Allow the Market to Play the Decisive Role in Allocating Resources

New important conclusions were made in the “Decision of the Central Committee of the Communist Party of China on Several Major Issues of Comprehensively Deepening Reform” adopted by the Third Plenary Session of the 18th CPC Central Committee in November 2013. The “Decision” puts forward, “Closely focus on making the market play a decisive role in the allocation of resources to deepen the reform of the economic system.” The “Decision” also emphasized, “The reform of the economic system is the focus of the comprehensive deepening of reforms. The core issue 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 give better play to government’s role.” In October 1992, the 14th CPC National Congress proposed that the goal of our country’s economic system reform is to establish a socialist market economic system, so that the market can play a fundamental role in the allocation of resources under national macro-control. This major theoretical breakthrough has played an extremely important role in our country’s Reform and Opening-up and economic and social development. For more than 20 years since the 14th CPC National Congress, we have been expanding and deepening new scientific positioning based on practice regarding the relationship between the government and the market. In September 1997, the 15th CPC National Congress proposed, “To make the market play a fundamental role in the allocation of resources under national macro-control”. In November 2002, the 16th CPC National Congress proposed, “Give play to the market’s fundamental role of the allocation of resources to a greater extent”. In October 2007, the 17th CPC National Congress once again proposed, “To give better play to the fundamental role of the market in the allocation of resources from an institutional perspective”. In November 2012, the 18th CPC National Congress clearly proposed, “Give play to the fundamental role of the market in resource allocation to a greater extent and in a wider range.” The Third Plenary Session of the Eighteenth Central Committee of the Communist Party of China further positioned the relationship between the government and the market in theory, which played a very important role in comprehensively deepening the reform. To further handle the relationship between the government and the market, in fact, is to deal with the problem of whether the market plays a decisive role in the allocation of resources or the government plays a decisive role. The market determines the allocation of resources is a general law of the market economy, which must be followed to improve the socialist market economy. It requires that we must actively and steadily advance economic system reform in breadth and depth, promote resource allocation, and achieve maximum benefit and efficiency optimization in accordance with market rules, market prices, and market competition.

The positioning of “making the market play a decisive role in the allocation of resources” is conducive to the establishment of a correct concept of the relationship between the government and the market in the whole Party and society, is conducive to the transformation of economic development mode and government functions, and is conducive to restraining corruption. Emphasize that the market plays a decisive role in the allocation of resources, but not all the roles. Our country implements a socialist market economic system, and we still have to continue to give full play to the superiority of our socialist system and give better play to the role of the government. Giving play to the decisive role of the market in the allocation of resources and giving better play to the role of the government are dialectical and unified, which cannot be emphasized one aspect but neglected the other.