Building a High-Level Socialist Market Economy System That Is “Able to Let Go and Able to Keep Control”

The Third Plenary Session of the 20th Central Committee of the CPC set the task of building a high-level socialist market economy system, stressing that “we must better leverage the role of market mechanisms, create a fairer and more dynamic market environment, optimize resource allocation efficiency and maximize benefits, achieving both the ability to let go and the ability to keep control.” [n1] “Able to let go and able to keep control” is an inherent requirement of a high-level socialist market economy system. On the new journey, realizing “able to let go and able to keep control” requires further reform and improvement of relevant institutions.

党的二十届三中全会提出构建高水平社会主义市场经济体制的任务，强调“必须更好发挥市场机制作用，创造更加公平、更有活力的市场环境，实现资源配置效率最优化和效益最大化，既‘放得活’又‘管得住’”。“放得活、管得住”是高水平社会主义市场经济体制的内在要求，新征程上，实现“放得活、管得住”，需要进一步改革和完善相关制度。

1. “Able to let go and able to keep control” is the internal logic of establishing and perfecting the socialist market economy system

1.“放得活、管得住”是建立和完善社会主义市场经济体制的内在逻辑

On the question of whether socialism should adopt a market economy, and what kind of market economy to adopt, Comrade Deng Xiaoping as early as 1979 clearly stated: “To say that a market economy exists only under capitalism, and that there is only a capitalist market economy, is certainly incorrect. Why can’t socialism also adopt a market economy? This cannot be called capitalism. We take the planned economy as the mainstay, while also integrating the market economy, but this is a socialist market economy.” [n2] Comrade Chen Yun used the relationship between a “cage” and a “bird” to describe the relationship between planning and the market at that time: “You cannot hold a bird in your hand; held in the hand it will die. You must let it fly, but only let it fly within the cage. Without a cage, it will fly away. If the bird represents invigorating the economy, then the cage represents the state plan.” [n3] “Only by doing a good job of macro-control can we invigorate the micro-economy, achieving vitality without chaos.” Comrade Deng Xiaoping further pointed out: “Combining the planned economy with the market economy can further liberate productive forces and accelerate economic development.” [n4] The Third Plenary Session of the 12th Central Committee of the CPC clearly stated that China’s socialist economy is a “planned commodity economy on the basis of public ownership.” [n5] The 13th National Congress of the CPC further proposed that “the system of a socialist planned commodity economy should be a system with an inherent unity of planning and the market,” and that “the new economic operation mechanism should, on the whole, be a mechanism of ‘the state regulating the market, and the market guiding enterprises.’ The state uses economic means, legal means, and necessary administrative means to regulate market supply and demand, creating a suitable economic and social environment, thereby guiding enterprises to make correct operational decisions.” [n6] The 14th National Congress of the CPC gained a newer understanding of the relationship between planning and the market, and what kind of market economy to establish, proposing: “The socialist market economy system we aim to establish is one that enables the market to play a fundamental role in resource allocation under the macro-control of the socialist state, allowing economic activities to follow the requirements of the law of value and adapt to changes in supply and demand,” while also noting that “the market has its own weaknesses and negative aspects, so the state’s macro-economic regulation must be strengthened and improved.” [n7]

关于社会主义搞不搞市场经济？搞一个什么样的市场经济？邓小平同志早在1979年就明确指出，“说市场经济只存在于资本主义社会，只有资本主义的市场经济，这肯定是不正确的。社会主义为什么不可以搞市场经济，这个不能说是资本主义。我们是计划经济为主，也结合市场经济，但这是社会主义的市场经济”。陈云同志用“笼”和“鸟”的关系来形容当时的计划和市场的关系，“鸟不能捏在手里，捏在手里会死，要让它飞，但只能让它在笼子里飞。没有笼子，它就飞跑了。如果说鸟是搞活经济的话，那么，笼子就是国家计划”，“搞好宏观控制，才有利于搞活微观，做到活而不乱”。邓小平同志又进一步指出，“把计划经济和市场经济结合起来，就更能解放生产力，加速经济发展”。党的十二届三中全会明确提出我国社会主义经济是“在公有制基础上的有计划的商品经济”。党的十三大进一步提出，“社会主义有计划商品经济的体制，应该是计划与市场内在统一的体制”，“新的经济运行机制，总体上来说应当是‘国家调节市场，市场引导企业’的机制。国家运用经济手段、法律手段和必要的行政手段，调节市场供求关系，创造适宜的经济和社会环境，以此引导企业正确地进行经营决策”。党的十四大对计划与市场的关系，以及搞一个什么样的市场经济有了更新的认识，提出“我们要建立的社会主义市场经济体制，就是要使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，使经济活动遵循价值规律的要求，适应供求关系的变化”，“同时也要看到市场有其自身的弱点和消极方面，必须加强和改善国家对经济的宏观调控”。

