Forming an Economic Order That Is Both "Able to Loosen" and "Able to Control"

The 2024 Central Economic Work Conference, building on practical experience, further deepened systematic understanding of economic work and summarized "five must-coordinate" principles; the foremost is "must coordinate the relationship between an effective market and a capable government to form an economic order that is both 'able to loosen' and 'able to control'." This provides an important guideline for our in-depth understanding and grasp of the relationship between government and market, the core issue of economic system reform.

2024年中央经济工作会议在总结实践的基础上，进一步深化对做好经济工作的规律性认识，概括出“五个必须统筹”，居于首位的就是“必须统筹好有效市场和有为政府的关系，形成既‘放得活’又‘管得住’的经济秩序”。这为我们深入理解和把握政府和市场关系这一经济体制改革的核心问题提供了重要遵循。

Our Party's systematic understanding of handling the relationship between government and market has been further deepened.

我们党对处理好政府与市场关系的规律性认识进一步深化

In the theoretical and practical exploration of socialist economic development with Chinese characteristics, our Party's understanding of how to handle the relationship between government and market under a socialist market economy has been continuously deepening. After the Third Plenary Session of the 11th Central Committee of the Party opened the new era of reform and opening up, especially after the Third Plenary Session of the 12th Central Committee made the decision on carrying out economic system reform, market mechanisms as a means of regulating the economy gradually entered China's economic practice. The report of the 14th National Congress of the Party clearly set the goal of economic system reform as establishing a socialist market economy system, stating that the market plays a fundamental role in resource allocation under the state's macroeconomic regulation and control, and subsequent reform processes have continuously emphasized strengthening and improving the market's fundamental role in resource allocation. Placing the discussion of the government-market relationship on the foundation of the socialist market economy system has deepened our Party's understanding of the relationship between government and market in resource allocation.

在中国特色社会主义经济发展的理论与实践探索中，我们党对社会主义市场经济条件下如何处理好政府与市场关系这一问题的认识，一直在不断深化。在党的十一届三中全会开启改革开放新时期，特别是党的十二届三中全会作出关于开展经济体制改革的决定之后，市场机制作为调节经济的手段逐渐引入我国经济实践。党的十四大报告明确经济体制改革的目标是建立社会主义市场经济体制，同时明确市场在社会主义国家宏观调控下对资源配置起基础性作用，并在此后的改革进程中不断强调加强和完善市场在资源配置中的基础性作用。把政府与市场关系建立在社会主义市场经济体制基础之上加以讨论，使我们党关于资源配置中政府与市场关系的认识更加深入。

Entering the New Era, especially since the Third Plenary Session of the 18th Central Committee made the decision on comprehensively deepening reform, the understanding of the market's role in resource allocation and the relationship between government and market has further deepened. The Third Plenary Session of the 18th Central Committee emphasized, "Economic system reform is the focus of comprehensively deepening reform; the core issue is to handle the relationship between government and market, allowing the market to play a decisive role in resource allocation and better play the role of the government." On the one hand, it elevated the market's role in resource allocation from "fundamental" to "decisive," placing greater emphasis on the importance of market mechanisms; on the other hand, it simultaneously clarified "better play the role of the government," paying greater attention to the effectiveness of government regulation. The Third Plenary Session of the 20th Central Committee made a decision on further comprehensively deepening reform, proposing "to fully leverage the decisive role of the market in resource allocation and better play the role of the government." The 2024 Central Economic Work Conference proposed, "must coordinate the relationship between an effective market and a capable government to form an economic order that is both 'able to loosen' and 'able to control,'" reflecting our Party's continuous deepening of systematic understanding of economic work, and listed "exerting the traction role of economic system reform, promoting the landing and tangible results of landmark reform measures" as one of the nine key tasks to be done in 2025, greatly enhancing the practical firmness and theoretical consciousness in handling the government-market relationship.

进入新时代，特别是党的十八届三中全会作出关于全面深化改革的决定以来，对市场在资源配置中的作用及政府与市场关系的认识进一步深化。党的十八届三中全会强调，“经济体制改革是全面深化改革的重点，核心问题是处理好政府与市场的关系，使市场在资源配置中起决定性作用和更好发挥政府作用”。一方面，把市场在资源配置中的作用从“基础性”提升到“决定性”，更加强调市场机制的重要性；另一方面，同时明确“更好发挥政府作用”，更加注重政府调控的有效性。党的二十届三中全会作出进一步全面深化改革的决定，提出“充分发挥市场在资源配置中的决定性作用，更好发挥政府作用”。2024年中央经济工作会议提出，“必须统筹好有效市场和有为政府的关系，形成既‘放得活’又‘管得住’的经济秩序”，体现了我们党不断深化对经济工作的规律性认识，并将“发挥经济体制改革牵引作用，推动标志性改革举措落地见效”作为2025年要抓好的九大重点任务之一，极大提升了处理好政府与市场关系在实践上的坚定性和理论上的自觉性。

The institutional foundation of an effective market lies in building a high-level socialist market economy system.

