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Modernizing the Macroeconomic Governance System and Capacity

By Qiu Ping Source: Updated: 2023-04-03

We shall improve the macroeconomic governance system.

We must quickly establish macro-control objectives, plans, policies, coordination, security, monitoring, and evaluation, all adapted to the new development philosophy and the requirements of high-quality development.

We must fully leverage the strategic guiding role of national development plans and ensure that general and partial objectives, medium- and long-term plans, and annual plans are consistent and continuously progress. We need to strengthen macro-policy coordination on fiscal and monetary issues and know when to use macro-control.

We must improve systems and mechanisms for promoting consumption to strengthen its fundamental role in our economic development, deepen reform of investment and finance to leverage the vital role that investment plays in optimizing the supply structure, and improve mechanisms for formulating and implementing macroeconomic policies, with an emphasis on managing public expectations.

We need to improve the coordination mechanisms for macroeconomic policies, strengthen evaluations of the consistency of macro-policy objectives, and improve processes that enable market entities to participate in the formulation of macroeconomic policies, thereby making governance a more collective effort.

We must clearly understand the impact that changes in the international situation and technological progress will have on socioeconomic development and fully utilize the Internet, big data, and artificial intelligence to modernize macroeconomic governance.

We shall construct modern systems of public and private finance.

We need to improve the modern budget system and implement performance-based budget management to ensure that we use public funds more efficiently.

We need to optimize the division of authority and financial powers among governments at all levels, establish a financial relationship between the central and local governments that is characterized by clearly defined powers and responsibilities, coordinated fiscal support, and balanced regional distribution, and improve the system of transfer payments.

We must deepen reform of the tax system, optimize the tax structure, improve the local tax system, and avert and allay risks associated with government debt. We must also continue the reform of the financial system, strengthen modern financial oversight, introduce a modern central bank system, and improve the mechanisms for monetary policy decision-making.

We need to develop inclusive finance as well as green finance and improve the modern financial services system, with the focus on supporting the real economy. We must reinforce the systems that safeguard financial stability, lawfully place all types of financial activities under regulation, improve prevention and early warning capabilities, swiftly ameliorate financial risks, and firmly prevent systemic risks from arising.

We need to improve the functions of capital markets, increase the proportion of direct financing, and implement the registration-based IPO system across the board. We must deeply comprehend the features and behavioral principles of capital under the socialist market economy and fully leverage its positive role as a factor of production.

We also need to methodically formulate plans for utilizing capital, improve whole-process supervision, with connected ex-ante guidance, interim vigilance against risks, and ex-post monitoring, and regulate and guide the healthy development of capital in accordance with the law to prevent its disorderly expansion.

We shall create a more market-oriented, law-based, and international business environment.

We must swiftly transform the functions of government and advance reforms to streamline administration, delegate power, improve regulation, and upgrade services to let the market manage what the government should not while ensuring that the government performs its appropriate duties effectively and thoroughly.

To adapt to new forms and models of business as well as systems management across domains and regions, we must use a combination of economic, legal, administrative, and technological means to create new, more-efficient market oversight and service methods.

We need to encourage and safeguard fair competition, protect the rights and interests of producers and consumers in accordance with the law, take stronger action against monopolies and unfair competition, and resolutely crack down on local protectionism and administrative monopolies.

We will make laws and regulations and technical management standards more compatible with our modernized economy and improve the market environment and credit rating system. We will foster a stable, fair, transparent and predictable business environment, and continuously make it more market-oriented, law-based, and international.