Deeply understand the new connotation of the basic socialist economic system

　　The Fourth Plenary Session of the 19th CPC Central Committee adopted "the Central Committee of the Communist Party of China’s Decision on Upholding and Perfecting the Socialism with Chinese characteristics System, Promoting the Modernization of the National Governance System and Governance Capacity" (hereinafter referred to as the "Decision"), which pointed out the remarkable advantages of China’s national system and national governance system from thirteen aspects, including "adhering to public ownership as the main body, the common development of multiple ownership economies and distribution according to work as the main body, and the coexistence of multiple modes of distribution, organically combining the socialist system with the market economy, and constantly liberating and developing society. Since it is a "significant advantage" that has been proved effective by long-term practice, it must be adhered to and improved in practice. To this end, the "Decision" puts forward thirteen "persistence and perfection", one of which is "persistence and perfection of the basic socialist economic system and promotion of high-quality economic development". The Decision holds that "the basic socialist economic system, such as public ownership as the mainstay, the common development of various ownership economies, the coexistence of distribution according to work as the mainstay and various modes of distribution, and the socialist market economic system, not only embodies the superiority of the socialist system, but also adapts to the development level of social productive forces in the primary stage of socialism in China". It can be seen that the basic connotation of the socialist basic economic system includes at least three aspects, namely ownership, distribution and economic system. In terms of ownership,The basic economic system refers to the common development of multiple ownership economies with public ownership as the main body; In terms of distribution, the basic economic system means that distribution according to work is the main body and various distribution methods coexist; In the economic system, the basic economic system refers to the socialist market economic system. This most comprehensive and accurate definition and generalization of the socialist basic economic system so far is a major breakthrough and innovation in understanding the connotation of the socialist basic economic system, which not only conforms to the basic principles of Marxist political economy in theory, but also conforms to the history and reality of Socialism with Chinese characteristics’s economic development path in practice.

　　For a long time, China’s understanding of the basic economic system in theory and policy is limited to ownership, that is, "public ownership is the main body and multiple ownership economies develop together". Although we attach great importance to distribution and economic operation system in reality, we have never raised these two aspects to the level of basic economic system for understanding. After long-term exploration, the "Decision" integrates the three into the basic economic system in parallel and summarizes the "trinity", which makes the connotation of the socialist basic economic system more comprehensive and accurate, and will certainly help the remarkable advantages of the socialist basic economic system to be continuously carried forward in practice.

　　Adhere to public ownership as the main body and the common development of diversified ownership economies.

　　Public ownership is the main body. After the founding of People’s Republic of China (PRC) in 1949, it was faced with a severe economic situation, and speeding up economic construction and social development was bound to become a historical choice. Judging from the situation at that time, a relatively complete national economic system can be established in a relatively short period of time only by pooling the superior resources of the whole country and concentrating on major events. According to the basic viewpoint of historical materialism, relations of production must adapt to the development of productive forces. However, the capitalist relations of production cannot realize the socialization of production, so it is necessary to reform the relations of production. Under the leadership of the Communist Party of China, after the new-democratic revolution and socialist transformation, China has established an economic structure with public ownership as the main body. The essence of public ownership economy is that the means of production are jointly owned by laborers, thus promoting the rapid, coordinated and sustainable development of social production. From the historical and practical experience, to give full play to the main role of the public sector of the economy, we need to work hard in both "quantity" and "quality".

　　In terms of "quantity", we should keep public assets dominant. The assets of public-owned enterprises are significant, which is conducive to alleviating the impact of the economic crisis on the macro economy and ironing out the impact of macroeconomic fluctuations on the development of the national economy. In different economic cycles, the public-owned economy can adjust and control the national economy by virtue of its own scale advantage. During the economic downturn, the public-owned economy can implement mergers and acquisitions according to specific conditions, maintain the stability of social employment level, avoid social panic caused by the bankruptcy of enterprises, and delay the trend of rapid economic decline; During the economic depression, the state can maintain the low-speed economic growth by guiding the layout of the public sector of the economy in various industries, and at the same time optimize the industrial structure, prepare for the overall economic recovery; In the period of economic upswing, the public sector of the economy can tilt to key areas and promote the priority development of related industries. The continuous accumulation of public assets has promoted the stable development of the national economy. In 1987, the proportion of public-owned assets in the national industrial assets was 98.86%; By 2016, this indicator has been reduced to 58.34%. However, compared with other economic ownership assets, public ownership assets still have absolute advantages.

