Decentralize and diversify

Economic, social and political reforms needed to promote 'five-in-one' development and establish a modern society

The 18th national congress of the Party indicated a shift from economy-centered development to "five-in-one" - economic, political, cultural, social, and eco-civilization - development.

Since 1978, when the Party launched reform and opening-up, continuous efforts have been made to reform the country's economic system, which has resulted in a 30-year period of fast development. However, research suggests that the dividend from this fast growth is now coming to an end, and more reforms are needed for further development.

It is clear that the change from a planned economy to a market economy was accompanied by social and political reforms. So with the deepening of economic reform there is an urgent need for complementary social and political reforms.

From the acknowledging of farmers' autonomy at the start of reform to the household contract responsibility system, and from enterprises' ownership reform to the 1992 goal of a socialist market economy and then to the establishing of a modern enterprise system, we see the development of a market economy is a continual process in which the government keeps transferring power and access for business activities to individuals and entities and also a process of decentralization and diversification.

Under the planned economy, the government monopolized the management and distribution of all resources, including living resources, social security, and work benefits. The market, on the other hand, provides room for economic activities by individuals and entities whose choices comprise the basis for the distribution of resources. Those mechanisms with a heavy planned nature, such as the organizing of administrative units and social organizations, and a highly centralized process for policymaking have been declining as the private economy keeps expanding.

Since reform of the economic system was launched in the late 1970s and mid-1980s, reforms in education, culture, medical care and technology, and systematic reform of administrative institutions and administrative structures, and fiscal and taxation policies have also been introduced. These came naturally as the market economy developed.

Social and political reforms must not lag behind or the market economy will be unable to get enough social, political, cultural and moral support. And if the strain between the market economy and the planned social and political systems persists then economic structural problems will accumulate and social conflicts can break out. More worryingly, the social structure will be challenged. So reforms of the social and political systems are urgently needed.