有效市场的制度基础在于构建高水平社会主义市场经济体制

The basic requirements of an effective market are reflected in two aspects: First, fully play the decisive role of the market in resource allocation, effectively ensuring the sufficiency of the market's role. Practice shows that the market economy is the most effective mechanism for resource allocation. Achieving optimal resource allocation efficiency and maximum benefits requires giving full play to the market mechanism. Second, continuously enhance the intensity of the market mechanism's constraints on competitive behavior in resource allocation. In terms of institutions, enterprises in the market should be able to truly accept the hard constraints of market rules. Market rules must reflect fair competition, truly implement the principle of equal exchange in the formation of transaction conditions, and the market competition process should effectively prevent monopoly behaviors from undermining fair competition.

有效市场的基本要求体现在两方面：一是在资源配置中充分发挥市场的决定性作用，切实保障市场作用的充分性。实践表明，市场经济是实现资源配置最有效的机制。实现资源配置效率最优化和效益最大化，必须充分发挥市场机制作用。二是不断提升市场机制对资源配置竞争行为的约束强度。在制度方面，应使市场中的企业能够真正接受市场规则的硬约束。市场规则要体现公平竞争，在交易条件的形成过程中真正贯彻等价交换原则，市场竞争过程中应切实防止垄断行为对公平竞争的破坏。

Building a high-level socialist market economy system is the necessary institutional foundation for handling the relationship between government and market, forming an effective market, and thereby achieving an economic order that is both "able to loosen" and "able to control." Its core lies in constructing a high-level market competition system and basic market economy institutions.

构建高水平社会主义市场经济体制是处理好政府与市场关系，形成有效市场，进而实现既“放得活”又“管得住”的经济秩序的必要制度基础，其核心在于构建高水平的市场竞争制度和市场经济基础制度。

Building a high-level market competition system focuses on the construction of market entity institutions and transaction institutions. First, the market entity institution, i.e., the enterprise system. The level of the market economy depends on the competitiveness of market entities. This requires accelerating the construction of a modern enterprise system, enabling enterprises to truly accept the hard constraints of market rules in the property rights system, and effectively form internal checks and balances of rights, responsibilities, and interests in the governance structure, along with a consciousness of fulfilling external social responsibilities. The key to building the market entity system at China's current stage is to adhere to and implement the "two unshakable" principles and cultivate more world-class enterprises. Second, the market transaction institution, i.e., the competitive order. In a narrow sense, competitive order refers to the price determination institution. Whether a market economy can effectively realize transactions hinges on whether transaction conditions can be smoothly reached. Price is the basic economic condition for realizing transactions. Whether competition is orderly depends on whether prices are truly determined by market supply and demand and whether they reflect the principle of equal exchange required for fair transactions. In a broad sense, transaction order refers to the institutional arrangements that affect the realization of transactions, including various anti-monopoly systems, anti-price distortion systems, and competition systems that restrict the free flow of production factors. The key to building market transaction institutions at China's current stage is to accelerate the construction of a unified national market, while simultaneously accelerating market-oriented allocation reforms of production factors and improving the price formation mechanism of production factors.

构建高水平的市场竞争制度，要点在于市场主体制度和交易制度的建设。一是市场主体制度，即企业制度。市场经济水平的高低取决于市场主体的竞争力，这就需要加快构建现代企业制度，使企业既能真正在产权制度上接受市场规则的硬约束，又切实在治理结构上形成内部的权责利有效制衡和履行外部社会责任的自觉。我国现阶段的市场主体制度建设，关键在于坚持和落实“两个毫不动摇”，培育更多世界一流企业。二是市场交易制度，即竞争秩序。狭义的竞争秩序是指价格决定制度，市场经济能否有效实现交易的关键，在于交易条件能否顺利达成。价格是实现交易的基本经济条件，竞争是否有序，关键看价格是否真正由市场供求关系决定，是否体现公平交易所要求的等价交换原则。广义的交易秩序是指影响交易实现的制度安排，包括各种反垄断制度、反价格扭曲制度、反限制要素自由流动的竞争制度等。我国现阶段市场交易制度建设的关键是加快构建全国统一大市场，同时加快推进要素市场化配置改革并完善要素价格形成机制。

Building high-level basic market economy institutions focuses on the construction of legal institutions and credit institutions. First, the legal institution. The market economy is a rule-of-law economy; market entities must abide by contracts, which requires a transcendent force—the protection of the state's superstructure. Only by improving and perfecting the rule of law can the market competition system be effectively safeguarded, including the protection of enterprise property rights institutions and market transaction institutions. Second, the credit institution. In terms of the institutional tools it employs, the market economy manifests credit relations; in terms of the moral foundation it relies on, it demands adherence to integrity. This requires improving and perfecting the credit system and regulatory institutions at the foundational institutional level, institutionalizing the moral order of "integrity."

