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Deeply Understand the Transition of China’s Economy to High-quality Development

Submit Time:26-07-2018 | Zoom In | Zoom Out

Author:Wang Tongsan | Source:People’s Daily (June 07, 2018)

Abstract:

  At the central economic work conference called at the end of 2017, Comrade Xi Jinping pointed out that, as the socialism with Chinese characteristics had come to the new era, the economic development in China had also entered a new era, and the basic feature was that the China’s economy had shifted from the phase of rapid growth to the one of high-quality development. Promoting the high-quality development is the inevitable demand in maintaining the sustained and healthy development of economy, in adapting to the change of principal contradiction facing Chinese society and building a modern socialist country in all aspects, and in following the economic law in development. A deep understanding of the transition of China’s economy to the phase of high-quality development is of important significance in deeply cognizing the high-quality development and powerfully promoting the high-quality development.

  Grasping the inevitability of transition to high-quality development

  The transition to the high-quality development phase is the objective demand of the economic development of China coming to the new era. In essence, the economic development of China coming to the new era is that, after 40 years of unremitting efforts in reform and opening up, the economic scale of China has grown rapidly, and come to the new phase of history to change from big to strong. In the initial period of reform and opening up in the last century, as a country with the largest population in the world, China's economic aggregate ranked only at the eleventh place in the world. Today, China's economic aggregate has steadily ranked at the second place in the world. Since the 18th National Congress of the CPC, China’s economy development has marched to the new phase of transition from big to strong, a period to secure a decisive victory in building a moderately prosperous society in all aspects, and further, we will, on the basis of completing the building of a moderately prosperous society in all aspects, start the new march on the construction of a modern socialist country in an all-round way. The economic foundation of a modern socialist country is the significant improvement of the level of social productive capacity, and the core is the high quality of economic development. If at the beginning of reform and opening up the primary issue in economic development of China was insufficient quantity, so we needed “fast”, then, the primary issue in the new era is to achieve high quality development, so we must stress on “good” first.

  The transition to the high-quality development is the objective demand of the evolution of principal contradiction in society. In the report at the 19th National Congress of the CPC, Comrade Xi Jinping pointed out: “As socialism with Chinese characteristics has entered a new era, the principal contradiction facing Chinese society has evolved. What we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life.” In the initial period of reform and opening up, to solve the principal contradiction in society at that time, the “contradictions between the daily growing material and cultural demand of people and the backward social production”, we had to develop social productive force as fast as possible, and our work in all aspects must cooperate with and follow the rapidly growing economy. After years of efforts, China's economic volume has significantly increased and its economic strength has significantly improved, the previous backward state of productivity has changed considerably, the factors restricting the development of productive force are more reflected by the unbalanced and inadequate development of economic and social development, especially, the sharp contradiction in the economic structure, the outstanding problems in production efficiency, the lagging behind construction of society and people's livelihood and the tightening restriction by resources and environment. To solve the problem of unbalanced and inadequate development, we must promote high-quality development. On the other side of the principal contradiction in society, i.e. the demand from the people, the ever-growing demand of people for a better life is multi-dimensional, including not only rich material and mental life, but also the guarantee and upgrading of democracy and rule of law, and of fairness and justice, and also including the demand for a safe and good ecological environment. Only by realizing high-quality development can we meet the higher demand from people for material and cultural life, and lay a solid material foundation for fully meeting the people’s demand for a better life in all aspects. Therefore, under the condition that the principal contradiction in society has changed, promoting the high-quality development has become a critical measure to solve the principal contradiction in society, and the fundamental requirements to determine the development ideas, formulating economic policies and implementing macro level regulation at present and in a period to come in the future.

