Entering the new century, with the preliminary establishment and gradual improvement of the socialist market economy system, China’s economy has developed rapidly, been full of vitality, and increasingly open. At the same time, it also requires us to further understand and master the characteristics and internal laws of the socialist market economy, so that we can formulate and implement policies and measures in line with objective economic laws, which is conducive to the healthy development of the national economy.

　　According to the current reality in China, we need to understand the characteristics and internal laws of the socialist market economy well, mainly including the following aspects.

　　I. The market plays a fundamental role in resource allocation, and the law of value regulates socialist production and circulation.

　　The greatest difference between the socialist market economy and the traditional planned economy lies in the fundamental distinction of the role of the market in resource allocation; the former plays a fundamental role, that is, the role of the main regulator; while the latter does not play a role or only plays a very small role. According to the theory of Marxism economics, in the socialist market economy, the law of value is the main regulator of social production and circulation; while in the traditional planned economy, the law of value does not play a regulatory role, and it is the state’s directive plan that regulates social production and circulation.

　　The reason why China has implemented reform and opening up, promoted economic system reform, and shifted from a planned economy system to a market economy system is that after the planned economy played a certain positive role in the 1950s, its drawbacks became increasingly prominent, with low efficiency, lack of vitality, products not meeting market needs, and leading to a widening gap in economy and technology with developed countries, and a slow improvement in the living standards of the people. In contrast, since the reform and opening up in 1979, with the strong promotion of market-oriented reform, China’s economic development has accelerated, with an average annual growth rate of 9.4% over 25 years, ranking among the top in the world. The economic strength and comprehensive national strength have been greatly enhanced, and the per capita GDP exceeded 1000 US dollars last year, significantly improving people’s lives and generally reaching a level of小康. This indicates that replacing planned economy with market economy can further liberate social productive forces, more effectively utilize and allocate resources, and achieve more fruitful development results.

　　In the socialist market economy, the objective law governing economic operations is primarily the law of value, that is, the prices of goods and services fluctuate with changes in supply and demand. When supply exceeds demand, prices rise; when demand exceeds supply, prices fall. Enterprises decide and adjust their production and operation based on changes in market prices, thus maintaining a balance between social production and social demand. This is the main meaning of the law of value regulating social production and circulation. Engels once said in ‘Anti-Dühring’, ‘The law of value is the basic law of commodity production.’ China’s famous economist Sun Yefang said as early as the early 1960s, ‘Among thousands of laws, the law of value is the first law.’ This famous saying is very appropriate for the socialist market economy today. Therefore, we say that in economic work, we must respect objective laws, starting with respecting the law of value, as well as related supply and demand laws, competition laws, and so on. All market economic activities, except for those that belong to natural monopolies, have externalities, provide public goods, and so on, should be left to be regulated by the law of value, that is, market regulation.

　　It is noteworthy that there are still some deficiencies in giving the market a fundamental role in resource allocation. The most significant issue is that the government has an excessive amount of resources. The government intervenes and approves excessively in economic activities, and for some resources that could be optimized through market mechanisms, the government adopts planned economy methods, thus leading to waste and loss. Sometimes, the government’s monopolization and blockade of the market also affects fair competition, causing market signals to become distorted. Therefore, to improve the socialist market economy system, the most important thing is to better play the fundamental role of the market in resource allocation, making enterprises the real market players; it is also necessary for the government to further transform its functions, no longer acting as the main player in resource allocation and market influence, not directly intervening in the production and operation activities of enterprises, but instead respecting the role of value laws and giving full play to the positive role of market mechanisms in regulating resource allocation, allowing enterprises to make production and operation decisions mainly based on market signals.entry method lottery entry method and Latest

　　Secondly, enterprises are the main body of market economic activities, and truly realizing the separation of government from enterprise and capital from government.

