Closely focus on promoting Chinese-style modernization and further deepen reform in an all-round way

Yu Miaojie

The meeting of the Political Bureau of the CPC Central Committee held at the end of April this year pointed out that in the face of the complicated international and domestic situation, in the face of a new round of scientific and technological revolution and industrial transformation, and in the face of the new expectations of the people, it is necessary to continue to push forward the reform.

Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China's economy has entered a new stage of development characterized by high-quality development. In the new era and new stage, high-quality development is the last word, and reform is an important magic weapon. In the new stage of development, it is necessary to completely, accurately and comprehensively implement the new development concept, accelerate the construction of a new development pattern, develop new quality productive forces, and realize Chinese-style modernization. Comprehensively deepening reform is a key measure to realize Chinese-style modernization, and we must consciously put reform in a more prominent position and further deepen reform in an all-round way around promoting Chinese-style modernization.

Build a unified national market and realize the dividends of economies of scale

After more than 40 years of reform, exploration and practice, China has successfully achieved a historic transformation from a highly centralized planned economy to a dynamic socialist market economy. However, due to the existence of problems such as market segmentation, local protection, and unfair competition, the domestic market is not unified and large but not strong, which affects the smooth progress of the domestic economic cycle. Only by building a unified, open, competitive and orderly market system can we give full play to the advantages of China's super-large-scale market and fully tap the potential of China's domestic demand.

The "unification" in the construction of a unified national market is not a return to the "plan", but an in-depth exploration of the relationship between the socialist market and the government, which is an important embodiment of the modernization of the national governance system and governance capacity. First of all, the starting point of "unification" is the unification of elements, that is, the construction of a unified market for talents, land, capital, technology, energy, data and other elements. Second, the core meaning of "unity" is the free flow of elements. Break through the institutional restrictions that restrict the flow of factors between regions, realize the free flow of factors between regions and industries, and make the best use of talents and materials, so as to promote the improvement of labor productivity. Again, the goal of "unification" is the unification of products and services. The unification of products and services requires "three same", that is, the same quality, the same line, and the same standard. For example, export enterprises produce products for export and domestic sale according to the same standards on the same production line, so that the products supplied to the domestic market and the international market reach the same level of quality. Gradually realize the effective connection of domestic and foreign trade quality standards, certification and accreditation, and improve the level of integrated development of domestic and foreign trade of market players.

In order to promote the formation of a unified national market, we must focus on reducing transaction costs, which covers two dimensions: explicit costs and implicit costs. In terms of reducing explicit costs, the inter-provincial redundant highway checkpoints will be abolished, the railway transportation capacity will be improved, and the high-speed rail will be vigorously developed, so as to save the time and cost of people and logistics, and effectively improve the efficiency of trade; In terms of reducing hidden costs, we should implement a unified market access system, adhere to the "two unswerving" principles, ensure that the private economy has an equal market position with the state-owned economy in terms of access to factor resources, and at the same time optimize the business environment, fight against various forms of bureaucracy, effectively improve administrative efficiency, and truly achieve "promoting stability through progress."

Innovation leads reform and accelerates the formation of new quality productive forces

The development of new quality productivity is an intrinsic requirement and an important focus for promoting high-quality development. High-quality development includes production, circulation, consumption, and distribution, of which the "bull's nose" is in production. Improving total factor productivity is the key to achieving high-quality production, and new quality productivity is an important starting point for improving total factor productivity. The reason why the new quality productivity is "new" is because there are new products, new formats, and new forms, and the key is high quality.

The source of new productivity comes from innovation. Innovation includes innovation in the narrow sense and innovation in the broad sense. Innovation in the narrow sense mainly includes technological progress and product innovation, there are significant differences between the two, product innovation is far more difficult than technological improvement, that is, breakthroughs from scratch are more difficult than marginal improvement. Technological progress and development, emphasizing the optimization of process flow and application expansion. When it comes to technological improvement, all companies can be the subject of innovation; Product innovation relies on the collaborative efforts of many large scientific research institutions. Innovation in a broad sense is the innovation of rules, mechanisms and standards. Through innovative rules, regulations, standards and management, we will actively integrate into global integration and actively participate in global economic and trade governance.

Improving R&D intensity is an important way to achieve the implementation of new quality productivity. China should focus more on original innovation in innovation and development, and increase investment in basic R&D in terms of policy support. In 2023, China's R&D expenditure will account for 2.64% of GDP, close to the average of OECD countries, but basic research expenditure will account for 6.65% of R&D expenditure, lower than the 10% proportion of the world's most developed countries. During the 14th Five-Year Plan period, China's basic research expenditure is expected to increase to about 7% of research and experimental development expenditure, and our investment in basic research will need to be further strengthened.

Promote the reform of the financial system and build a financial power with Chinese characteristics

To build a financial power, it is necessary to have six core financial elements, namely, a strong currency, a strong central bank, a strong financial institution, a strong international financial center, a strong financial supervision, and a strong financial talent team. In order to achieve a financial power, we must take the road of financial development with Chinese characteristics and vigorously promote the reform of the financial system, which is mainly reflected in the following four aspects.