  The transition to the high-quality development is the objective demand in properly doing the economic work at present. The central economic work conference called at the end of 2017 made all-round deployment to promote the high-quality development, and proposed work in 8 key areas including deepening the supply-side structural reform, stimulating the vitality of all forms of market players and implementing the rural vitalization strategy. As required by the 19th National Congress of the CPC, we must take tough steps to forestall and defuse major risks, carry out targeted poverty alleviation, and prevent and control pollution in the coming 3 years, and this also requires promoting high-quality development. For example, one of the main work tasks in forestalling and defusing major risks is to forestall and defuse financial risks, and guard the baseline that no systematic financial risk should occur. To forestall and defuse financial risks, we must work on two aspects, the first is to strengthen macro level regulation and financial oversight, and the second is to improve the asset quality, management quality and operation quality of the financial sector. Neither can be biased. For this purpose, finance must serve the main line of supply-side structural reform, better serve the real economy, and promote the favorable circulation of finance with real economy, finance with real estate and within the financial system; we must strengthen the prevention and disposal of risks in main areas, resolutely combat financial activities violating laws and regulations, and strengthen the construction of supervision systems in weak areas. These policies and measures are all aimed at improving the operation quality of finance and the quality of finance serving the real economy, and are important contents in promoting high-quality development in essence.

  Grasping the specific implication of high-quality development

  The high-quality development has set the new direction of economic development in China, and is the theoretical summary and development requirements with scientific connotation. We can grasp its specific implication at least on the following three aspects.

  The high-quality development at the microscopic level. Microeconomy is the foundation of the whole social economy. To achieve high quality development, we must improve the quality of economic development at the microscopic level. First, the producers and operators should ensure that their products and services meet the quality requirements set forth by laws and regulations and can meet the quality demands of consumers. In 1993, China promulgated for implementation the Product Quality Law of the People's Republic of China, which was amended twice in 2000 and 2009, providing the legal institutional guarantee for the quality control of products in China. Producers and operators should endeavor to improve the product and service quality, and this is the important microscopic foundation to realize high-quality development. Second, producers and operators should continually raise the operation and management standard. Improving the efficiency and return of production and service is an important basis for the high-quality development of enterprises, and establishing the modern enterprise system is the fundamental guarantee to realize high-quality development of enterprises. Finally, innovation and entrepreneurship should be actively encouraged. The boldness to blaze with new trial and to make innovation independently is the fundamental motive force for high-quality development, and popular entrepreneurship and innovation is the only route to converge the creeks of microscopic entrepreneurship and innovation into a big river of high-quality development in the whole society.

  The high-quality development at the macroscopic level. The macroeconomic conditions reflect the overall economic level of a country. In the new era, only by realizing the high-quality development at the macroscopic level, can we realize the socialist modernization and the great rejuvenation of the Chinese nation on the foundation of completing the building of a moderately prosperous society in all aspects. To realize the high-quality development at the macroscopic level, mainly the following should be well grasped: first, implement the concept of innovative, coordinated, green, open and shared development, to achieve and maintain stable, sound and sustainable development of the overall economy. We should face up to the current problems of unbalanced and inadequate development in China, especially, we must make efforts to solve such problems that the development quality and return is not high enough, the innovation capability is not strong enough, the real economy level should be further upgraded, and the tasks in ecological and environmental protection are arduous. Second, increase the input/output effect of the overall economy, and definitely cut the cost, especially the management cost at various levels. The emphasis is to lower the production cost and administrative cost of enterprises by allowing the market to play a decisive role in resource allocation and giving better play to the role of government. Third, on macroeconomic management, we should further enhance the ability to pre-determine and identify various economic risks such as market risks, external risks and especially financial risks that might occur, and take effective measures in good time, to avoid the formation of risks and defuse the impact by risks or mitigate the influence of risks. Fourth, further enhance the capability to deal with major sudden events in economic area especially major external sudden events. The capability to deal with major events mainly includes: material capability such as that to deal with sudden events in energy, grain and foreign exchange reserves, the policy response capability such as information collection and processing power and reservation of emergency plan to deal with such events. On the aspect of pre-judging and identifying risks and dealing with major sudden events, the macro level regulation is an important embodiment of the overall economic development quality of a country.

