context: A major objective of the Third Plenum reform program is to build a high-level socialist market economy. Notably, the government encourages the use of ‘both hands’ to advance reform, urging state-market collaboration. While a strong focus is placed on strengthening state-owned capital, the government also encourages further development of the non-public economy. It aims to consolidate property rights protection, expand market access and guarantee fair competition.
The high-level socialist market economy has to be both vibrant and manageable, contends Hong Yinxin 洪银兴 Jiangsu Xi Jinping Thought Research Centre Academic Committee member.
To invigorate the market, it should be allowed to maximise its role in allocating resources
- advancing competition and ruling out low-quality products
- upholding a market-based incentive system
The following directions have to be taken
- uphold the two-unwavering
- allowing entities of all ownership to participate in market activities fairly
- allow all factors of production to enter the market freely
- guarantee equal and adequate competition
Meanwhile, the state needs to supervise the market further to prevent disorder. To advance social equity, there is also a need for the state to guide market economy operations.
Hong then points out the major systems that require consolidation
- property rights protection
- does not explicitly refer to ownership, but other types of rights derived from it
- safeguard the rights of all market entities
- concrete goals
- prevent the loss of state-owned assets while protecting the assets of private enterprises according to law
- better define property rights to properly align economic risks to benefits
- protect intellectual property rights
- accelerate build-up of data property rights recognition, rights allocation and interest protection systems
- refine market access systems
- allow all market entities to enter all types of markets without boundaries
- concrete goals
- implement a unified negative list system and breakthrough ownership limitations for market entry
- curb administrative and market monopoly
- eradicate urban-rural market division and regional fragmentation
- better regulate financial markets
- remove digital barriers to build a unified nationwide data-sharing platform
- refine the social credit system
- market economy is based on the obligation to contracts
- reward those who preserve their ‘integrity’, and those who do not
- formal: upgrade institutional arrangements
- refine system build-up via legal and non-legal binding means
- strictly penalise those who are involved in fraud or other violations
- improve legal, contract, branding and standard systems
- informal: promote ‘integrity’ as a common moral value