Economic Evolution

The Resolution listed more than 300 reform tasks covering issues concerning economic development, technological innovations and governance improvements.　

Xi Jinping, general secretary of the CPC Central Committee and Chinese president, delivered explanatory remarks on the draft version of the Resolution at the meeting, describing the Resolution as a “pressing need” for China’s development.　

According to Xi, the Resolution was written based on the CPC’s need to “better respond to the evolution of the principal contradiction in Chinese society and to deal with major risks and challenges and secure steady and sustained progress in the cause of the Party and the country.”

　

“It was reform and opening-up that enabled China to catch up with the times in great strides... If we are to break new ground in advancing Chinese modernization on the new journey in the new era, we must continue to rely on reform and opening-up,” Xi said.　

Facing the challenges, China is “in urgent need of a roadmap to guide China’s future development and to achieve our second hundred-year objective,” Qiang Ge, a professor at the Party School of the Central Committee of the CPC and the National Academy of Governance, told NewsChina.　

The “second hundred-year objective” is to turn China into a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by the time the People’s Republic of China (PRC) celebrates its centenary in 2049.

It aligns with what Xi initiated as “new quality productive forces” in September 2023 during an inspection tour to Northeast China’s Heilongjiang Province. According to the Resolution, “new quality productive forces” are characterized by “high technology, high performance and high quality.”　

The Resolution lists “new quality productive forces” as key generic technologies, cutting-edge technologies, modern engineering technologies and disruptive technologies, and pledges to give more financial and institutional support to new industries, industries of the future and strategic industries such as next-generation information technology, artificial intelligence, aviation and aerospace, new energy, new materials, high-end equipment, biomedicine and quantum technology.　

“We will work to facilitate revolutionary breakthroughs in technology, innovative allocation of production factors, in-depth industrial transformation and upgrading, and the optimal combination of laborers, means of labor, and subjects of labor as well as their renewal and upgrading,” the Resolution states.　

It is of key importance to China’s development in the new era, which, according to the Resolution, is undergoing a “new round of scientific and technological revolution and industrial transformation.”　

“Reforms cover various aspects, and the most crucial aim of the reform is to ensure that China’s economy can maintain a medium to high growth rate. That is why economic reform is always the highest priority,” Yan Yilong, deputy director of the Institute for Contemporary China Studies at Tsinghua University (ICCS), told NewsChina.

According to the Resolution, a high-standard socialist market economy refers to a fairer and more dynamic market environment with resources being allocated as efficiently and productively as possible.　

At the third plenary session of the 18th CPC Central Committee in 2013, the CPC emphasized that the core of economic reform is to manage the relationship between the market and the government. The “fairer and more dynamic market environment” proposed in the Resolution, according to Yan, is clearer and more specific than the commitment to make the market fully play its role.　

Yan stressed that market-orientation differs from capital orientation. The former means fair transactions while the latter highlights value increase, which is why a fairer environment is so important, Yan said.　

“For example, the government has failed to play a good role in areas like healthcare, education and public housing, which has exposed those areas to excessive market forces. Meanwhile, in other areas that require more market-oriented operations, the market did not play a decisive role [as the government has pledged],” Zheng Yongnian, director of the School of Public Policy, the Chinese University of Hong Kong-Shenzhen, told NewsChina.　

That is why Zheng paid special attention to remarks in the Resolution that the CPC needs to “lift restrictions on the market while ensuring effective regulation and strive to better maintain order in the market and remedy market failures.”　

“By doing so, we will ensure smooth flows in the national economy and unleash the internal driving forces and creativity of the whole of society,” the Resolution said.　

While continuing to deepen reform of State-owned enterprises (SOEs), the Resolution demands further promotion of the development of non-public sectors by “formulating a private sector promotion law” and “removing barriers to market access.”　

This will ensure that “the competitive areas of infrastructure are open to market entities in a fair manner” and “improving the long-term mechanism by which private enterprises participate in major national projects,” the Resolution reads.　

Other measures include refining financing support policies and systems for private enterprises, improving the legal framework for the long-term regulation of charges levied on enterprises, and for clearing overdue payments owed to private enterprises.　

The latest data from China’s National Development and Reform Commission shows that the number of private entities in China exceeded 180 million by June 2024, accounting for 96.4 percent of the country’s total market entities.

“Sound macro regulation, along with effective governance by the government, is essential for ensuring that we can fully leverage the institutional strengths of our socialist market economy,” the Resolution reads.

　

The supporting institutions’ reforms cover fiscal, tax, finance and other major sectors, and the document demands to “enhance the consistency of macro policy orientation” by “improving the national strategic planning system and policy coordination mechanisms.”　

Yan Yilong believes that the remarks on “enhancing the consistency of macro policy orientation” are significant. “China’s strategic planning is always for the medium and long term, and we have to consider how to make our short-term policies conform to long-term strategic planning and the country’s general orientation. Therefore, we have to pay close attention to coordination and connection between different specific policies,” he said.　

“Actually, our reforms will not overturn previous long-kept measures, but rather will keep upgrading or innovate them,” he added.　

His words are represented by one of the guidelines of deepening reforms listed in the Resolution: consolidate foundational systems, refine basic systems and innovate important systems.　

“Every third plenary session is essentially a process of institutional modernization,” Yan said. “Modernization includes modernization of materials, institutions and humans, and that of institutions is the guarantee to realize that of materials and humans... And institutional modernization is to further emancipate productive forces by reforming the relations of production,” he added.　

“Compared to the third plenary session of the 18th CPC Central Committee in November 2013, the reform package announced by the third plenum of the 20th CPC Central Committee is obviously more systematic, integral and comprehensive,” Zhang Liqun, a researcher at the Marco-Economy Research Department of the Development Research Center of the State Council, told NewsChina, adding that the latest plenary session is focused on how to realize Chinese modernization overall.

This third plenary session, according to Yan, is to further fulfill the goal. The Resolution defines the overall objective of deepening reforms as “having finished building a high-standard socialist market economy in all respects, further improved the system of socialism with Chinese characteristics, generally modernized system and capacity for governance, and basically realized socialist modernization” by 2035 and “building China into a great modern socialist country in all respects” by the middle of this century.　

According to Yan, the Resolution of the third plenary session targets not only objectives and existing issues but also future planning. In other words, it is highly forward-looking. For example, the Resolution describes how to “improve the systems for promoting full integration between the real economy and the digital economy” and to “improve the population development strategy in response to population aging and the declining birth rate.”　

This Resolution follows the gradual reform tempo that China has adopted since the 1980s and addresses practical issues pragmatically, noted Professor Huang Yiping, Dean of the National School of Development at Peking University, during a forum hosted by the Beijing-based think tank China Center for Globalization on July 24.　

The Resolution also impresses experts with its emphasis on the effect and timeline of the reforms, demanding the whole Party to “work in concert from top to bottom across all departments and regions to set the tasks, timelines, and priorities for reform in a well-conceived way,” and “designate competent departments for implementing each reform initiative and clearly define their responsibilities.”　

According to the Resolution, the reform tasks laid out in the document shall be completed by the time the People’s Republic of China celebrates its 80th anniversary in 2029.　

“It’s a very specific timeline which has set higher requirements on promoting the reforms... Clear deadlines mean clearer objectives and roadmaps,” Qiang Ge said.　

“We have 11 years until 2035, two Five-Year Plan periods. The third plenary session actually lists the reform tasks for the following five years,” Yan said.　

“Now, it seems even more important to promote and implement the reforms if we have to complete all of those tasks on time... It creates a strong sense of responsibility and mission, and also lots of pressure,” Zhang said.