  The high-quality development of social and people's livelihood undertakings. The ultimate goal of high-quality development of economy is to meet the people’s needs for a better life. The transition of economy to high-quality development must be settled on the high-quality development of social and people's livelihood undertakings. This is mainly reflected by: first, the social public products such as education, medical service, old-age care and social security can meet the demand of all residents in both quantity and quality. Second, it can provide fairly sufficient employment opportunities, form a basically reasonable income distribution system and mechanism, and steadily increase the overall income of residents, the middle-income group can continue to grow and poverty can be basically eliminated. Third, the social atmosphere is positive, the cultural undertakings are developing vigorously, people's mental life is increasingly enriched, the social cultural and ethical level is continuously improving, and the social atmosphere is fair, just, democratic and harmonious. Fourth, the concept of green development has been deeply rooted in the hearts of the people, the ecological environment has been fully protected, the living environment of residents is beautiful and livable, and people live in harmony with nature.

  Grasping the realizing route of high-quality development

  High-quality development is the important foundation for building China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful. It is a process demanding unremitting efforts from transition to the phase of high-quality development to really realizing high-quality development. We should, take the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guidance, follow the market laws, allow the market to play a decisive role in resource allocation, give better play to the role of the government, and promote the China’s economy to continually advance in realizing high-quality development.

  Unswervingly and comprehensively deepen the reform. As the economic development of China coming into the new era, the reform now faces more arduous tasks, and this needs our determination without any hesitation. We must adhere to and improve the socialist system with Chinese characteristics, keep modernizing the governance system and governance capability of our country, and resolutely eliminate all outdated ideas, concepts and institutional malpractices, break through barriers of fixed interests, absorb the beneficial results of human civilization, and speed up the construction of a complete, scientific, standardized and effective institutional system. We must give full play to the advantages of the socialist system of China, to lay a solid institutional foundation for the high-quality development. We should further improve the socialist market economy system, continually enhance the motive force of producers and operators to improve production and services and to open up and make innovation, and realize the transition from made-in-China to created-in-China, from China speed to China quality, and from a big manufacturing country to a powerful manufacturing country.

  Actively pushing ahead the supply-side structural reform. The principal contradiction in macroeconomic operation is that between the aggregate supply and aggregate demand. In the long run, of the two sides of contradiction, aggregate supply and aggregate demand, the supply side is the main aspect of the contradiction, only when the problems of the supply side have been well solved, can we fundamentally promote macroeconomic development with high quality. Therefore, pushing ahead the supply-side structural reform is of decisive significance to realizing the high-quality development.

  Bring forth new ideas and improve macro level regulation. At either the micro level or the macro level, it requires a good and stable grand environment to achieve high-quality development, and innovation and improving macro level regulation is the important guarantee to provide such a grand environment. Experience tells us that seeking improvement in stability is a magic weapon for macro level regulation work. At present, to bring forth new ideas and improve macro level regulation, we should give play to the strategic guiding role of national development planning, keep on improving macro level regulation by adapting to changes in the main contradiction in the economic development of our country, make decisions at the right time and take correct prescriptions.

  Actively expand and deepen opening to the outside world. An important demonstration of high-quality development is the upgrading of international competing power. The international competing power cannot be upgraded by closing the door to practice protectionism, or daring not to fight on the international market. International competing power is demonstrated not only by the market share of products and the import and export power, but more by the product standards of a country being accepted by international industrial standards. To realize high-quality development and raise the international competing power, we must adhere to the basic national strategy of opening to the outside world and to opening the door to make construction. We should actively push ahead the Belt and Road international cooperation, and speed up the formation of a new pattern of overall opening-up.

  Speed up the ecological development. The green waters and hills can become gold hills and silver hills only by properly protecting them. Ecological development is an important condition for high-quality development, and good ecological environment is itself the achievement of high-quality development. Ecological development is meritorious for the present and beneficial to the future. We should firmly erect the view of socialist ecological civilization, and promote the formation of a new pattern of modernization construction with harmonious development of man and nature.

  Give better play to the leading and promoting role of theoretical innovation. In textbooks of economics, microeconomics mainly unfolds from economic efficiency, while macroeconomics mainly focuses on aggregate analysis. It is a new subject of economic theory innovation put forth by the new era how to study and describe the question of economic development quality at both microscopic and macroscopic levels by applying the modern economy analysis technology. Such theoretical innovation must be rooted in the great practice of promoting high-quality development in China, and contribute to the transition of China’s economy to the phase of high-quality development.

  (Author entity: Chinese Academy of Social Sciences)


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