　　Choosing a socialist market economy, where the market plays a fundamental role in resource allocation, necessitates that enterprises become independent market entities and entities of interest, engaging in independent operations, bearing their own profits and losses, and assuming their own risks. For non-state-owned enterprises, achieving this is relatively easy, although there is still considerable administrative intervention by the government that needs to be gradually resolved. However, for state-owned enterprises, it is not as easy. Over 20 years of experience from the reform and opening-up shows that for state-owned enterprises to break away from being appendages of主管部门 and become independent market entities is a transformation that requires a complete change. On one hand, from the perspective of enterprises, they used to rely on superior主管部门 for everything, following their instructions, not caring about the economic benefits, lacking the enthusiasm and initiative for improving management and operations, and had no vitality. Now, to transform into independent market entities, engaging in independent operations and bearing their own profits and losses, they must strive to adapt to the market, participate in market competition, and assume risks. If done well, they can continuously develop and grow, and the managers and workers can also increase their income. Otherwise, they may incur losses or even bankruptcy. The market mechanism is like an unyielding whip, urging enterprises to continuously improve technology, enhance management and operations, and move forward without stopping, without slackening. On the other hand, from the perspective of the government, it used to directly command various microeconomic activities, approving and issuing instructions for all kinds of economic activities of enterprises. Due to the often多头 management of enterprises, with multiple dragons controlling the water, when enterprises do well in production and operation, each department competes to take credit for the achievements, but when problems arise, they all shirk responsibility, no one willing to take responsibility. Therefore, the most important thing to promote market-oriented reform is to transform government functions, implement the separation of government and enterprise, and separate government and capital, so that the government no longer intervenes in the production and operation activities of enterprises, and cancels some original departments responsible for enterprises. As such reforms affect the interests of many administrative management departments and their officials, they often face obstruction and difficulties. Once accustomed to being a ‘mother-in-law’ and unable to issue orders, it is very uncomfortable. Therefore, for state-owned enterprises to truly become independent market entities, they must adhere to the separation of government and enterprise, the separation of government and capital, and must have the cooperation of the transformation of government functions. The government no longer intervenes in microeconomic activities, and the government functions are transformed into economic regulation, market supervision, social management, and public services, that is, transformed into mainly serving market entities and creating a good development environment.

　　It should be pointed out that, up to now, the transformation of government functions, the separation of government from enterprises, and the separation of government from capital, has not been fully implemented. Some former administrative authorities have transformed into administrative companies or flip-flop companies, still directly intervening in the production and operation activities of enterprises. Even though state-owned enterprises have undergone the reform of establishing a shareholding system, it is still difficult to separate government from enterprises as long as the state-owned shares are dominant. Because state-controlled companies actually become the ‘mother-in-law’ of shareholding companies, and the controlling companies are often the administrative companies or flip-flop companies mentioned earlier. This makes the shareholding companies appear to have changed their system on the surface, but they have not achieved the separation of government from enterprises and are still not true market entities. There are also government departments, especially many local governments, which show excessive care for enterprises in their regions, whether state-owned or not. Not only do they block the market to open up sales channels for local products and exclude foreign products, but they also provide convenient conditions for the construction and development of local enterprises in terms of project approval, financing, taxation, land use, and sometimes even resort to means that are not aboveboard or even illegal, to facilitate the construction and development of local enterprises. The ‘Tieben Incident’ in Jiangsu Province in 2004 is a case in point. A private small steel mill with only 300 million yuan in capital was to build a large-scale steel mill with an annual output of over 8 million tons, with an investment of over 100 billion yuan, without reporting the project approval, without undergoing environmental protection department review, and violating regulations by occupying over 2000 acres of farmland. It is unimaginable without the strong support of the local government. Moreover, when local enterprises face bankruptcy or are burdened with debt due to poor management, local governments will stand up to act as a shield, beg the central government, or request money or loans from central departments for rescue, which is equivalent to taking unlimited responsibility for the enterprises. This goes against the principles of the market economy, is a serious misplacement of government functions, and is also an indication that enterprises have not yet become true market entities.

　　To make state-owned enterprises independent market entities, not only should the separation of government and enterprise be implemented, but also the separation of government and capital, that is, the separation of the government’s public management functions from the government’s role as an investor in state-owned assets. When the government performs the investor function for state-owned enterprises in which it has sole ownership or controlling interest, it can only act as a boss or shareholder, and cannot act as a mother-in-law, nor can it play the role of the board of directors or management level. Otherwise, it would still be a combination of a boss and a mother-in-law, and the separation of government and enterprise would not be achieved.