The Third Plenary Session of the 18th Central Committee of the CPC provided a more precise positioning of the relationship between the government and the market, changing the market’s role in resource allocation from a “fundamental role” to a “decisive role,” placing greater emphasis on the importance of the market. [n8] General Secretary Xi Jinping pointed out that emphasizing the market’s decisive role in resource allocation is because “the market deciding resource allocation is a general law of the market economy; a market economy is essentially an economy where the market decides resource allocation.” “To better play the role of the government does not mean to expand the government’s role, but to ensure that, under the premise of the market playing a decisive role, the government manages those things that the market cannot manage or cannot manage well.” He stressed: “We are developing a market economy under the great premise of the leadership of the Communist Party of China and the socialist system. At no time should we forget the attribute ‘socialist.’ The reason it is called a socialist market economy is precisely to uphold our institutional superiority and effectively prevent the drawbacks of a capitalist market economy. We must adhere to dialectics and the ‘two-point theory,’ continue to work hard on the integration of the basic socialist system with the market economy, give full play to the advantages of both sides, and strive for both an ‘effective market’ and a ‘competent government,’ working hard in practice to solve this world-class economic problem.” [n9]

党的十八届三中全会对政府与市场关系进行了更为准确的定位，把市场在资源配置中起“基础性作用”改为“决定性作用”，更加强调市场的重要性。习近平总书记指出，强调使市场在资源配置中起决定性作用，是因为“市场决定资源配置是市场经济的一般规律，市场经济本质上就是市场决定资源配置的经济”，“更好发挥政府作用，不是要更多发挥政府作用，而是要在保证市场发挥决定性作用的前提下，管好那些市场管不了或管不好的事情”，并强调“我们是在中国共产党领导和社会主义制度的大前提下发展市场经济，什么时候都不能忘了‘社会主义’这个定语。之所以说是社会主义市场经济，就是要坚持我们的制度优越性，有效防范资本主义市场经济的弊端。我们要坚持辩证法、两点论，继续在社会主义基本制度与市场经济的结合上下功夫，把两方面优势都发挥好，既要‘有效的市场’，也要‘有为的政府’，努力在实践中破解这道经济学上的世界性难题”。

2. “Able to let go and able to keep control” is the essential requirement of a high-level socialist market economy system

2.“放得活、管得住”是高水平社会主义市场经济体制的本质要求

Whether a socialist market economy system is high-level must be judged, both theoretically and practically, by whether it is conducive to liberating and developing social productive forces, whether it is conducive to stimulating and enhancing social vitality, whether it is conducive to improving total factor productivity, and whether it is conducive to promoting high-quality development. The core issue in building such a market economy system is properly handling the relationship between the government and the market, allowing each to leverage its strengths and complement the other’s advantages, achieving both the ability to let go and the ability to keep control. General Secretary Xi Jinping pointed out: “Through deepening reform, we must allow the vitality of all factors such as labor, knowledge, technology, management, and capital to burst forth, and allow all sources of social wealth to flow fully. At the same time, we must handle the relationship between vitality and order. Social development needs vitality, but this vitality must be orderly activity. Stagnant water is not acceptable, nor is hidden turbulence.” [n10]

