China pushes market-based reform despite epidemic

In a very important move, the guideline outlined an agenda for deepening market-based reforms in the allocation of basic resources－land, labor, capital and data. Previously, markets have been dominant in consumption, production and intermediate-product markets, but the "commanding heights", especially land and energy, have been only partly marketized. The planned reforms should be a big step in improving efficiency by allowing the market to price these fundamental inputs.

The reforms announced last week are not a change in policy direction. They are a reinforcement of market-based policies formulated since Xi's first year in office and a confirmation that the novel coronavirus has not changed the reform orientation of economic policy.

Individuals and companies cannot plan and markets cannot work without a clear, reliable legal system. On many occasions, Xi has called for strengthening the rule of law. In 2017, he told the country's officials at all levels to take the lead in studying and observing the law and promoting the respect of virtue and law within society.

Recognizing again that bureaucracies need to reform in order to properly enforce commercial law, the Oct 28-31 Fourth Plenary Session of the 19th CPC Central Committee explicitly set, for the first time, "promoting modernization of the country's governance system and governance capacity" as the overall goal of comprehensively deepening reform.

Also, during the two sessions meetings, the National Development and Reform Commission reiterated that China will continue to treat foreign companies in a market-based and equal way. Pro-business policies will apply equally to foreign firms.

Last year, China announced a raft of new laws and regulations that further opened the nation's markets to foreign investors. A new Foreign Investment Law was designed to create a sound business environment and better protect the rights of foreign investors. China's financial sector is rapidly being opened to foreign competition. China also created a "negative list", allowing foreign companies to invest in any sectors that are not explicitly out of bounds.

Wang Shumei, head of the Civil Adjudication Tribunal No 4 of the Supreme People's Court, told China Daily on the sidelines of the two sessions that the top court has been working on legal documents and creating online platforms in judicial work to ensure the quality and efficiency of foreign-related case hearings despite the problems caused by the contagion.

This emphasis on reforms designed to improve the business climate is paying off. In the World Bank's Ease of Doing Business rankings, China moved up to number 31 globally, from 46 just a year earlier.

China's leaders have repeatedly stressed that the nation's future depends on upgrading the economy toward production of higher value-added products. To accomplish this and to continue to raise living standards, the government is implementing reforms that are needed to improve economic efficiency. The recent statements during the two sessions and by the State Council show that China is not letting the novel coronavirus interfere with its move toward a system based on the rule of law and a market-based allocation of resources.

The author is a senior staff commentator of China Daily.