'Visible and invisible hands'

President Xi Jinping's recent emphasis on the necessity of the government and the market correctly playing their respective roles to promote the sustainable and healthy development of the economy should serve as a timely reminder that any over-use of either the visible hand or the invisible hand will produce the opposite effect.

The Third Plenum of the 18th Communist Party of China Central Committee held in November vowed to give the market a decisive role in the distribution of resources, the highest status the market has been extended since the launch of reform and opening-up in 1978, but this does not mean the negation of the government's role in economic development.

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China's government-led economic model has helped the country score an economic success, but it has also caused serious imbalances in its economic structure and resulted in a series of contradictions, whose resolutions depend on more market vitality and the upgrading and transformation of the country's economic structure, said an article in 21st Century Business Herald.

To give the market a decisive role, the government should reduce its direct interventions into the distribution of resources and microeconomic activities and set up an open, competitive and orderly market system. One in which market forces can play a greater role in those economic activities that should be free of the government's visible hand.

The government should refrain from directly intervening in the market, transform its function, tighten market supervision, strengthen public services and promote social equity and justice. To facilitate such a transformation of its role, the government should deepen the reform of its administrative system, innovate its management methods and improve its regulatory system.

Regrettably, local governments have not done enough to push forward corresponding reforms. At a time when the country's economic growth is slowing, there are voices calling for the government to use its visible hand to stimulate economic development, something that would obviously be a regression for the market mechanism.

With the economic slowdown being used by some local governments as an excuse to delay some reforms and transform their functions, President Xi's stress on the invisible and visible hands playing their proper roles should be heeded to ensure sustainable development in the future.