In the new era, promoting a better combination of an effective market and a responsive government is a fundamental requirement for building a high-level socialist market economy system and endorsing high-quality development.
Theoretical Logic -
Due to various historical contexts, creation methods, institutional requirements and development stages, the relationship between government and market exhibits different combination patterns.
Under socialist market economy system with Chinese characteristics, we not only totally confirm the role of the market, actively using the market mechanism to promote the optimal allocation of resources, but also fully understand the market failure, with government playing a better role in balancing, coordinating and guiding in order to overcome dual disadvantages of logic of capital and market failure.
Historical logic
Looking back at the historical and logical evolution of the relationship between the government and the market since the reform and opening up, three periods could be roughly categorized: exploration and transition, establishment and development and deepening and improvement. The overall process has been following the main thread of effective market and active government.
The adjustment of the relationship between government and the market is not a simple substitution of one for the other, but a spiral growth exploring of the essence and laws with socialist development as the core theme. The process has undergone a transformation from perceptual understanding to rational understanding, and then from rational understanding to gradual deepening in practice.
In the new development era, the relationship between the government and the market mainly revolves at a higher level around building a high-level socialist market economy system and enhancing high-quality development in order to obtain an optimal combination of the role of the market and government, the advantages of the market economy and the superiority of the socialist system.
Practical logic -
Only from the perspective of the problem, to promote a better combination of effective market and government, we still face the problems of an incomplete market system, insufficient market development and inadequate market incentives, unsmooth factors flow, inefficient resource allocation and weak microeconomic vitality.
Entering a new stage of development, we should proceed to build a high-standard market system, continuously stimulate the vitality of various market players, and gradually improve the economic governance capacity of the government.
For example, to enhance the ability for competition, innovation, control, influence and risk resistance of the state-owned economy, strengthening and expanding state-owned capital; to create a market environment in which players of all types have equal access to resource elements, open, fair and just competition, and equal legal protection in accordance with the law.
Another example is to coordinate the clearance of the accumulated stock and examination of the incremental stock, gradually abolish the policies that hinder the national unified market and fair competition; strengthen and improve anti-monopoly and anti-unfair competition enforcement, and cultivate and promote a culture of fair competition.
This article was published on August 30, 2022 in Jiefang Daily, page 11: Thought Weekly/New Theory
Link to original article: https://www.jfdaily.com/staticsg/res/html/journal/detail.html?date=2022-08-30&id=338842&page=11
(Yan Juan, Business School, University of Shanghai for Science and Technology; this article is also a staged result of Research on the correct understanding and handling of the relationship between government and market in the new era (20JD710034), a special task project for humanities and social sciences research of the Ministry of Education in 2020, which was led by Yan Juan.)
Translator: QIAN Ying
Reviewer: XU Jiawen