　　It can be seen that to do things according to the laws of socialist market economy, and to make the market play a fundamental role in resource allocation, it is first necessary to make enterprises independent market entities, and the government mainly performs public management functionsonline website sports and How to find it. It should be noted that the problem in this aspect has not been resolved yet, and further deepening of reforms is still needed to gradually achieve this.

　　The main task of national macro-control is to implement the scientific concept of development and promote the stable and rapid development of the national economy.

　　Modern market economy is not completely left to the market mechanism for regulation, but is subject to macro-control by the state. This is also true for socialist market economy.

　　The report of the 16th National Congress of the Communist Party of China proposes: “To promote economic growth, increase employment, stabilize prices, and maintain balance of payments as the main objectives of macro-control.” This is a scientific summary of the rich experience of macro-control in our country over the past 20 years of reform and opening up, and is in line with the laws of market economic development. Many market economies in the world also regard the above four aspects as the main objectives of national macro-control. Practice from both China and abroad shows that under the conditions of a market economy, to properly handle the relationship between growth and stability, it is necessary to promote economic growth while maintaining economic stability. In the long run, achieving economic growth in a stable environment is the most desirable and fastest way. Otherwise, if one片面 pursues economic growth without paying attention to economic stability, and does not seek growth in stability, it is easy to experience big ups and downs, which inevitably lead to waste and loss of productivity. In this way, taking a detour will actually slow down. Among the four major goals mentioned above, the first is to promote economic growth, and the other three are about maintaining economic stability. Therefore, the national macro-control can be summarized as promoting the stable and rapid development of the national economysports betting platform and How to find it. The key point is that under conditions of economic stability, market signals are relatively stable and accurate, and the function of market effective resource allocation can be better realized, which is conducive to promoting economic growth and achieving rapid development.

　　In the socialist market economy, to carry out good macro-control, it is necessary to establish and seriously implement the scientific development concept, and achieve comprehensive, coordinated, and sustainable development. This is an important summary of China’s experience in developing the socialist market economy. The basic content of the scientific development concept is people-oriented, with five integrations, namely, integrating urban and rural development, integrating regional development, integrating economic and social development, integrating harmonious development between humanity and nature, and integrating domestic development with opening up to the outside world. The essence of integration is coordination, and the essence of the five integrations is to achieve five coordinated developments. By achieving the five integrations, it can effectively maintain economic stability and seize the opportunity to promote economic growth, thus realizing the stable and rapid development of the national economy.

　　Under the conditions of a market economy, macroeconomic regulation mainly adopts economic and legal means. This is fundamentally different from the use of administrative means by the state to regulate social and economic activities under the planned economy. Specifically, it mainly applies fiscal and monetary policies, implementing tight fiscal and monetary policies when the economy is overheated or shows signs of overheating; conversely, when the economy is cold or there is deflation, implementing loose fiscal and monetary policies. The purpose is to maintain economic stability, strive to smooth out the amplitude of economic fluctuations, and prevent big ups and downs. Sometimes, this operation is called countercyclical measures, aiming to prevent the economy from rising too high during the upswing, and to strive for a longer period of growth; and not to fall too much during the recession, with a relatively short duration. Therefore, the country’s macro-control, as well as the implementation of loose or tight fiscal and monetary policies, are to achieve short-term (usually one or two years) economic balance, and cannot be long-termized. According to this, if the proactive fiscal policy implemented in China since 1998 is long-termized, it seems to be inconsistent with the function of macro-control under the market economy. In this context, we should also not view expanding domestic demand as a long-term policy. When there is inflation or obvious inflationary pressure, whether we can generally talk about expanding domestic demand is worthy of study. For example, in 2004, the focus was on expanding consumer demand, while investment demand could not be expanded, but instead, it needed to be restricted, because since 2003, the total investment in China had already overheated.

　　In China, industrial policies are often used as an important policy for macro-control. This is a rather complex issue and a subject of much controversy in the field of economics. In the past, due to the fact that government policies and measures for industrial development have not worked effectively in practice, and that industries encouraged by the government often failed to develop, while restricted industries flourished, many people have doubted the effectiveness of industrial policies. Considering that China has a strong state-owned economy and state-owned assets exceeding the annual GDP, the government’s economic functions have been strong, and the government often uses industrial policies to adjust the industrial structure. Therefore, in addition to mainly using fiscal and monetary policies for macro-control, industrial policies can also be used to improve the industrial structure, strengthen weak links, and constrain excessive expansion of certain industries. As for whether the government’s industrial policies are effective, it mainly depends on whether the formulation of policies conforms to the laws of the market economy, conforms to the country’s long-term development strategy, and is conducive to the stable and rapid development of the national economy.