　　In terms of "quality", it is necessary to continuously strengthen the control of the public ownership economy, especially the state-owned economy, over public goods, infrastructure, national security, economic lifeline and other fields. In economic theory, public goods and infrastructure are non-competitive and non-exclusive, which makes it difficult for investors to enjoy exclusive rights and can’t accurately calculate investment income and lack economic incentives for investment. Investing in public goods and infrastructure and occupying the commanding heights in the economic field have become the unshirkable mission and responsibility of the state-owned economy. The concentration of state-owned economy in key areas will help to strengthen the synergy between industries and enterprises. By strengthening cooperation between upstream and downstream, we will give full play to their respective professional advantages and promote the integration of innovative resources. In addition, the spillover effect caused by the steady and rapid development of the state-owned economy can promote the economic growth of the surrounding areas, promote the employment of the social working population, and make transfer payments by providing energy infrastructure and public service facilities for residents’ daily consumption at low prices and organizing various public welfare activities, which makes up for the shortcomings of local governments in distribution work to some extent. To give full play to the leading role of the state-owned economy, it is also necessary to focus on invigorating the state-owned economy as a whole rather than individuals, focusing on making state-owned capital stronger rather than state-owned assets, and speeding up the layout optimization and structural adjustment of the state-owned economy, which is also an important link in deepening the economic system reform at present.

　　Promote and guide the healthy development of the non-public economy. In the primary stage of socialism, the development of public ownership economy is inseparable from the supporting role of non-public ownership economy, and both have their own strengths and complement each other. After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China, China began to adjust the ownership structure and gradually resumed the development of the non-public economy. The Twelfth National Congress of the Communist Party of China further clarified "the issue of upholding the leading position of the state-owned economy and developing various economic forms", and the non-public economy ushered in an opportunity for development. The Constitution of People’s Republic of China (PRC), adopted at the Fifth Session of the Fifth National People’s Congress, stipulates that "the individual economy of urban and rural workers within the scope prescribed by law is a supplement to the socialist public ownership economy". The 13th National Congress of the Communist Party of China put forward that "we should continue to develop diversified ownership economy with public ownership as the main body". The 15th National Congress of the Communist Party of China put forward that "the non-public economy is an important part of China’s socialist market economy". At the second session of the Ninth National People’s Congress, "the state adheres to the basic economic system with public ownership as the main body and multiple ownership economies developing together" in the primary stage of socialism. In February 2005, the State Council issued "Several Opinions on Encouraging, Supporting and Guiding the Development of Non-public Economy, such as Individual Private Economy" to create a favorable institutional environment for the non-public economy, and in May 2010, it issued "New 36 Articles on Non-public Economy" again.After more than 40 years of development, the vitality of the non-public sector of the economy has been significantly enhanced and has become an important part of socialist economic construction. Therefore, the "Decision" clearly stated that "we will unswervingly consolidate and develop the public sector of the economy and unswervingly encourage, support and guide the development of the non-public sector of the economy". According to the data of the National Bureau of Statistics, in 2001, there were 32,000 private industrial enterprises above designated size, accounting for 18.9% of all industrial enterprises above designated size, and the total assets, main business income and total profits accounted for 3.9%, 7.7% and 6.0% of industrial enterprises above designated size respectively. In 2018, the number of private enterprises in industrial enterprises above designated size has exceeded 50%, and the total assets, main business income and total profits all accounted for more than 20%. For a long time, there has been a popular saying "56789", that is, the private economy has contributed more than 50% of tax revenue, more than 60% of GDP, more than 70% of technological innovations, more than 80% of urban employment and more than 90% of enterprises in China. These data fully show that the private economy has become an important driving force for China’s economic and social development.

　　For the understanding of non-public ownership economy, we should not only affirm the beneficial side to the development of productive forces, but also face up to the potential unstable factors. The means of production of the non-public economy are owned by individuals, and the main goal is to pursue the maximization of personal interests, which also determines that it has certain blindness and randomness in production activities, pays more attention to short-term returns, lacks consideration of social structural interests, and sometimes even deviates from social development. Even for internationally renowned multinational companies, scandals such as "quality gate", "bribery gate" and "cheating gate" continue, which reflects the lack of business ethics and social responsibility of enterprises. Therefore, on the one hand, the government should continuously optimize the development environment and service system of the non-public economy and break down the institutional and institutional obstacles that restrict development; On the other hand, it is also necessary to promote and guide the healthy development of the non-public economy by improving relevant laws, regulations and policies, strengthen industry self-discipline, and make the public economy and the non-public economy work together to better serve the overall situation of national economic and social development.

