A new historic starting point

Another necessary reform is adjusting the relationship between the government and market in order to release market vitality. Past experience shows that this relationship has a bearing on overall reform. If well handled, it will not only ensure healthy economic development, but also bring about social harmony and help eliminate corruption. Otherwise, a tense relationship will present many difficulties to economic restructuring, social transformation and the changing of government functions.

The prominent problem at present is the government's excessive administrative intervention in microeconomic activities. Therefore, a more rational relationship between the government and market is needed to allow the market to fulfill its basic role in allocating resources. A competitive market system offers the biggest reform dividends.

In this regard, we need to deepen price reform with the pricing of resources as the focus, promote financial reform with the marketization of interest rates and exchange rates as the focus, expand the space for social capital investment with promoting reform of monopoly industries as the focus, and adjust and optimize the allocation of State-owned capital with the focus on public welfare.

Whatever steps are taken to deepen economic, social, political, cultural and ecological reform, or to promote a new round of overall opening-up, there is an urgent need for legal and institutionalized guarantees and strengthening of the rule of law. Comprehensively deepening reform requires accelerating the construction of a law-based government and a fair and just society. Legislative guarantees for a modern market economy need to be established. A modern economy is market economy based on the rule of law. A market economy lacking the rule of law is not only unfair, it is also unsustainable.

Adapting to the changing situation and regulating the reform program through legislation will not only effectively guarantee market equity, it will also effectively prevent distortions of reform. A fair legal environment is an important guarantee for social stability and healthy development. Reform of the judicial system should be accelerated to increase judicial transparency, and ensure the independence of the courts and an impartial judiciary.

Meanwhile, the construction of a law-based government is a fundamental step toward good governance. The legislation concerning finance, taxation, government purchases and the allocation of public resources must be strengthened. Only with administration according to law will the government achieve the goal of building a law-based government by 2020.

Deepening comprehensive reform requires further opening-up. But prompting reforms with further opening-up will face more challenges. However, releasing the dividends of further reforms will benefit not only 1.3 billion Chinese people, but also regional economies that have close economic and trade ties with China. China's ongoing transformation and comprehensive opening-up will let the world share the "China dividend", especially regional economies.

The Chinese Dream is the realization of common prosperity for the 1.3 billion Chinese. Market-oriented reform over the past 35 years has successfully made China rank among middle-income countries, comprehensively deepening reform will enable the country to stride forward toward the rank of high-income countries.

The author is president of the China Institute for Reform and Development and the article is excerpts from his speech at the Eighth China-Singapore Forum on Oct 23, 2013.

(China Daily 11/13/2013 page8)