Socialist market economy vital for modernization

China has been deepening economic reform and taking measures to improve the socialist market economic system since the Third Plenary Session of the 18th Central Committee of the Communist Party of China in 2013.

Since the launch of reform and opening-up, China's productive forces, production relations, and economic base and superstructure have undergone profound changes. More important, the principal contradiction has changed from the "ever-growing material and cultural needs of the people versus backward social production" to that "between unbalanced and inadequate development and the people's ever-growing needs for a better life".

This is therefore the right time to expedite the process of Chinese modernization and intensify efforts to realize the great rejuvenation of the Chinese nation, while deepening reform and promoting a new round of technological revolution and industrial transformation.

China has been meeting the basic needs of over 1.4 billion people, ensuring they lead decent lives, and has succeeded in building a moderately prosperous society in all respects. But the needs of the people to lead a better life have increased with the passage of time. They seek not only more material and cultural goods and services, but also rule of law, fairness and justice, and better security and healthier environment.

At the same time, China's overall productive forces have significantly improved, with the country leading the world in many areas of production and research. Yet the "unbalanced and inadequate development" remains the main constraining factor in meeting the people's increasing needs for a better life. As such, China needs to deepen reform and adopt a new development policy to address the principal contradictions and promote Chinese modernization.

In fact, the 2023 Central Economic Work Conference stressed that Chinese modernization must be implemented as the foremost policy, with the Party leadership deepening economic reform and taking steps to establish a high-level socialist market economy.

As a matter of fact, since the Third Plenary Session of the 11th CPC Central Committee in 1978, the Party has been pursuing economic development as its central task, and implementing economic reform as its main measure to implement all-round reform.

The socialist market economy is a key driving force for high-quality development and Chinese modernization. It provides an institutional guarantee for Chinese modernization, which seeks high-quality development, common prosperity and harmony between material and spiritual civilization while shunning polarization and capital-centered development, which characterize Western-style modernization.

To address the drawbacks of Western-style modernization and promote Chinese modernization, the country needs to adhere to socialist market economy, which combines the socialist and market economic systems, in order to give full play to the socialist system and utilize the resource allocation mechanism of the market economic system.

To realize Chinese modernization, the country has to establish a high-level socialist market economy and take advantage of socialist means of production. And to promote high-quality development, the country needs to establish a high-level socialist market economy and ensure economic development serves people's needs.

The establishment of a high-level socialist market economy can improve labor productivity and expand total social output, laying the foundation for realizing common prosperity. Also, income disparities can be narrowed through reasonable primary distribution, redistribution and tertiary distribution in a high-level socialist market economy.

More important, new quality productive forces require the reform of the existing economic system and adjustment of production relations. So China should adopt a problem-solving approach and attach greater importance to solving problems that concern people most.

Accordingly, the government should further develop the public sector and encourage, support and guide the development of the non-public sector, while removing barriers hindering the development of new quality productive forces and taking measures to augment people's incomes, improve governance and boost social development.

The author is a professor of economics at the Party School of the Communist Party of China Central Committee. The views don't necessarily represent those of China Daily.

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