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[Rednet.cn] Liu Siwei: The Biggest Characteristic of Chinese Economic Theory Innovation since the Reform and Opening-up

2018-10-09 15:14:58

Introduction: Forty years after the reform and opening up, the most fruitful and characteristic innovation of economic theory is the innovation of socialist market economy theory with Chinese characteristics. From the discussion that the socialist planned economy in the early stage of reform can be introduced into the market economy, and the integration of the planned regulation and market regulation, to the Thirteenth National Congress of the Party confirms that there is planned commodity economy in China's socialist; in the Third Plenary Session of the 18th CPC Central Committee, it was clearly defined that the economic reform target is the socialist market economy. In the 18th National Congress of the Communist Party of China, General Secretary Xi Jinping stressed that the market should play a decisive role in the resource allocation and the government should better play a positive role. In a word, the innovation and establishment of the China's market economic theory continuously provide theoretical guidance and ideological basis for the reform and opening up of China. In the innovation of China's socialist market economic theory, the most prominent thing, in my opinions, is to correctly handle the relationship between the government and the market, and improve the theoretical and practical innovation in macroeconomic regulation and control.

Forty years since the reform and opening up, China's economic development has created a miracle in the world economic history. China has quickly become a middle income country from a low-income country, and from a country with small economic aggregate to a country with large economic aggregate, and is becoming an economic power. While its economic aggregate is second only to that of the United States, China has been firmly positioned as the world's largest trading country, the largest manufacturing country and the largest network country. The theory guides the action. Since the reform and opening up, the historic breakthrough in China's economic development is closely related to the major innovation in China's economic theory.

Forty years since the reform and opening up, from the macro economy to the micro economy, from the theoretical economy to applied economy, there are many innovations in the economic theory, economic thought and economic point of view and methodology. However, in my opinions, the most fruitful and characteristic innovation of economic theory is the innovation of socialist market economy theory with Chinese characteristics. I was transferred from the government authority to the school to teach economics from September 1978. Back then, it was the discussion of truth criterion in 1978 that opened the prelude of the innovation of the basic economic theory of Chinese socialism. The ideological emancipation broke through the forbidden zone of the traditional left socialist economic viewpoints, such as, the agriculture can be contracted through joint production, and the state-owned enterprises can implement the decentralization of power and transfer of profits. In addition, bonus, profits, free trade, transport for sale over a long distance, responsibility for one's own profit and loss, personal interests and other concepts can be taught in the classroom. From the discussion that the socialist planned economy in the early stage of reform can be introduced into the market economy, and the integration of the planned regulation and market regulation, to the Thirteenth National Congress of the Party confirms that there is planned commodity economy in China's socialist; in the Third Plenary Session of the 18th CPC Central Committee, it was clearly defined that the economic reform target is the socialist market economy. In the 18th National Congress of the Communist Party of China, General Secretary Xi Jinping stressed that the market should play a decisive role in the resource allocation and the government should better play a positive role. In a word, the innovation and establishment of the China's market economic theory continuously provide theoretical guidance and ideological basis for the reform and opening up of China.

The innovation of the socialist market economy theory is large system engineering. Since the reform and opening up, tens of thousands of experts and scholars, leading cadres and entrepreneurs participated in this great theoretical innovation. Its contents involves in the innovation in the basic socialist economic system and the theory of the ownership system, theory of property rights, theories of the socialist distribution, exchange and consumption, and the reform theory of the state-owned enterprises; in addition, it also involves the innovation in China's industrial economy and industrial economy, agricultural economy, commercial economy, financial economy, open economy, and ecological economy theory, and the innovation in China's regional economy and urbanization theory, etc.