社会主义市场经济体制是否高水平，从理论和实践上都要看其是否有利于解放和发展社会生产力，是否有利于激发和增强社会活力，是否有利于提高全要素生产率，是否有利于推动高质量发展。构建这样的市场经济体制，核心问题是处理好政府和市场的关系，各扬其长、优势互补，既“放得活”，又“管得住”。习近平总书记指出：“我们要通过深化改革，让一切劳动、知识、技术、管理、资本等要素的活力竞相迸发，让一切创造社会财富的源泉充分涌流。同时，要处理好活力和有序的关系，社会发展需要活力，但这种活力又必须是有序活动的。死水一潭不行，暗流涌动也不行。”

“Able to let go” essentially means “letting the market play a decisive role in resource allocation,” allowing mechanisms such as supply and demand, prices, and competition to regulate interest relations and market behavior, stimulating the initiative and creativity of market entities, and maximizing the benefits of resource allocation. To build a high-level socialist market economy system that is “able to let go,” it is necessary to further deepen the construction of institutions in the following areas:

“放得活”，本质是“使市场在资源配置中起决定性作用”，让供求、价格、竞争等机制调节利益关系和市场行为，激发市场主体积极性和创造性，实现资源配置效益最大化。构建“放得活”的高水平社会主义市场经济体制，必须进一步深化以下方面制度建设：

First, respect and adhere to the principle of material interests. Material interests are the driving force behind economic development and the guide for resource allocation; they are also the fulcrum for the market to optimize resource allocation. Marx pointed out: “Everything people strive for is related to their interests.” [n11] Comrade Deng Xiaoping emphasized: “To talk about more pay for more work without emphasizing material interests may work for a minority of advanced elements, but not for the masses; it may work for a short time, but not for the long term. The revolutionary spirit is very precious; without the revolutionary spirit, there would be no revolutionary action. However, revolution arises on the basis of material interests. If we only talk about the spirit of sacrifice without mentioning material interests, that is idealism.” [n12] General Secretary Xi Jinping proposed: “High-quality development should achieve investment with returns, enterprises with profits, employees with income, and the government with tax revenue, fully reflecting each party’s contribution as evaluated by the market.” [n13]

一是尊重并坚持物质利益原则。物质利益是驱动经济发展，引领资源配置的原动力，更是市场优化配置资源的支撑点。马克思指出：“人们奋斗所争取的一切，都同他们的利益有关。”邓小平同志强调：“不讲多劳多得，不重视物质利益，对少数先进分子可以，对广大群众不行，一段时间可以，长期不行。革命精神是非常宝贵的，没有革命精神就没有革命行动。但是，革命是在物质利益基础上产生的，如果只讲牺牲精神，不讲物质利益，那就是唯心论。”习近平总书记提出：“高质量发展应该实现投资有回报、企业有利润、员工有收入、政府有税收，并且充分反映各自按市场评价的贡献。”

Second, continuously improve the basic institutions of the market economy. Improve the property rights system, improve the market information disclosure system, implement equal accountability, equal charges, and equal penalties for acts infringing upon the property rights and legitimate interests of all forms of ownership, and improve the punitive damages system. Strengthen the judicial protection of property rights enforcement, and prevent and correct the use of administrative and criminal means to interfere in economic disputes. Improve the market access system, and optimize the market access environment for new business forms and new fields. Improve the fair competition system, strengthen the rigid constraints of fair competition review, strengthen anti-monopoly and anti-unfair competition, and clean up and abolish various regulations and practices that hinder a unified national market and fair competition. It is necessary to establish and improve a unified, standardized, and information-sharing public resource trading platform system for bidding, government procurement, and procurement by institutions and state-owned enterprises, achieving open management of the entire project process. At the same time, improve the enterprise bankruptcy mechanism, explore the establishment of a personal bankruptcy system, and improve the enterprise exit system. Improve the social credit system and regulatory system, and create a social environment of honesty and trustworthiness.

