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Construction of modernized system outlines China’s economy in new era

Updated: Oct 23,2017 4:49 PM

The idea of building a modernized economic system made its debut in the report of the 19th National Congress of the Communist Party of China (CPC) as an urgent demand and strategic objective for China’s economic development.

Moving on to a crucial juncture in shifting development models, optimizing economic structure, and transforming growth drivers, China’s economic development has progressed from a phase of high-speed growth to a stage of high-quality development.

Bai Chong’en, a professor at Tsinghua University, observed that the transformation of China’s development mode is aimed at satisfying the people’s ever-growing needs for a better life and achieving a more balanced development.

The overcapacity in some industries and the unmet demands for cost-effective goods are escalating the incompatibility between the supply-side and the upgraded demand-side. Against this backdrop, advancing the supply-side structural reform calls for cutting overcapacity, cultivating new industries, restructuring traditional industries, and expanding the investment in technological innovation, according to Miao Wei, secretary of Party Leadership and minister of Industry and Information Technology.

As the report says, the real economy must be the priority of development for the purpose of constructing a modernized economic system. “Technology, capital, and labor are the utmost crucial elements underpinning high-quality development of the real economy,” said Xu Zhengzhong, a professor at the China National School of Administration.

The report also suggests that innovation is the primary development driver and the strategic support for constructing a modernized economic system. “We should draw up a new layout for our industries and promote cooperation among production, education, and research,” said Hong Maochun, a member of the Chinese Academy of Sciences (CAS).

Agriculture, rural development, and farmers are the top concern of the Party’s work. The report puts forward a strategy for rural reinvigoration, which clarifies that the land-contracted relationships will be maintained over the long term. Meanwhile, 30 years will be added to the contracts after the second expiration.

Establishing a more effective mechanism of regional coordinated development is also stressed in the report. Zheng Yang, a delegate to the 19th CPC Congress and director of the Shanghai Finance Office, said that a new pattern of regional coordinated development will usher in continuing potential and vigor for China’s economy, rising to an upgraded engine facilitating sustainable economic development.

Additionally, the report indicates that we should accelerate the improvement of a socialist market economic system, which entails the prioritization of improving the property rights system and allocation of market factors. We should utilize the incentive effect of property rights, free flow of factors, flexible response in prices, and fair and orderly competition.

“The construction of a modernized economic system will propel China to blend into the global economy. A fully opened-up China will exert far-reaching influences on the global market and manufacturing industry,” said Wang Jun, a member of the academic committee of the China Center for International Economic Exchanges.