Confining the exercise of power to an institutional cage
All power in China comes from the people and should be exercised only for the benefit of the people. To confine the exercise of power to an institutional cage means strengthening supervision of the government’s work to prevent possible misuse of power by officials.
It entails establishing a mechanism to prevent and punish corruption. The mechanism should provide institutional firepower to fight corruption and promote integrity by addressing both the symptoms and root causes of corruption.
China has established an effective framework of accountability with institutional checks on corruption. It is designed to ensure that no official enjoys power above the law and that all officials exercise their power to serve the people, account to them and accept their oversight.
It takes a good blacksmith to make good steel
It is a popular Chinese adage which means that only by conducting yourself honorably can you expect others to do the same. In other words, a good example is the best precept. Xi Jinping quoted the proverb to explain the importance of Party building when he met the press at the 18th Communist Party of China (CPC) National Congress at the Great Hall of the People in 2012.
The newly elected general secretary of the CPC Central Committee stressed that as the ruling party, the CPC must take a principled and disciplined approach to Party building as this is the key to the advancement of socialism with Chinese characteristics. Only with a strong CPC can there be progress toward China’s goals, prosperity and stability, and happiness and peace for the people.
Top-level design
The Proposal on Developing the 12th Five-Year Plan (2011-15) for National Economic and Social Development, adopted by the 17th CPC Central Committee at its Fifth Plenary Session on October 18, 2010 introduced the idea of greater focus on designing at the top level and overall planning. The concept has subsequently been embedded in China’s reform program and featured in other official documents and meetings of the central leadership.
“Top-level design” represents a key element of China’s reform efforts. It means it is the central leadership that is responsible for devising a systematic overall plan for the nation’s reforms from a strategic perspective, with the aim of better allocating the resources required and ensuring efficient realization of goals.
Supply-side reform
The importance of “supply-side reform” was emphasized by Xi at the 11th meeting of the CPC Central Leading Group for Financial and Economic Affairs on November 10, 2015. Supply-side policies, which focus on supply and production, are often discussed in contrast to a demand-side approach. To improve supply-side performance is to encourage productivity and maintain a competitive edge, with greater innovation, decommissioning of obsolete manufacturing, less overcapacity, and lower tax rates, so as to boost economic growth.
This reform places greater emphasis on optimizing the economic structure and enhancing the efficiency of all contributing factors. To this end, measures will be implemented to streamline the government and delegate powers, relax macro-regulation, spur innovation, and reform the financial sector, land use rights, and state-owned enterprises.
The reform plan is designed to accelerate structural change, fuel domestic demand and expand supply. Innovation will be encouraged to generate greater demand, which will in return lead to improvement in supply. Steady growth and structural adjustment should be mutually supportive and proceed in parallel.
Widespread entrepreneurship and innovation
At the Central Economic Work Conference (the annual meeting of the CPC Central Committee and the State Council, China’s cabinet, to set the national economic agenda) in December 2014, President Xi called for efforts to create an environment at policy and institution levels that would foster entrepreneurship and innovation.
Three months before that, at the Summer Davos Forum in Tianjinin in north China, Premier Li Keqiang said that China would encourage the widest possible participation in entrepreneurial activities and help stimulate innovation at the grassroots.
Widespread entrepreneurship and innovation would be a new engine for China to upgrade the economy, making it more efficient. The phrase indicates the leading role of the people and the need to tap into their unbound creativity for their full participation in China’s modernization drive and enjoyment of reform dividends as well as the fruits of development.
Promoting entrepreneurship and innovation would create more jobs, increase people’s income, boost upward social mobility, and contribute to social equity and justice. This would in turn encourage individuals to further pursue their ideals and realize their full potential while generating higher levels of wealth.
Streamlining government work and delegating authority
Streamlining government work aims to eliminate overstaffing and address duplication or overlapping of state functions to resolve problems such as inadequate provision of social public goods and services and lack of efficiency. Delegating authority intends to cut the red tape that subjects businesses to a complex and lengthy government approval process. This would free the government from unnecessary supervision to focus on what really falls within its purview, especially duties it has not performed adequately.
The current Chinese administration gives priority to accelerating the process of transforming government functions, streamlining the government and delegating authority.
The key to transforming government functions is to strike a balance between delegating authority and exercising control. To delegate authority means to inject more vitality into economic activities. To exercise control is to ensure that the market functions appropriately but not to stifle the economy with regulatory overreach.
The initiative to streamline government functions and delegate authority will rationalize the relationship between the government and the market, giving the market a bigger role in allocating resources. This will result in reform, restructuring and improving people’s well-being.
Shifting the focus from pre-implementation approval to monitoring during and after project implementation calls for a more detail-oriented and better targeted supervisory function for the government. It’s a change that is a challenge for government departments.
There is now a need for a paradigm shift and enhanced capacity-building. It is vital to develop a forward-looking vision and be proactive in gauging market dynamics to amplify the positive effect of market drivers and minimize the negative influence of any market failure in a timely manner.
(Source: Keywords to Understand China published by China Academy of Translation and China International Publishing Group)