二是不断完善市场经济基础制度。完善产权制度，完善市场信息披露制度，对侵犯各种所有制经济产权和合法利益的行为实行同责同罪同罚，完善惩罚性赔偿制度。加强产权执法司法保护，防止和纠正利用行政、刑事手段干预经济纠纷。完善市场准入制度，优化新业态新领域市场准入环境。健全公平竞争制度，加强公平竞争审查刚性约束，强化反垄断和反不正当竞争，清理和废除妨碍全国统一市场和公平竞争的各种规定和做法，既要建立健全统一规范、信息共享的招标投标和政府、事业单位、国有企业采购等公共资源交易平台体系，实现项目全流程公开管理，又要健全企业破产机制，探索建立个人破产制度，完善企业退出制度。健全社会信用体系和监管制度，营造诚实守信社会环境。

Third, improve the factor market system. Improve the systems and rules for factor markets, build a unified urban-rural construction land market, cultivate a national integrated technology and data market, and promote the smooth flow of production factors, efficient allocation of various resources, and full release of market potential. Improve the mechanism for determining factor prices mainly by market supply and demand, and prevent improper government intervention in price formation. Improve the mechanism whereby production factors such as labor, capital, land, knowledge, technology, management, and data are evaluated by the market for their contribution and remunerated according to that contribution.

三是健全要素市场体系。完善要素市场制度和规则，构建城乡统一的建设用地市场，培育全国一体化技术和数据市场，推动生产要素畅通流动、各类资源高效配置、市场潜力充分释放。完善主要由市场供求关系决定要素价格机制，防止政府对价格形成的不当干预。健全劳动、资本、土地、知识、技术、管理、数据等生产要素由市场评价贡献、按贡献决定报酬的机制。

“Keeping things under control” essentially means “giving better play to the role of the government” by improving the macroeconomic governance system. General Secretary Xi Jinping has pointed out that “giving play to the role of the government does not mean simply issuing administrative orders; on the basis of respecting the laws of the market, we must use reform to stimulate market vitality, use policies to guide market expectations, use planning to clarify investment directions, and use the rule of law to regulate market behavior.” “The government’s duties and role are mainly to maintain macroeconomic stability, strengthen and optimize public services, ensure fair competition, strengthen market supervision, maintain market order, promote sustainable development, promote common prosperity, and remedy market failures.” To build a high-level socialist market economy system that “keeps things under control,” it is necessary to further deepen institutional construction in the following areas:

“管得住”，本质是通过健全宏观经济治理体系，“更好发挥政府作用”。习近平总书记指出，“发挥政府作用，不是简单下达行政命令，要在尊重市场规律的基础上，用改革激发市场活力，用政策引导市场预期，用规划明确投资方向，用法治规范市场行为”，“政府的职责和作用主要是保持宏观经济稳定，加强和优化公共服务，保障公平竞争，加强市场监督，维护市场秩序，推动可持续发展，促进共同富裕，弥补市场失灵”。构建“管得住”的高水平社会主义市场经济体制，必须进一步深化以下方面制度建设：

First, improve the national strategic planning system and the mechanism for policy coordination. Establish a mechanism for formulating and implementing national strategies, strengthen the deep integration of major national strategies, and enhance the functions of national strategies in macro-guidance, overall planning, and coordination. Improve the institutional system for national economic and social development planning, strengthen the mechanism for linking and implementing plans, give play to the strategic guiding role of national development plans, strengthen the foundational role of territorial space planning, and enhance the supporting role of special plans and regional plans in implementation. Promote the coordinated发力 of fiscal, monetary, industrial, price, and employment policies around the implementation of national development plans and major strategies, and optimize the allocation of incremental resources and the adjustment of existing structures. Explore the implementation of national macro balance sheet management. Incorporate both economic and non-economic policies into the consistency assessment of macro-policy orientation. Improve the expectation management mechanism and improve the international macro-policy coordination mechanism.