　　Vigorously develop the mixed ownership economy. Since various forms of ownership coexist, different economic sectors should voluntarily implement various forms of union. The concept of "mixed ownership" was first put forward at the 15th National Congress of the Communist Party of China, which is not only a mixed ownership in the sense of coexistence of various forms of ownership within the society, but also a situation in which different ownership capitals jointly hold the same enterprise at the enterprise level. Mixed ownership is an important form of public ownership and even the basic economic system, which helps to enhance the vitality, control, influence and risk resistance of the state-owned economy as a whole. Formally, mixed ownership is not only the diversification of ownership structure, but also the continuous improvement of corporate governance mechanism, the establishment of a modern enterprise system with clear property rights, clear rights and responsibilities, separation of government and enterprises, and scientific management, as well as a modern property rights system with clear ownership, clear rights and responsibilities, strict protection and smooth circulation, so as to effectively stimulate the viability and dynamic ability of enterprises. As the main form of public ownership economy, state-owned enterprises have been at the forefront of mixed ownership reform. The Third Plenary Session of the 18th CPC Central Committee put forward that "the mixed ownership economy with cross-shareholding and mutual integration of state-owned capital, collective capital and non-public capital is an important realization form of the basic economic system, which is conducive to the amplification function of state-owned capital, the preservation and appreciation of value, the improvement of competitiveness, and the complementarity, mutual promotion and common development of various ownership capitals". The 19 th National Congress of the Communist Party of China proposed, "Deepen the reform of state-owned enterprises, develop a mixed-ownership economy, and cultivate world-class enterprises with global competitiveness. " According to the reform plan of the Third Plenary Session of the 18th CPC Central Committee, in 2014, the State-owned Assets Supervision and Administration Commission of the State Council launched a pilot project of "mixed reform". Since 2016, about 210 state-owned enterprises have entered the pilot scope. Overall, the "mixed reform" has made positive progress and remarkable results.

　　Adhere to distribution according to work as the main body and coexistence of various distribution methods.

　　Marx pointed out: "The so-called distribution relationship is in line with the special social form stipulated by the history of the production process and the relationship between people in the reproduction process of their lives, and it is produced by these forms and relationships … … The distribution relationship only represents one aspect of the production relationship. " In fact, any distribution relationship can only be adapted to a certain mode of production and production relationship, which requires the implementation of a distribution system suitable for the primary stage of socialism. The core proposition of the distribution system is fair distribution, including fairness of rights, fairness of rules and fairness of opportunities. The basic economic system with distribution according to work as the main body and various modes of distribution coexisting has played a positive role in increasing residents’ income, narrowing the income gap and avoiding polarization.

　　Since the founding of New China 70 years ago, residents’ income has maintained rapid growth, and people’s life has achieved a historic leap from insufficient food and clothing to a well-off society in an all-round way. In 1949, the per capita disposable income of Chinese residents was only 49.7 yuan. In 2018, the per capita disposable income reached 28,228 yuan, a nominal increase of 566.6 times, a real increase of 59.2 times after deducting the price factor, and an average annual real increase of 6.1%. While the income of urban and rural residents has increased substantially, the income sources of urban and rural residents have also changed from single to multiple, and the income distribution pattern has improved significantly. The wage income of urban residents no longer occupies the absolute main body, and the proportion of management, property and transfer income increases. According to the National Bureau of Statistics, the per capita wage income of urban residents accounted for 60.6% of the per capita disposable income in 2018, down 30.3 percentage points from 1964; In 2018, the proportion of per capita net operating income of urban residents was 11.3%, an increase of 8.4 percentage points over 1964; In 2018, the per capita net income of urban residents was 10.3%, an increase of 9.8 percentage points over 1985; In 2018, the per capita transfer net income of urban residents accounted for 17.8%, an increase of 13.3 percentage points over 1964. At the same time, the gap between urban and rural residents’ income has narrowed significantly. Especially since the 18th National Congress of the Communist Party of China, the incidence of rural poverty has dropped from 10.2% at the end of 2012 to 1.7% at the end of 2018, effectively avoiding the polarization in distribution.The problem of absolute poverty for thousands of years is expected to be solved historically and has made outstanding contributions to poverty reduction in the world. In contrast, both income inequality and wealth distribution inequality have not been well solved under the capitalist distribution system based on capital distribution, and as a result, the stubborn disease of economic crisis can never be avoided. According to the conclusion of the empirical study by Picchetti, a famous French economist, the inequality of distribution in capitalist countries such as Europe and America is not only reflected in the inequality of labor income in Europe and America, but also in the high inequality of wealth distribution and capital income in various countries, and the inequality of wealth and capital income is much higher than that of labor income.

