Modernized Economic System

The economic system built in light of the changes in China’s macroeconomic development situation and for the implementation of new development concepts proposed at 19th CPC National Congress. It insists on quality first and benefit first, and requires to transforming backward production modes, consumption patterns and distribution modes, and forming an emerging economic model that maximizes integration of modern technological innovations and a new industrial system that maximizes the optimized allocation of various resources while promoting the construction and strengthening of a high-quality supply system. The Report to the 19th CPC National Congress pointed out that China’s economy has shifted from a stage of high-speed growth to a stage of high-quality development, and is now in a critical period of transforming development mode, optimizing economic structure, and transforming growth momentum. Building a modern economic system is an urgent requirement and a strategic goal of China's development. We must adhere to the principle of quality first and benefit first, and with supply-side structural reforms as the main line, promote changes in the quality, efficiency, and driving force of economic development, improve total factor productivity, step up efforts to accelerate the construction of an industrial system achieving the coordinated development of real economy, technological innovation, modern finance, and human resources, and build an economic system with effective market mechanisms, dynamic micro-entities, and sound macro-regulation, and continuously enhance China’s economic innovation and competitiveness. To build a modern economic system, it is required to deepen the supply-side structural reforms, put the focus of economic development on the real economy, and take improving the quality of the supply system as the main direction, so as to significantly enhance China’s economic quality advantages.

Accelerate the construction of a manufacturing power, accelerate the development of advanced manufacturing, promote the deep integration of the Internet, big data, AI and the real economy, and foster new growth points and form new driving forces in such areas as medium and high-end consumption, innovation leadership, green and low-carbon, sharing economy, modern supply chain, and human capital services, etc. Support the optimization and upgrading of traditional industries, accelerate the development of modern service industries, and raise the level of international standards

Promote China's industry to move towards the mid-to-high end of the global value chain and cultivate several world-class advanced manufacturing clusters. Strengthen infrastructure network construction such as water conservancy, railways, highways, waterways, aviation, pipelines, power grids, information, and logistics. Insist on de-capacity, destocking, deleveraging, cost reduction and improving weak links, optimize the allocation of stock resources, expand high-quality incremental supply, and achieve a dynamic balance of supply and demand stimulate and protect entrepreneurship and encourage more social entities to devote themselves to innovation and entrepreneurship.

Build an army of knowledge-based, skilled, and innovative workers, promote the spirit of model workers and craftsmen, and make it a social norm to honor labor and strive for excellence. To build a modern economic system, it is required to accelerate the building of an innovative country. We shall keep an eye on the frontiers of world science and technology, strengthen basic research, and achieve major breakthroughs in forward-looking basic research and leading original results. Strengthen applied basic research, expand the implementation of major national science and technology projects, and highlight key common technologies, cutting-edge leading technologies, modern engineering technologies, and disruptive technological innovations, so as to provide strong support for building a power in science and technology, quality, aerospace, cyber, transportation, as well as digital China, and a smart society. To build a modern economic system, it is required to implement the rural revitalization strategy and the regional coordinated development strategy. We shall insist on giving priority to the 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, in accordance with the general requirements of industrial prosperity, ecological livability, rural civilization, effective governance, and affluent life. Consolidate and improve the basic rural management system, deepen the reform of the rural land system, and improve the “three rights” separation system for contracted land construct a modern agricultural industry system, production system, and management system, improve the agricultural support and protection system, develop various forms of moderately scaled operations, foster new agricultural management entities, improve the agricultural socialized service system, and realize the organic connection between small farmers and modern agricultural development. We shall intensify support for the accelerated development of old revolutionary base areas, ethnic areas, border areas, and poverty-stricken areas, strengthen measures to promote the development of the western region to form a new pattern, deepen reforms and accelerate the revitalization of old industrial bases in northeast and other places, give full play to advantages to promote the rise of the central region, take the lead in achieving optimal development of the eastern region and establish a more effective new mechanism for regional coordinated development. Build a coordinated development pattern for large, medium and small cities and small towns, with urban agglomerations as the main body, and accelerate the urbanization of the population transferred from agriculture. To build a modern economic system, it is required to accelerate the improvement of the socialist market economic system. It is required to focus on improving the property rights system and the market-oriented allocation of factors, so as to achieve effective incentives for property rights, free flow of factors, flexible price response, fair and orderly competition, and survival of the fittest by enterprises. It is required to improve various state-owned asset management systems, promote the preservation and appreciation of state-owned assets, and promote the strengthening, optimization and expansion of state-owned capital. It is required to deepen the reform of state-owned enterprises, develop a mixed-ownership economy, and cultivate world-class enterprises with global competitiveness. It is required to fully implement the market access negative list system, support the development of private enterprises, stimulate the vitality of various market entities, break administrative monopoly, prevent market monopoly, and accelerate the market-oriented reform of factor prices.

Innovate and improve macro-control, give full play to the strategic guiding role of the national development plan, and improve the coordination mechanism of fiscal, monetary, industrial, and regional economic policies. Accelerate the establishment of a modern fiscal system and a fully standardized and transparent budget system with scientific standards and strong constraints. Deepen tax system reform and financial system reform. To build a modern economic system, it is required to promote the formation of a new pattern of all-round opening. It is required to focus on the construction of the “Belt and Road”, strengthen open cooperation in innovation capabilities, and form an opening pattern characterized by links across land and over sea, and links running eastward and westward.

Expand foreign trade, cultivate new trade formats and new models, and promote the building of a strong trade power. It is required to greatly relax market access, expand the opening up of the service industry, and protect the legitimate rights and interests of foreign investment. It is required to innovate foreign investment forms, promote international production capacity cooperation, form a global trade, investment and financing, production, and service network, and accelerate the cultivation of new international economic cooperation and competitive advantages.