构建高水平的市场经济基础制度，要点在于法治制度和信用制度建设。一是法治制度。市场经济是法治经济，市场主体必须恪守契约，这需要有超越市场的力量，即以国家上层建筑的力量加以保护。只有健全和完善法治建设，才能给予市场竞争制度有力的维护，包括对企业产权制度和市场交易制度的维护。二是信用制度。市场经济就其所运用的制度工具而言，体现信用关系，就其赖以支撑的道德基础而言，要求恪守诚信。这就需要在基础制度层面健全和完善信用体系和监管制度，将“诚信”的道德秩序制度化。

The institutional conditions for a capable government lie in improving the macroeconomic governance system.

有为政府的制度条件在于健全宏观经济治理体系

In a modern market economy, macroeconomic governance is indispensable. This indispensability is reflected in two aspects: First, the market mechanism allocates resources mainly at the micro level; for resource allocation at the macro level, the market mechanism itself cannot directly produce effects. This requires macroeconomic regulation and governance. The subject of macroeconomic regulation and governance can only be the government, primarily the central government, and its means of realization are mainly macroeconomic policies. Therefore, in resource allocation, a "capable government" mainly refers to the government's ability to play an active and systematic role in macroeconomic regulation and governance, achieving effective governance through scientific macroeconomic regulation. Second, the market mechanism requires a series of conditions to achieve efficient resource allocation. In reality, these conditions are often not fully satisfied, so the market mechanism always has certain limitations. This requires the government to take action, using a "capable government" to compensate for market failures and thereby improve resource allocation efficiency. For this reason, in a market economy, the relationship between government and market becomes a core issue in resource allocation.

在现代市场经济中，宏观经济治理是不可或缺的。这种不可或缺性体现在两个方面：第一，市场机制配置资源，主要是微观层面的活动，对于宏观层面的资源配置，市场机制本身难以直接产生作用，这就需要宏观调控和治理。宏观调控和治理的主体只能是政府，主要是中央政府，其实现手段主要是宏观经济政策。因此，在资源配置方面，“有为政府”主要是指政府在宏观经济调控和治理上能动而系统地发挥作用，以科学的宏观调控实现政府的有效治理。第二，市场机制实现资源有效配置需要一系列条件，在现实中，这些条件往往难以充分满足，因而市场机制总是存在一定的局限性，这就需要政府有所作为，以“有为政府”弥补市场失灵，进而提高资源配置效率。正因如此，在市场经济中，政府和市场关系成为资源配置中的核心问题。

The Third Plenary Session of the 20th Central Committee pointed out, "Scientific macroeconomic regulation and effective government governance are internal requirements for leveraging the advantages of the socialist market economy system." To achieve a "capable government," it is necessary to improve the macroeconomic governance system. Different macroeconomic governance systems are built on different basic institutions and thus have different characteristics. China's macroeconomic governance system is built on the foundation of the socialist system and has its own particularities and advantages, mainly manifested as: First, the connotation of the governance system includes both macroeconomic policies and macroeconomic governance institutions. In particular, China is in the process of further comprehensively deepening reform; reform measures themselves become important constituent factors of the macro governance system, and reform itself is an important way to improve the effectiveness of macroeconomic governance. This is an important characteristic that distinguishes China's macroeconomic governance system from other market economies. Second, the macroeconomic policy system includes not only aggregate policies in the general sense, namely monetary policy and fiscal policy, but also structural policies and development policies. Macroeconomic regulation not only has significant aggregate effects but also profound structural effects. Third, the adjustment of macroeconomic governance policy direction emphasizes both counter-cyclical regulation and cross-cyclical control. Fourth, in terms of the relationship between macro regulation and micro operations, there is not only the government's macro governance of market competition behavior but also the support of micro enterprise institutions for macro regulation. In particular, state-owned enterprises create important micro conditions for macroeconomic governance. Fifth, in terms of the mode of macroeconomic regulation, generally speaking, macro regulation can be undertaken either from the aggregate demand side or from the supply side. The key lies in making adjustments based on changes in the principal contradiction and the main aspect of the principal contradiction in macroeconomic imbalances at different periods of the economy, thereby effectively improving the level of macro regulation. The socialist system with Chinese characteristics provides a solid institutional foundation for achieving this transformation of regulatory modes.

