The Third Plenary Session of the CPC 11th Central
Committee, held in 1978, made the decision to shift the
policy stress to socialist modernization, and implement the
strategic decision on reform and opening to the outside
world. The reform began in the countryside: The contracted
household responsibility system linking remuneration to
output and the two-layer management system featuring the
integration of centralization and decentralization began to
be implemented; centralized and assigned purchases of
agricultural and sideline products were gradually
eliminated, and controls on the prices of most agricultural
and sideline products were relaxed; the adjustment of the
industrial structure in rural areas, the development of
diversified operations and township enterprises mobilized
the peasants’ socialist enthusiasm for production. The
Third Plenary Session of the CPC 12th Central Committee,
held in 1984, adopted the Decision on Restructuring the
Economic System, which signaled the elevation of the reform
of China’s economic system to an urban-centered stage.
The 14th National Congress of the CPC held in 1992
established Deng Xiaoping’s theory of building
socialism with Chinese characteristics as the guiding policy
in China, and put forward the goal of China’s economic
reform as establishing a socialist market economy system.
Its principal contents may be summarized as follows:
Adopting a series of macro-adjustment and control measures
to carry out the reform in depth and in all aspects, public
ownership will continue to be the main form of ownership as
various types of ownership are jointly developed; the
operation mechanism of state-owned enterprises will be
further transformed to meet the requirements of the market
economy; the property rights and responsibilities of
enterprises will be clearly defined, the functions of the
government separated from those of enterprises, and
enterprises scientifically managed; an open and unified
national market system will be established, closely
integrating urban and rural markets, providing for
reciprocal flows between domestic and international markets,
and promoting the optimization of resource allocation;
changing the government's functions in economic management
and establishing an optimal macro-regulatory system chiefly
employing indirect means; an income distribution system
based on distribution according to work will be established
in which efficiency is given precedence and fairness in
distribution is taken into account; a multi-tier social
security system will be set up to accelerate the development
of China’s economy. The 15th National Congress of the
CPC, held in 1997, put forward the viewpoint that the
non-public- ownership sector is an important component part
of China’s socialist economy. Encouraging essential
production factors, such as capital and technology, to
participate in the distribution of gains enables the reform
of China’s economic system to take bigger steps. By
1999, the reform had gone smoothly in every aspect, and
remarkable progress had been made. For instance, much work
had been done to deepen the reform of the grain circulation
system, the reform of state-owned enterprises and the reform
of the banking system, and new achievements had been made.
Reforms had been proposed for the housing and medical
insurance systems; and plans for the reform of the
investment, banking, financial and taxation systems were
being formulated. The institutional restructuring of the
State Council has been going smoothly, and has achieved
important results. Now, China’s socialist market
economy system is being set up, the basic functions of the
market in resource allocation have been obviously
strengthened, and the initial framework of the
macro-adjustment and control system has taken shape.
Moreover, the form of economic growth is changing from the
extensive to the intensive type. By 2010, China will have
established a comparatively sound socialist market economy,
which will be comparatively mature by 2020.
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