Xi Jinping Economic Thought for a New Era of Chinese Socialism

By: Ma JiantangFrom:English Edition of QiuShi Journal July-September 2018|Vol.10,No.3,Issue No.36 | Updated: 2018-Sep-7 17:36
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Since the 18th CPC National Congress in 2012, Xi Jinping Economic Thought for a New Era of Chinese Socialism has taken shape. As the latest achievement in the study of political economy under Chinese socialism, Xi Jinping Economic Thought is an incisive summary of the practical experience of China’s economic development since the launch of reform and opening up in 1978, and particularly since the 18th National Congress. It thus represents the basic principles for ensuring that the tasks related to China’s economic development in the new era are performed well, and offers Chinese wisdom and a Chinese approach for resolving the developmental issues facing all mankind.

An EMU train passes through a sea of canola flowers in Xinji Township, Nanzheng County, Hanzhong City, Shaanxi Province. PHOTO BY XINHUA REPORTER TAO MING

I. Strengthening the CPC’s centralized and unified leadership over economic work

Since the 18th National Congress, China has remained committed to the underlying principle of pursuing progress while ensuring stability, and has brought its economic strength up to a new level. China’s economic success is owed to the CPC’s centralized, unified leadership over economic work, as well as the sound guidance of Xi Jinping Economic Thought.

The leadership of the CPC is both the most essential attribute and the greatest strength of Chinese socialism. Strengthening the Party’s leadership over economic work is conducive to pooling collective wisdom and building consensus, as well as mobilizing all parties and forming synergy.

II. Upholding a people-centered concept of development

Ensuring that development is for the people, reliant on the people, and that its fruits are shared among the people is the linchpin that runs throughout Xi Jinping Economic Thought. As General Secretary Xi has pointed out, leading the people to a better life is CPC’s abiding goal. We must put the people’s interests above all else, see that the gains of reform and development benefit all our people in a fair way, and strive to achieve shared prosperity for everyone. Major statements made by General Secretary Xi have become an important source of guidance for China’s economic and social development. These include the following: “To ascertain whether or not we have achieved moderate prosperity, we must look to rural areas”; “We must make efforts to bring the growth of personal incomes in step with the growth of the economy”; “Lucid waters and lush mountains are invaluable assets”; “We must ensure that the public can breathe fresh air, drink clean water, eat safe food, and live in amicable environments”; and “We must make public health a strategic priority in overall development efforts.”

Since the 18th National Congress, China has thoroughly implemented a people-centered concept of development, and a whole raft of initiatives benefitting the people has been put in place. As a result, the incomes of urban and rural residents have shown sustained increases, historic achievements have been made in poverty alleviation, smooth progress has been made with the new, people-first model of urbanization, and notable headway has been registered in ecological and environmental governance. Millions upon millions of Chinese people, to whom our country belongs, are benefitting more fully and fairly from reform and development.

III. Understanding the big picture and the laws of economic and social development

Before our economic work can be done well, we must first make a correct assessment of China’s current stage of development and have an accurate understanding of the laws governing development. Since the 18th National Congress, China’s economic development has entered a new normal. Xi Jinping has pointed out that three major features have emerged in the country’s current economic development, namely a changing pace of growth, structural optimization, and transforming growth drivers. Both now and in the near future, adapting to the new normal, understanding it, and guiding its development will remain the prevailing logic of China’s economic development. We must adapt to and understand the trends of China’s economic development within the new normal, and cast aside the notion of bringing back rapid growth through outdated mentalities and methods. We must continue making progress, innovations, and breakthroughs amidst change, and pave a new developmental path that brings its advantages fully to bear with better quality, higher efficiency, and a more optimal structure.

The important determination that China has entered a new normal of economic development has pointed out the current developmental stage and historical bearing of the country’s economy, and has also brought to light the objective laws governing the operation of the economy in this new stage. Moreover, it has played an invaluable role in helping China to rationally respond to the international financial crisis, withstand downward pressure on the economy, and ensure that the economy always runs within rational parameters. On this basis, the 2017 Central Economic Work Conference put forward the important judgment that “China’s economy has been transitioning from a phase of rapid growth to a stage of high-quality development.” The conference also clarified that for the near future, our definition of developmental thinking, formulation of economic policy, and implementation of macroeconomic control must all be checked against the fundamental requirement of promoting high-quality development.