党的二十届三中全会指出，“科学的宏观调控、有效的政府治理是发挥社会主义市场经济体制优势的内在要求”。实现“有为政府”，在体制上需要健全宏观经济治理体系。不同的宏观经济治理体系建立在不同的基本制度之上，因而具有不同的特点。我国的宏观经济治理体系建立在社会主义制度基础之上，具有自身的特殊性和优势，主要表现为：一是治理体系的内涵既包括宏观经济政策，也包括宏观经济治理制度。特别是我国正处于进一步全面深化改革进程中，改革举措本身成为宏观治理体系的重要构成因素，改革本身是提高宏观经济治理效能的重要途径，这是我国宏观经济治理体系不同于其他市场经济体的重要特点。二是宏观经济政策体系不仅包括一般意义上的总量政策，即货币政策和财政政策，而且包括结构政策和发展政策。宏观调控不仅具有显著的总量效应，而且具有深刻的结构效应。三是宏观经济治理政策方向的调整，既强调逆周期调节，也关注跨周期调控。四是宏观调控与微观运行的关系方面，不仅有政府宏观上对市场竞争行为的治理，而且有微观上企业制度对宏观调控的支持，特别是国有企业为宏观经济治理创造了重要微观条件。五是宏观调控方式上，一般而言，宏观调控既可从总需求端入手展开，也可以从供给侧入手实施，关键在于根据经济体不同时期宏观经济失衡的主要矛盾及矛盾主要方面的变化进行调整，从而有效提高宏观调控水平。中国特色社会主义制度为实现这种调控方式的转换提供了坚实制度基础。

Promote the better integration of an effective market and a capable government.

推动有效市场和有为政府更好结合

To promote the continued stable, healthy, and sustainable development of China's economy, it is necessary to coordinate the relationship between an effective market and a capable government, forming an economic order that is both "able to loosen" and "able to control," i.e., micro entities are vibrant, market mechanisms are effective, macro regulation is scientific and moderate, and governance effectiveness and levels are continuously improving, thereby achieving coordination between micro and macro, short-term and long-term, aggregate and structure, supply and demand, etc. In coordinating an effective market and a capable government, we must respect objective economic laws and grasp the following.

推动中国经济继续平稳健康可持续发展，必须统筹好有效市场和有为政府的关系，形成既“放得活”又“管得住”的经济秩序，即微观主体有活力，市场机制有效，宏观调控科学有度，治理效能和水平不断提升，从而使得微观与宏观、短期与长期、总量与结构、供给与需求等方面实现协调。在统筹有效市场和有为政府过程中，必须尊重客观经济规律，把握好以下内容。

First, grasp the internal connection between the sufficiency and effectiveness of market competition and the necessity and standardization of government macroeconomic governance. In resource allocation, government and market are not opposed but are mutually complementary and reinforcing relationships, both aiming to improve resource allocation efficiency. The more effective the market mechanism, the more able enterprises are to accept the hard constraints of market rules, the fuller the competition, the more solid the micro foundation of effective macro governance, the higher the level of macro governance is likely to be, and the more effectively market failures can be compensated.

一是把握市场竞争充分性、有效性与政府宏观经济治理必要性、规范性的内在联系。在资源配置上，政府与市场不是对立的，而是相辅相成、相互促进的关系，目标都是提高资源配置效率。市场机制越有效，企业越能接受市场规则硬约束，竞争越充分，有效宏观治理的微观基础就越牢固，宏观治理水平越可能高，市场失灵越可能被有效弥补。

Second, scientifically define the functions of market and government. The functions of market and government in resource allocation are complementary, but defining the roles of government and market in resource allocation is not about mechanically dividing different areas and scopes; both cover the entire process of resource allocation activities, but the problems they address and their modes of action differ. The market is more effective in dealing with resource allocation problems under conditions of clear property rights and fair competition rules; the government deals with resource allocation problems where the market cannot effectively function. The market mechanism directly achieves resource allocation goals through the competition of micro entities; the government more often uses indirect means, guiding the activities of market entities from the macro level, achieving policy effects, and thereby reaching regulatory goals.

二是科学界定市场与政府的功能。市场与政府在资源配置上的功能是互补的，但界定政府和市场在资源配置中的作用并不是要机械地划分出不同领域和范围，二者都覆盖资源配置活动全过程，但针对的问题和作用方式有所不同。市场在处理产权清晰、竞争规则公平条件下的资源配置问题更为有效，政府则是处理市场难以有效发挥作用的资源配置问题；市场机制直接通过微观主体的竞争达成资源配置目标，政府更多是以间接手段，从宏观上引导市场主体的活动，实现政策效应，进而达成调控目标。

(Author: Liu Wei, former President of Renmin University of China)

（作者：刘伟，系中国人民大学原校长）

Online editor: Huihui

网络编辑：慧慧