First, adhere to the centralized and unified leadership of the CPC Central Committee over financial work and adhere to the people-centered value orientation. First of all, the current advantages of China's economy in terms of super-large-scale market, supply of the whole industrial chain, talent pool, and the advantages of the national system under the leadership of the Party can ensure that various policies can be carried out vertically and horizontally to the edge. Second, the concrete practice in the financial sector reflects the profound significance of people-centeredness. For example, the three priorities of "inclusive finance" are support for rural agriculture, support for private enterprises, and attention and assistance to other aspects, especially vulnerable groups.

Second, we should insist on taking financial services for the real economy as the fundamental purpose and insisting on risk prevention and control as the eternal theme of financial work. First of all, finance should better serve the real economy, and it is necessary to do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance. Second, it is necessary to be "realistic, fast, accurate, and bottom-up" in preventing financial risks. The first is to clarify the attribution of responsibilities and consolidate local governance. Second, when faced with financial problems, it is necessary to find the right time and respond quickly. The third is to adhere to the principle of precise implementation. Fourth, it is necessary to guard the bottom line of "preventing thunderstorms."

Third, we should continue to promote the development of financial innovation on the track of marketization and rule of law, and persist in deepening the structural reform of the financial supply side. First of all, we should speed up the improvement of relevant laws and regulations to ensure that financial activities have laws to follow and that those who violate the law must be prosecuted, so as to provide a solid legal guarantee for the healthy development of the financial market. Second, we should build a financial facility system based on ourselves to ensure the development of the real economy.

Fourth, we should adhere to the general tone of coordinating financial openness and security and adhering to the general tone of seeking progress while maintaining stability. First, we need to coordinate high-quality financial openness and high-level security. Second, monetary policy formulation should seek progress while maintaining stability, so as to promote stability.

Reform to the outside world and create a new pattern of comprehensive opening up

Although we are facing an extremely complex international environment, peace and development are still the mainstream of the times, and we must have this strategic determination. Today, we are still in the general trend of economic globalization, because the two core characteristics of economic globalization, the regionalization of production and the multilateralization of trade, still play an important role. Under such an international pattern, we must realize Chinese-style modernization with the path of peaceful development as its intrinsic characteristic, and we must still adhere to high-level opening-up, adhere to "external reform", and create a new pattern of comprehensive opening-up on a larger scale, in a wider range of fields and at a deeper level.

First, diversify export destinations. At present, the international situation is complex and changeable, and Chinese export enterprises should more actively explore the markets of emerging countries other than the European and American markets, such as BRICS countries and Latin America, and deepen the opening up to the north. When exporting products to different countries and regions, Chinese enterprises should provide differentiated products according to the income level and reality of the destination, so as to better meet local demand and enhance competitiveness.

Second, the scale of imports has expanded. At the macro policy level, we should continue to expand imports, reduce tariffs, and reduce trade costs, which will help introduce more products into the domestic market, thereby enhancing consumers' sense of happiness and gain. At the enterprise level, if intermediate goods are imported, the cost reduction is conducive to the sustainable growth of corporate profits and the increase of local fiscal profits and taxes. If the import is a final product, the reduction of tariffs will bring competition in the short term, but in the long run, it will increase the productivity of the industry and promote the development of the industry.

Third, trade in services should be specialized. China has become the world's largest country in trade in goods, but there is still a lot of room for development in trade in services. In terms of total volume, the total scale of China's import and export of services is less than 900 billion US dollars, which is still a certain gap with the total amount of service trade in the United States, and it is necessary to continue to expand the total amount. From a structural point of view, China's trade in services has a large deficit in major industries, and in order to achieve a trade balance, it is necessary to take measures to promote the surplus of trade in services, especially the expansion of trade in tourism services and education services. From the perspective of characteristics, it is necessary to explore the comparative advantages of the mainland's service trade industry, such as the traditional Chinese medicine hospital industry, in order to shape the unique industrial characteristics.

Fourth, outward direct investment should be deepened. The scale of China's outbound investment has always been at the forefront of the world, and its "going out" has been very successful. But Chinese companies still have to "go in" and "go up". "Going in" means that enterprises should assume more social responsibilities after "going out" and truly realize people-to-people bonds. "Going up" means that OFDI should focus on quality, and while opening up markets, it is also necessary to pay attention to the upgrading of technology and other aspects.

Fifth, regional economic and trade cooperation has become hierarchical, with the land Silk Road developing to the east and the maritime Silk Road developing to the north. Actively promote the differentiated development of the "Belt and Road". The construction of the overland Silk Road should focus on developing eastward and strengthening economic and trade cooperation with the Far East. On the one hand, the construction of the China-Japan-South Korea Free Trade Zone should be promoted to the north, especially the construction of the China-Japan Free Trade Area in an orderly manner; On the other hand, consideration should be given to strengthening economic and trade cooperation with the Middle East, West Asia, and North Africa. The development of the land Silk Road to the east and the development of the maritime Silk Road to the north can build a large sea and land corridor in Northeast China, which can not only reshape China's strategic map of opening up, but also vigorously promote the comprehensive revitalization of Northeast China, and truly realize the promotion of reform through opening up and development through reform.

In short, a new era and a new journey. As long as we grasp the hard truth of high-quality development and vigorously deepen reform, the time has come for Chinese-style modernization to come.

(The author is president of Liaoning University and fellow of the International Economic Association)