Opinion: Take a Problem-Oriented Approach to Deepen Comprehensive Reform

The Third Plenary of the 20th Communist Party Central Committee recently convened in Beijing and endorsed a comprehensive "Resolution of the Central Committee of the Communist Party of China on Further Deepening Reform Comprehensively to Advance Chinese Modernization." This resolution includes 60 clauses and over 300 reform measures that span various sectors including economic, political, cultural, social, national security, defense, and military. The reforms aim to be completed by the 80th anniversary of the People's Republic of China in 2029, which has generated significant anticipation for concrete changes [para. 1].

The resolution emphasizes the principle of "adapting to the evolution of practice, and taking a problem-oriented approach." It underscores the ongoing necessity of reform to navigate significant risks and challenges, ensuring continuous stable progress for the party and state [para. 2].

In his remarks, President and General Secretary Xi Jinping described Chinese-style modernization as a pioneering endeavor marked by contradictions and challenges. He pointed out the current global landscape—plagued by unprecedented changes, conflicts, and intensifying issues—placing China at strategic opportunities and challenges with an increasing number of unpredictable elements. Xi emphasized the need for deeper reforms to manage risks and crises, transforming them into opportunities for development [para. 3].

The resolution identifies economic structural reform as paramount, aiming to establish a high-level socialist market economy system by 2035. It stresses the role of market mechanisms to create a fair and dynamic market environment and reaffirms the commitment to support both the public and non-public sectors. Ensuring equal access to production factors, market competition, and legal protection for all economic entities regardless of ownership is highlighted [para. 4].

A specific law promoting the private economy is also proposed to address concerns of private enterprises, aiming to create a favorable environment and growth opportunities for the non-state-owned economy [para. 5].

Improving macroeconomic governance requires coordinated progress in fiscal and financial reforms. Enhanced local fiscal autonomy, increased local tax sources, and expanded local government special bonds are some key measures proposed. Central fiscal responsibilities and expenditures are to be appropriately strengthened [para. 6].

The decision acknowledges the pressing issue of local financial balance. It suggests expanding local tax management authority and optimizing the fiscal transfer payment system to ensure that local fiscal capabilities match their responsibilities. Measures to improve the collection and allocation of various taxes are mentioned [para. 7][para. 8].

The resolution calls for all revenues derived from administrative power, government credit, and state-owned assets to be incorporated into budget management to centralize budget allocation authority, enhance budget management's uniformity and standardization, and refine transparency and supervision. These measures aim to eliminate soft budget constraints and modernize the fiscal system [para. 9].

To deepen financial system reforms, the proposal suggests measures to improve capital markets, balance investment and financing, enhance risk prevention, strengthen regulation, and promote stable market development. Long-term funds should flow into the market, quality of listed companies improved, and a robust financial law is to be drafted as structural support for China's financial market [para. 10].

Additionally, the proposal emphasizes promoting urban-rural exchange, accelerating urbanization of the agricultural migrant population, and ensuring these individuals enjoy the same social welfare benefits as urban residents. It advocates for enhanced rights protections for farmers, the development of new rural collective economies, marketization of rural collective land, and well-structured land value distribution mechanisms [para. 11].

The proposed reforms are extensive and demand collaboration across various regions and departments for full implementation [para. 12].

Reflecting on past reforms over the past 40 years, the resolution emphasizes the importance of daring to innovate, tackle tough problems, and navigate potential dangers to continue achieving significant progress [para. 13].