In the innovation of China's socialist market economic theory, the most prominent thing, in my opinions, is to correctly handle the relationship between the government and the market, and improve the theoretical and practical innovation in macroeconomic regulation and control. The most essential characteristics of China's socialist market economy is, under the premise of adhering to the leadership of the Chinese Communist Party, that the basic economic system based on socialist public ownership is organically combined with the market economy mechanism, how to achieve the effective combination of the visible and invisible hands, and the political advantages under the leadership of the Communist Party is combined with the vitality of market economy to form a system advantage, play the advantages and avoid the disadvantages, which is an unprecedented great change and experiment in Chinese history and also a great practice without precedent in human economic history. China is continuously conducting the bold innovation and exploration on the theory and policy of the macroeconomic regulation and control. Firstly, when playing the invisible role of the market, China should fully play the visible and positive role of the government. According to the innovation of the policies and theory, we will vigorously guide and support the healthy development of various market subjects and stimulate the economic cells. For examples, a series of supporting and cultivating policies and measures for the development of the state-owned enterprise, township enterprises, private enterprise, foreign-capital enterprises and joint-stock enterprises were introduced successively, making the rapid growth of China's market subjects be the basis for the rapid economic rise of China. Secondly, China actively responds to the market risk and abnormal fluctuation of the market through the comprehensive application of the financial monetary policy and administration means, which greatly reduces the negative effect of the international financial crises and makes China economy stable. For example, from 1980s to the early 1990s, three severe inflations of the commodity markets were effectively and timely controlled through the macroeconomic regulation and control. From the late 1990s to the new century, China successively responded to the shock of the three external financial crises, namely, Asian financial crisis, American financial crisis, and European debt crisis. Thirdly, through the direct application of the administrative, economic and legal means, the excess production capacity, excess products and other aspects are handled, and the industrial structure is adjusted, clearing the market in time, and continuing the long cycle of economic growth. For examples, strategies adopted in supply-side structural reform in recent years, such as "three cuttings, one reduction and one supplement", fully reflected the significant innovation on the macroeconomic regulation and control thought of Xi Jinping. Fourthly, it is necessary to resolutely reverse the dislocation of the administrative power and the market mechanism, cut off the interest chains between the public power rent-seeking and corruption, accelerate the transformation of government functions, establish the close and clear political and business relations, and build a good business environment. In a word, the constant innovation of macroeconomic regulation and control theory and practice not only makes China's economy avoid the risk of "hard landing" caused by Keynesianism, but effectively reduces the adverse effect of Austrian neo-liberalism thought on China's economic development.

In the reports of the 19th National Congress of the Communist Party of China, General Secretary Xi Jinping stressed that "To speed up and improve the socialist market, it is necessary to create a fair, competitive and efficient market and business environment". According to the actual situation of the province, we should start from the following aspects: The first thing is to abolish the local laws, regulations and systems that impede the uniform market and fair competition, and eliminate all kinds of prejudices against the ownership system, industry, scales and unit, enable the market subjects actively participate in the innovation and entrepreneurship. The second thing is to further strengthen Party self-discipline, reverse the dislocation of the administrative power and the market mechanism, cut off the interest chains between the public power rent-seeking and corruption, establish the close and clear political and business relations, and accelerate the healthy development of the private economy of our province. The third thing is to, according to the deployment of the central government, do a good job in the new round of reform of provincial, municipal and county governmental institutions, deepen the streamline administration and institute decentralization, and speed up the transformation of governmental functions. Fourthly, it is necessary to continue to speed up the government's "reform of streamlining administration, delegating power and optimizing services", improve the negative list system, and reduce the levels and links of the administrative examination and approval, to save the time of the public and various market subjects as much as possible, build a service-oriented government that the people are satisfied with, and reduce the institutional transaction costs of enterprises. Fifthly, the top leaders of Party and governments at all levels should personally focus on the optimization of the marketing environment, prevent misconduct, and non-action and slackness.

About the author: Liu Siwei, male, was born in Quyuan District, Yueyang City, Hunan Province in February 1946. In 1970, he was graduated from Renmin University of China majoring in Trade and Economy as an undergraduate. In June 1992, he was promoted to a professor of economics. He previously served as Director of the Department of Trade and Economics of Hunan University of Commerce, Director of Department of Business Administration, Director of Scientific Research Department, Director of the Institute of Economic Management, and Dean of School of Economics and Trade. Currently, he is the Level-I Honorary Professor of Hunan University of Commerce, Director of Academic Committee of the university, Dean of Institute of Economy and Trade Development, chief expert of the Modern Circulation Theory Research Base of Hunan Province, and a doctoral tutor of Central South University. Since 1998, he has served as a judge of the Applied Economics Group of the National Philosophy and Social Science Planning Fund Project, and concurrently served as Vice President of National Research Institute of Business Economics Teaching of the Colleges and Universities, Vice President of China Consumer Economics Society, Counselor of People's Government of Hunan Province, committee members of Academician and Expert Advisory Committee of Hunan Province, and many other social positions.

Link: https://moment.rednet.cn/rednetcms/news/20180702/1329243.html?from=timeline 


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