capital and financial accounts too quickly or too early, and has adhered to the government's prudent management of capital flows, effectively preventing large-scale external shocks. Macroeconomic regulation is a guarantee for high-quality economic development and an important manifestation of government action.
Provide public services. High quality development requires a series of public services to support it, and the quality of public services is directly related to the speed and level of high-quality development. The government increases public investment, improves the efficiency of the supply system, ensures the effective supply of public goods, and creates a favorable environment for high-quality development. The government deepens the reform of "streamlining administration, delegating powers, and improving services", continuously improves the policies and legal provisions required for the development of the market economy, regulates the production and business behavior of market entities, reduces the adverse effects of negative externalities on high-quality development, and provides policy support for high-quality development.
Strengthen market supervision. The market has spontaneity and blindness. Without effective supervision of the market, various behaviors that affect fair competition in the market will follow. To compensate for market failure and prevent market distortion, it is necessary to strengthen government supervision and maintain the environment and order of market competition. Establishing a unified national market can suppress market segmentation behavior, break through key bottlenecks that restrict the flow of production factor resources, promote the free flow of production factor resources between regions, and create conditions for high-quality development. The establishment of a unified national market is only possible with government leadership.
Prevent and resolve various risks and challenges. Against the backdrop of the accelerated evolution of the world's unprecedented changes, the process of high-quality development is full of uncertainty and increasing risks and challenges. These risk challenges come from both domestic and foreign sources; There are both those from the political, economic, cultural, and social fields, as well as those from the natural world. If not handled effectively, risk challenges will turn into crises, affecting the overall situation of high-quality development. To promote the modernization of the national governance system and governance capacity, effectively play the role of the government, respond to various risks and challenges, turn crises into opportunities, and ensure stable and far-reaching high-quality development.
Realize the organic combination of effective markets and promising governments
The effective market and the promising government each have their irreplaceable roles and functions in the process of high-quality development. Both are indispensable. Only by achieving an organic combination and complementarity between the effective market and the promising government can we promote high-quality development.
Adhering to the leadership of the Party is the key to achieving an organic combination of an effective market and a promising government. The leadership of the Party is the most essential feature of socialism with Chinese characteristics and the greatest advantage of the socialist system with Chinese characteristics. A capable government is a government under the leadership of the Party, whose actions reflect the Party's will, implement the Party's propositions, and are the executors of the Party's line, principles, and policies. The socialist market economy is a market economy under the leadership of the Party. Only by adhering to the Party's leadership can we coordinate the overall situation, coordinate all parties, and ensure the effective operation of the market and the socialist nature of the market economy. The leadership of the Party ensures consistency and coordination between the effective market and the capable government, which is the key to achieving an organic combination of the two.
Effectively promoting government action through the market. An effective market requires a series of fundamental conditions, and the creation of these conditions is the responsibility of the government. For example, the premise of an effective market is to establish a unified, open, and competitive market economy system, which is the responsibility of the responsible government. The foundation of an effective market is to establish a complete set of laws and regulations to ensure the operation of the market. It is the responsibility of the government to formulate laws and regulations. The government can form an effective market by utilizing national power, improving the basic system of market economy such as property rights protection, market access, fair competition, and social credit, optimizing the business environment. National security is the guarantee for the effective operation and high-quality development of the market. Strengthening the security guarantee system in key areas such as major infrastructure, finance, networks, and data, strengthening the construction of security capabilities in key areas, promoting the modernization of the national security system and capabilities, and resolutely safeguarding national security are the responsibilities of the responsible government. Market effectiveness requires reducing the government's direct allocation of resources and direct intervention in microeconomic activities, delegating economic activities that can be effectively regulated by market mechanisms to the market, and delegating economic matters that the government should not or cannot manage to the market, ensuring that the market and the government each fulfill their respective responsibilities.
Promote market effectiveness through government actions. An effective market is led by a proactive government. In the face of the market, if the government does not take action and lacks proper supervision, the blindness of the market will be fully exposed, leading to significant ups and downs in economic development. The marketization level in China's product sector is increasingly improving, but the marketization level in production factors such as land, labor, and data is still relatively backward, with insufficient market competition vitality. Market entities have different expectations for the future, and the institutional rules in different administrative regions are not unified enough. These issues that constrain the effectiveness of the market can only be resolved through the use of legal, economic, and appropriate administrative measures by the government.
Guangming Daily
[