一是完善国家战略规划体系和政策统筹协调机制。构建国家战略制定和实施机制，加强国家重大战略深度融合，增强国家战略宏观引导、统筹协调功能。健全国家经济社会发展规划制度体系，强化规划衔接落实机制，发挥国家发展规划战略导向作用，强化国土空间规划基础作用，增强专项规划和区域规划实施支撑作用。围绕实施国家发展规划、重大战略促进财政、货币、产业、价格、就业等政策协同发力，优化各类增量资源配置和存量结构调整。探索实行国家宏观资产负债表管理。把经济政策和非经济性政策都纳入宏观政策取向一致性评估。健全预期管理机制，健全国际宏观政策协调机制。

Second, deepen the reform of the fiscal and tax systems. Improve the budget system, and strengthen the coordination of fiscal resources and budgets. Unify budget allocation authority, enhance the uniformity and standardization of budget management, and improve the budget disclosure and supervision system. Improve the tax system that is conducive to high-quality development, social fairness, and market unity, optimize the tax structure, standardize tax policies, and deepen the reform of tax collection and administration. Establish a central-local fiscal relationship with clear powers and responsibilities, coordinated financial resources, and regional balance. Improve the government debt management system. Standardize the management of non-tax revenue. Appropriately strengthen central government authority and increase the proportion of central fiscal expenditure.

二是深化财税体制改革。健全预算制度，加强财政资源和预算统筹。统一预算分配权，提高预算管理统一性、规范性，完善预算公开和监督制度。健全有利于高质量发展、社会公平、市场统一的税收制度，优化税制结构，规范税收政策，深化税收征管改革。建立权责清晰、财力协调、区域均衡的中央和地方财政关系。完善政府债务管理制度。规范非税收入管理。适当加强中央事权、提高中央财政支出比例。

Third, deepen the reform of the financial system. Accelerate the improvement of the central bank system and smooth the transmission mechanism of monetary policy. Actively develop technology finance, green finance, inclusive finance, pension finance, and digital finance, and strengthen high-quality financial services for major strategies, key areas, and weak links. Improve the positioning and governance of financial institutions, and improve the incentive and constraint mechanisms for serving the real economy. Accelerate the development of a multi-tiered bond market and increase the proportion of direct financing. Improve the functions of the capital market that coordinate investment and financing, and promote the healthy and stable development of the capital market. Support long-term funds entering the market. Improve the financial regulatory system, bring all financial activities under supervision according to law, strengthen regulatory responsibilities and accountability systems, and strengthen coordination between central and local supervision. Promote high-level opening up of the financial sector, and steadily and prudently advance the internationalization of the renminbi.

三是深化金融体制改革。加快完善中央银行制度，畅通货币政策传导机制。积极发展科技金融、绿色金融、普惠金融、养老金融、数字金融，加强对重大战略、重点领域、薄弱环节的优质金融服务。完善金融机构定位和治理，健全服务实体经济的激励约束机制。加快多层次债券市场发展，提高直接融资比重。健全投资和融资相协调的资本市场功能，促进资本市场健康稳定发展。支持长期资金入市。完善金融监管体系，依法将所有金融活动纳入监管，强化监管责任和问责制度，加强中央和地方监管协同。推动金融高水平开放，稳慎扎实推进人民币国际化。

3. Consolidate the microeconomic foundation for “keeping things vibrant while keeping things under control”

3.筑牢“放得活、管得住”的微观经济基础

Unswervingly consolidating and developing the public sector of the economy, unswervingly encouraging, supporting, and guiding the development of the non-public sector of the economy, ensuring that all forms of ownership use factors of production equally according to law, participate in market competition fairly, and receive equal legal protection, and promoting complementary advantages and common development of all forms of ownership, are not only inherent requirements of a high-level socialist market economy system but also the economic foundation supporting “keeping things vibrant while keeping things under control.”

毫不动摇巩固和发展公有制经济，毫不动摇鼓励、支持、引导非公有制经济发展，保证各种所有制经济依法平等使用生产要素、公平参与市场竞争、同等受到法律保护，促进各种所有制经济优势互补、共同发展，既是高水平社会主义市场经济体制的应有之义，又是支撑“放得活、管得住”的经济基础。

To “keep things under control,” it is necessary to unswervingly consolidate and develop the public sector of the economy. Deepen the reform of state-owned assets and state-owned enterprises, improve the management and supervision system and mechanism, enhance strategic coordination among relevant management departments, promote the optimization of the layout and structural adjustment of the state-owned economy, make state-owned capital and state-owned enterprises stronger, better, and larger, enhance core functions, and improve core competitiveness. Further clarify the functional positioning of different types of state-owned enterprises, improve the management of main responsibilities and core businesses, and clarify the key investment areas and directions for state-owned capital. Deepen the reform of state-owned capital investment and operation companies, improve the institutional arrangements for state-owned enterprises to promote original innovation, and establish an evaluation system for state-owned enterprises to fulfill their strategic missions. Accelerate the independent operation of natural monopoly segments and the market-oriented reform of competitive segments in industries such as energy, railways, telecommunications, water conservancy, and public utilities, and improve the regulatory system and mechanism.