　　Fourthly, scientifically evaluating the effectiveness of market economic activities ensures the sustainable development of the socialist market economy.

　　China’s socialist market economy is a government-led market economy, where the government plays an important role. The difficulty in scientifically evaluating the effectiveness of market economic activities does not lie with enterprises but with the government, especially in evaluating the performance of local governments and their officials.

　　In the past, people generally used GDP and its growth rate as the main criteria for evaluating government performance, engaging in annual rankings and evaluations. A higher GDP growth rate meant better performance, while a lower growth rate meant poor performance. As a result, local governments competed with each other, striving for rapid GDP growth and all wanting to be number one, with one wanting to be faster than the other. Therefore, people described these local governments as ‘GDP governments.’ However, many years of practice, especially in recent years, have shown that this approach has many problems.

　　Firstly, using GDP growth rate as the sole or main indicator for evaluating the performance of the government inevitably ignores the development of various social undertakings, leading to an uncoordinated situation where economic development is strong while social development is weak. Deng Xiaoping said, ‘Development is the hard truth.’ However, development includes not only economic development but also social development, such as the development of science and technology, education, environmental protection, culture, medical care, public health, fitness, tourism, leisure, and entertainment. The purpose of development is to improve the living standards and quality of people’s lives, and ultimately achieve the comprehensive development of individuals. This requires both economic development to increase social wealth and the development of various social undertakings to provide people with the conditions to receive good education, medical care, and health care, as well as a beautiful living environment and a rich and colorful cultural life. The report of the 16th National Congress of the Communist Party of China proposes, ‘In the first two decades of this century, we will concentrate our efforts on building a moderately prosperous society that benefits more than one billion people with higher standards, making the economy more developed, democracy more sound, science and education more advanced, culture more prosperous, society more harmonious, and people’s lives more prosperous.’ To achieve this, it is not enough to rely on economic development and GDP growth; there must also be the development of social undertakings. Therefore, when evaluating the performance of a local government, one cannot simply look at GDP growth.

　　Second, using GDP growth rate as the sole or the most important indicator to evaluate the government’s performance will also encourage short-term behavior of the government, affecting the sustainable development of the economy. Because economic growth, the growth of GDP, can adopt the method of ‘a faster flow of water’, that is, to use extensive expansion in form, consume a large amount of resources and energy, destroy the ecological environment, and achieve rapid growth in a short period of time. For a country like ours, which has relatively insufficient resources, a fragile ecological environment, and severe environmental pollution, this is obviously not advisable and difficult to sustain. The report of the 16th National Congress of the Communist Party of China proposed that our country should follow a new path of industrialization, that is, ‘to find a new path of industrialization with high scientific and technological content, good economic benefits, low resource consumption, less environmental pollution, and full play of human resources advantages.’ It is reported that over the past 50 years and more since the founding of the People’s Republic of China, our country’s GDP has increased by more than 10 times, and the consumption of mineral resources has increased by more than 40 times. Last year, the domestic and imported resources consumed in our country were approximately 5 billion tons, and the consumption of crude oil, coal, iron ore, steel, alumina, and cement were respectively about 7.4%, 31%, 30%, 27%, 25%, and 40% of the world’s consumption, while the GDP created was only equivalent to 4% of the world total. It is evident that for our country, it is urgent to transform the way of economic growth and follow the path of new industrialization. When evaluating the economic development of a region, one cannot only look at GDP growth but also at the costs paid for the growth of GDP. Recently, some scholars have suggested using green GDP as an indicator to evaluate economic development, that is, to deduct the cost of nature and the environment paid for the GDP growth (for example, in 1973, the Japanese government stipulated allowable standards for air, water, garbage, and other environmental pollution. If the standards are exceeded, the cost of improvement must be deducted from the GDP. According to this method, the economic growth rate of Japan that year was no longer 8.5% but 5.8%). This is worthy of our attention and further research.