　　Constantly improve the socialist market economic system

　　In the economic operation mechanism, the embodiment of the socialist basic economic system is to realize the socialist market economic system. The core issue of economic system reform is to deal with the relationship between government and market. First of all, give play to the decisive role of the market in the allocation of resources and give better play to the role of the government. Because the market determines the allocation of resources is the general law of market economy, and the basic elements of the market are the trinity mechanism of supply and demand, price and competition, and the competition mechanism regulates the formation of supply and demand equilibrium and balanced price. Marx believes that intra-departmental competition can realize the survival of the fittest, and inter-departmental competition can promote the average and declining trend of industry profits. According to the outcome fairness theorem, under the condition that people’s ideological realm is limited and individuals seek profits, as long as everyone’s initial endowment value is equal, through the operation of competitive market, it can lead to efficient and fair resource allocation results. It is precisely because competition is the only way to achieve prosperity that China, after establishing the decisive role of the market, put forward to play the basic role of competition. Therefore, we must actively and steadily promote market-oriented reform in breadth and depth, greatly reduce the direct allocation of resources by the government, and promote the allocation of resources to maximize benefits and optimize efficiency according to market rules, market prices and market competition. The decisive role of the market and the basic role of competition do not exclude the positive role of the government, so it is necessary to give full play to the role of the government.The responsibilities and functions of the government are mainly to maintain macroeconomic stability, strengthen and optimize public services, ensure fair competition, strengthen market supervision, maintain market order, promote sustainable development, promote common prosperity and make up for market failures.

　　To perfect the socialist market economic system is to build an economic system with "effective market mechanism, dynamic micro-subjects and moderate macro-control". Therefore, it is necessary to comprehensively deepen the reform, speed up the improvement of the modern market system, establish fair, open and transparent market rules, improve the mechanism that prices are mainly determined by the market, establish a unified urban and rural construction land market, improve the financial market system and deepen the reform of the scientific and technological system. At the same time, we must effectively transform government functions, deepen the reform of administrative system, innovate administrative management methods, enhance government credibility and execution, and build a government ruled by law and a service-oriented government.

　　Reflect the advantages of the socialist basic economic system in the all-round opening up

　　The advantages of any economic system are not complacent, but are reflected by the advantages of dynamic core competence. In the international financial crisis since 2008, private-owned large-scale enterprises are often vulnerable, even General Motors has encountered the embarrassing situation of "too big to fail", and finally it was saved from bankruptcy by the temporary nationalization measures of the federal government. In this financial crisis, China’s economy has withstood a great test and won a worldwide reputation. Therefore, no matter what kind of ownership enterprises, they must build their own competitive advantages in "going out" and "please come in". Since the reform and opening up, especially after China joined the WTO in 2001, China’s economy has entered a "golden growth period", and in 2010 it began to become the second largest economy in the world, among which the contribution of opening to the outside world is indispensable. To this end, the "Decision" puts forward "building a new open economic system with a higher level", which puts higher requirements on the realization mechanism of China’s basic economic system. Therefore, on the one hand, it is necessary to open wider to the outside world, implement a high-level policy of trade and investment liberalization and facilitation, comprehensively implement the system of national treatment plus negative list management before entry, greatly relax market access, and expand the opening up of service industry. In June 2018, the National Development and Reform Commission and the Ministry of Commerce issued the Special Management Measures for Foreign Investment Access (Negative List)(2018 Edition), opening measures were introduced in 22 areas, and the number of restrictive measures was reduced to 48, a decrease of nearly one quarter; In June 2019, the Special Management Measures for Foreign Investment Access (Negative List) (2019 Edition) was released. On the basis of keeping the original framework unchanged, the list length was further shortened, management measures were reduced, and the list structure was optimized, basically forming an open pattern of the whole industry. On the other hand, it is necessary to continue to open to the outside world, especially in traditional monopoly industries, where the phenomenon of state-owned sole proprietorship and absolute holding is relatively common, and the non-public economy has great institutional barriers and hidden obstacles in market entry, so it is difficult to truly realize equality of rights, opportunities and rules in market competition. This requires "carrying out the reform and opening up to the end", continuing to deepen the reform of state-owned enterprises, especially those in monopoly industries, and striving for breakthroughs in such important aspects as de-administration, de-monopoly, de-sole proprietorship and de-rigidity of state-owned enterprises.

　　In a word, it is the remarkable advantages of the socialist basic economic system that have generally supported and promoted the sustained and rapid economic growth of China for 70 years. Especially since the reform and opening up, China’s economy has been catching up all the way, and it has been praised as "China Miracle" and "China Speed" by the international community. In 2018, China’s GDP increased by 174 times compared with 1952, with an average annual growth rate of 8.1%; Among them, 1979— In 2018, the average annual growth rate was 9.4%, much higher than the average annual growth rate of the world economy of around 2.9% in the same period. In 2018, China’s per capita gross national income reached 9,732 US dollars, higher than the average level of middle-income countries. It can be predicted that, under the background that the world economy is generally depressed, with the continuous improvement of the socialist basic economic system, it is optimistically estimated that by 2025 and conservatively estimated that by 2030, China’s total economic output will surpass that of the United States and rank first in the world. At the same time, it is expected to achieve major structural changes that have lasted for a long time and are difficult to achieve in most countries, and it is also expected to successfully cross the "middle income trap" that has long plagued most countries.

　　(Author: Qi Yudong, dean, professor and doctoral supervisor of School of Economics and Business Administration, Beijing Normal University)