要“管得住”，就必须毫不动摇巩固和发展公有制经济。深化国资国企改革，完善管理监督体制机制，增强各有关管理部门战略协同，推进国有经济布局优化和结构调整，推动国有资本和国有企业做强做优做大，增强核心功能，提升核心竞争力。进一步明晰不同类型国有企业功能定位，完善主责主业管理，明确国有资本重点投资领域和方向。深化国有资本投资、运营公司改革，健全国有企业推进原始创新制度安排，建立国有企业履行战略使命评价制度。加快推进能源、铁路、电信、水利、公用事业等行业自然垄断环节独立运营和竞争性环节市场化改革，健全监管体制机制。

To “keep things vibrant,” it is necessary to unswervingly encourage, support, and guide the development of the non-public sector of the economy. Formulate a law to promote the private economy, continuously break down market access barriers, promote the fair opening of competitive areas of infrastructure to business entities, and improve the long-term mechanism for private enterprises to participate in the construction of major national projects. Support capable private enterprises to take the lead in undertaking major national technological research tasks, and further open up major national research infrastructure to private enterprises. Improve the policy and system for supporting private enterprise financing, solve the problems of difficult and expensive financing, improve the long-term regulatory mechanism for fees charged to enterprises and the legal system for settling arrears owed to enterprises, and support and guide private enterprises to improve their governance structures and management systems. Adhere to the policy of creating a good environment and providing more opportunities for the development of the non-public sector of the economy, and encourage private enterprises to build world-class enterprises.

要“放得活”，就必须毫不动摇鼓励、支持、引导非公有制经济发展。制定民营经济促进法，持续破除市场准入壁垒，推进基础设施竞争性领域向经营主体公平开放，完善民营企业参与国家重大项目建设长效机制。支持有能力的民营企业牵头承担国家重大技术攻关任务，向民营企业进一步开放国家重大科研基础设施。完善民营企业融资支持政策制度，破解融资难、融资贵问题，健全涉企收费长效监管和拖欠企业账款清偿法律法规体系，支持引导民营企业完善治理结构和管理制度。坚持致力于为非公有制经济发展营造良好环境和提供更多机会的方针政策，鼓励民营企业打造世界一流企业。

To “keep things vibrant while keeping things under control,” efforts should be made to achieve mutual complementarity and mutual reinforcement between the public and non-public sectors of the economy. General Secretary Xi Jinping has pointed out: “Our emphasis on consolidating and developing the public sector well is not opposed to encouraging, supporting, and guiding the development of the non-public sector; rather, they are organically unified. The public sector and the non-public sector should complement and reinforce each other, not exclude or offset each other.” While encouraging the public and non-public sectors of the economy to fully play their respective functions and roles, we should continue to support non-public enterprises in participating in the reform of state-owned enterprises, vigorously develop mixed-ownership economies with cross-shareholding and mutual integration of state-owned capital, collective capital, and non-public capital, and better enhance the vitality and dynamism of all types of enterprises.

要“放得活、管得住”，应努力实现公有制经济和非公有制经济相辅相成、相得益彰。习近平总书记指出：“我们强调把公有制经济巩固好、发展好，同鼓励、支持、引导非公有制经济发展不是对立的，而是有机统一的。公有制经济、非公有制经济应该相辅相成、相得益彰，而不是相互排斥、相互抵消。”在鼓励公有制经济和非公有制经济充分发挥好自己的功能和作用的同时，应继续支持非公有制企业参与国有企业改革，大力发展国有资本、集体资本、非公有资本等交叉持股、相互融合的混合所有制经济，更好地增强各类企业的生机和活力。

Online editor: Paul

网络编辑：保罗