　　Third, using GDP growth rate as the sole or the most important indicator to evaluate the government’s performance will also encourage some government officials to fabricate data. In the past, the saying ‘officials produce numbers, numbers produce officials’ mainly referred to officials fabricating GDP figures, exaggerating their achievements, and then deceiving their way to promotion. Some local officials do not base their reports on actual figures but first enquire about the GDP figures of surrounding areas, then instruct the statistical departments to report higher GDP growth rates than other areas to show that their performance is superior. Generally, it is difficult for the general public to supervise the falsification of GDP figures.

　　In order to ensure the sustainable development of socialist market economy in our country, it is necessary to formulate a scientific evaluation system. For the whole country or a region, the first step is to gradually change the single indicator of GDP growth into multi-dimensional indicators, such as the four aspects of society, environment, economy, and system proposed by the United Nations Sustainable Development Committee. We can learn from this. Secondly, the GDP indicator should be gradually developed into a green GDP indicator. Moreover, strengthening the verification of statistical data, severely investigating and dealing with those who commit fraud, and enhancing the transparency and accuracy of statistical information. It is evident that finding the correct evaluation index system for the effects of socialist market economy activities is of great significance for the sustainable development of socialist market economy.

　　Fifth, govern market economy activities according to law to ensure the healthy operation of the market economy

　　Modern market economy is a rule-of-law economy, and socialist market economy is also a rule-of-law economy. The practice of market economies in China and abroad has proven that market economy can only effectively play its positive role and reduce the negative effects brought about by its spontaneous regulation when operating on the track of rule of law. Market economy is a competitive economy, and fair competition should be practiced to improve efficiency. This requires the regulation of how to compete and the formation of effective competition rules or game rules. It is evident that socialist market economy can only ensure its healthy development when operating on the track of rule of law.

　　In 1997, the 15th National Congress of the Communist Party of China determined the strategy of governing the country according to law. This was a major transformation from rule by man to rule by law in our country. In response, the 16th National Congress of the Communist Party of China proposed that in order to adapt to the new situation of the development of socialist market economy, comprehensive progress of society, and joining the World Trade Organization, we should strengthen legislative work, improve the quality of legislation, and form a legal system with Chinese characteristics by 2010. This legal system should meet the requirements of the laws of the market economy and serve to consolidate the economic foundation of socialist market economy. The Third Plenary Session of the 16th Central Committee of the Communist Party of China further proposed to comprehensively promote the construction of economic law, that is, to establish systems, standardize rights and responsibilities, protect rights and interests, and strengthen economic legislation in accordance with the basic strategy of governing the country according to law. It mainly includes: improving the legal system of market entities and intermediary organizations, so that various market entities truly have complete behavioral and responsible capabilities. Improving the legal system of property rights, standardizing and rationalizing property rights relations, and protecting the rights and interests of various property rights. Improving the legal system of market transactions, ensuring the freedom of contracts and the safety of transactions, and maintaining fair competition. Improving the laws and regulations of budget, taxation, finance, and investment, and regulating economic regulation and market supervision. Improving the laws and regulations of labor, employment, social security, and other aspects, and effectively protecting the legitimate rights and interests of workers and citizens. Improving the laws and regulations in the social field and sustainable development, and promoting economic development and comprehensive progress of society.

　　According to the requirements of the rule of law in the economy, on the one hand, the main body of microeconomic behavior, mainly enterprises, should operate in accordance with the law, pay taxes according to regulations, and handle internal relationships of enterprises in accordance with the law, especially to protect the legitimate rights and interests of employees, and comply with environmental protection, safety, and contract laws and regulations. At the same time, it is required to protect the independence and various rights and interests of enterprises as market entities, and protect the property rights of corporate legal persons, etc. On the other hand, it is required that the government be a rule-of-law government. The government should manage enterprises, social organizations, and individuals in accordance with the law and cannot issue orders arbitrarilylottery help and The latest plan. The Outline for Comprehensively Advancing the Implementation of the Rule of Law in Administration, issued by the State Council at the beginning of 2004, proposes that China will achieve the goal of building a rule-of-law government through relentless efforts over about ten years, mainly including seven aspects. First, achieve the separation of government and enterprise. Second, propose legal bills and local regulations drafts. Third, laws, regulations, and rules are implemented comprehensively and correctly. Fourth, a scientific, democratic, and standardized administrative decision-making mechanism and system are basically formed. Fifth, an efficient, convenient, and cost-effective mechanism for preventing and resolving social contradictions is formed. Sixth, administrative power and responsibility are closely linked, and completely disconnected from the interests of the main body of administrative power. Seventh, improve the legal quality of administrative officials, especially leading cadres at all levels. It is evident that in the future, the government’s management and intervention in the economy must be conducted in accordance with the law and can no longer rely mainly on administrative means and issuing orders as in the past planned economy period. Since the separation of government and enterprise, the government’s economic regulation will mainly use economic means and legal means, implement appropriate fiscal and monetary policies, and use interest rates, tax rates, exchange rates, and other economic levers.