IV. Showing the way for high quality development with the new development philosophy

Since the 18th National Congress, General Secretary Xi has introduced a new philosophy of development that is innovative, coordinated, green, open, and shared. The transition from understanding, guiding, and becoming accustomed to the new normal of economic development to showing the way for high quality development with the new development philosophy reflects the new knowledge that China has gained with regard to the laws of economic and social development.

As an important component of Xi Jinping Economic Thought, the new development philosophy is a fundamental basis and source of strategic guidance for promoting high-quality development in the new era, and represents China’s voice on the global development stage. High-quality development is that which embodies the new development philosophy and can adequately satisfy the people’s ever-increasing needs for a better life. It is also the development in which innovation becomes the primary driver, coordination becomes an endogenous feature, eco-friendly growth becomes a universal pattern, openness to the world becomes a necessity, and the sharing of benefits becomes the fundamental goal.

V. Focusing our economic work on advancing supply-side structural reform

Upon entering the new era, old problems caused by our previous developmental model became intertwined with new problems that emerged with this new stage. To solely rely on the demand-side drivers of investment, consumption and exports is already difficult enough to effectively solve the problem of developmental momentum, let alone the problem of developmental quality. Thus, it is urgent that we devote our energy to the supply side, and focus on resolving both its major structural imbalances and mismatching with demand. Supply-side structural reform has the ultimate goal of satisfying demand, targets at improving quality, and will be achieved through continuing reform. Therefore, setting our sights on improving the supply-side structure and starting at the production end, we should raise the quality and efficiency of the supply system, increase effective and medium to high-end supply, and strengthen the supply-side structure’s adaptability to changes in demand. These efforts will push our country toward development that is of higher quality and more efficient, sustainable, and fair.

Supply-side structural reform is a sound solution to the many difficulties currently facing China’s economy. It is the key to establishing a high-quality, efficient, and diversified supply system, as well as a systematic design for integrating structural optimization with reform and innovation. It may be said that the shift from the “three processes” (economic slowdown, painful structural adjustment, and absorbing previous stimulus policies) to “the new normal”, and then to supply-side structural reform has been a process of acquiring deeper understanding through practice. This process has not only addressed the problem of how the economic situation should be perceived, but has also demonstrated how we can take action. In recent years, China has made supply-side structural reform the central theme in its efforts to cut overcapacity, reduce excess inventory, deleverage, lower costs, and mitigate deficiencies. In addition, China has focused energy on invigorating the real economy, and made new progress with implementing the quality-oriented strategy and advancing innovation-driven development. As a result, the vitality, influence, and steering capacity of the state-owned economy have been enhanced, while the vitality and creativity of the non-public sector of the economy have been aroused, thereby injecting economic development with constant and powerful momentum.

VI. Maintaining strategic resolve and thinking in terms of worst-case scenarios

In order to maintain strategic resolve and uphold worst-case scenario thinking, it is essential that we put risk prevention in a position of prominence, doing our best to prevent the occurrence of major risks while ensuring that we can withstand risks that do arise.

As one of the three major tasks set by the 19th National Congress, forestalling and defusing major risks is an important guarantee for healthy and sustained economic growth, as well as a creative application of worst-case scenario thinking. The key to forestalling and defusing major risks in the economic domain is targeting financial risks and resolutely preventing the emergence of systemic financial risks. Since the 18th National Congress, China has upheld worst-case scenario thinking and given higher priority to forestalling financial risks. By properly dealing with risks, such as cash crunches and abnormal fluctuations in the stock and foreign exchange markets, and promptly handling major cases in the financial sector, China has successfully safeguarded its national economic security.

(Originally appeared in People’s Daily, March 22, 2018)

Ma Jiantang is Secretary of the CPC Leadership Group and Vice President of the Development Research Center of the State Council of the People’s Republic of China.