　　In the socialist market economy, it is very important to correctly define the relationship between policy, market, and enterprise. Generally speaking, the government should not interfere if something can be resolved efficiently through the market. The government should also not interfere in matters that citizens, enterprises, social organizations, including intermediary organizations, can autonomously and effectively resolve, except where otherwise stipulated by law. The government mainly engages in public management. When the government uses the money paid by taxpayers, it should be thrifty, efficient, and honest. Government officials should understand that not only is power given by the people, but the government’s income also comes from the people, and it should be used for the people. Some officials have proposed that the government should give more to the people than it takes from them, which is impossible. The government’s money all comes from taxpayers, and it is already a good thing if the money can be used for the people. The government is not the main body of wealth creation, and it is enough for the government to consume less and do more to serve the people. All of these should be determined by laws and regulations and become the consensus and behavioral criteria for everyone.

　　In addition, fair law enforcement is necessary. It is not enough to have no laws, and it is not enough to have laws but not follow them. It is also not enough to enforce laws leniently and unfairly. If law enforcement is not fair, even the best laws are not very useful, and the socialist market economy cannot run on the track of the rule of law. Therefore, it is necessary to form a good concept of the rule of law and a sense of law-abiding throughout society, and to form a good judicial environment. In this regard, in addition to publicity and education, government leaders should take the lead in law enforcement, strictly enforce the law, and truly achieve equality before the law, where no one can be above the law.

　　With the continuous development of social economy, prices will fluctuate accordingly. The rise and fall of prices not only affects the purchasing power of money but also has a significant impact on the entire economic and social environment. In the economic cycle, if prices continue to rise, this trend is called price spiral rise. This situation usually leads to a decrease in the supply of goods, a decline in consumer purchasing power, a weakening of economic demand, and the whole economic vitality follows suit.

　　Price spiral rise usually has the following characteristics: first, the supply of goods in the market decreases while demand increases. Second, the costs of production and transportation rise. Third, the cost of labor rises. Fourth, the inflation rate increases. As prices rise, these characteristics interact with each other, forming a vicious cycle.

　　The impact of price spiral rise on the entire economy is significant, and some countries will take measures to mitigate this situation. Measures such as reducing tariffs, increasing the supply of goods, encouraging production and economic activities, controlling the issuance of currency, and controlling inflation are all measures that can reduce price spiral rise. Governments, enterprises, and individuals should work together and collaborate to deal with the economic and social impacts brought about by price spiral rise.

　　Regarding the impact of wage increases on the rise in prices: “Although wages and other costs will catch up with the rise in prices, but (based on the above assumptions) prices will always rise continuously by 20%. No matter how much wages are increased, the actions spent on these wages will always push prices ahead by a lot.” ① Here, wages refer to nominal monetary wages, and the price level refers to the market consumer price level. The inflation process will make wages catch up with the rise in the price level, and this catch-up itself will actually promote further rises in prices. In this process, “the real wages are reduced due to the lagging adjustment of monetary wages” ②. Therefore, inflation is always a process of income redistribution. It “acts like a pump, transferring income from wage earners with low savings propensity and low marginal tax rates to entrepreneurs with higher savings propensity and higher marginal tax rates” ③. It is clear that the process of “wage-price spiral rise” is essentially a process of income (or interest) redistribution, a process of loss of laborers’ interests and gains for entrepreneurs.

　　Hope it is helpful to you