Source: Economic Information Daily

The report Xi Jinping delivered to the 19th National Congress of the CPC not only made developing a modernized economy a strategic goal for China’s development, but also systematically illustrated the ways to develop a modernized economy in six aspects.

Before mentioning developing a modernized economy, the report used the key phrase “applying a new vision of development”. That is, developing a modernized economy is deployed after the new vision of development is applied.

First, developing a modernized economy is deployed under the background that socialism with Chinese characteristics has entered a new era. Just as the report delivered at the 19th National Congress of the CPC said, the “new era” is a new historic juncture in China’s development. Since it’s a new historic juncture rather than an old one, we need to develop a modernized economy according to the requirements of the new era.

Second, the report pointed out that the principal contradiction facing Chinese society has evolved, and what we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. Since the contradiction is new, it represents a historic shift that affects the whole landscape. When developing a modernized economy, we need to focus on solving the problem about unbalanced and inadequate development, rather than the problem about scale and speed.

Third, we will develop a modernized economy as economic development enters a new normal. The principal problem facing the new normal is the sluggish circulation resulting from major structural imbalances, rather than the problem about total quantities and cycles amid the old normal of economic development. How should we develop a modernized economy under such a background? The answer is to focus on the structure instead of the scale. That is, we need to advance restructuring through reforms, rather than solve economic problems by expanding demand or other means based on total quantities.

Fourth, the new vision of development highlights quality and benefits other than speed or scale. As China’s economy moves from a stage of fast growth to one featuring high-quality growth, how to improve the quality of economic development at a higher level is also part of efforts to develop a modernized economy.

Fifth, the report said that since the 18th CPC National Congress, we have developed a new set of policy frameworks with the new vision of development as our guidance and the supply-side structural reform as our main task. We recognize that the theme of the macroeconomic policies is the supply-side structural reform, rather than the demand management policies; we also realize that to implement the policies, we need to drive restructuring through reforms, rather than do that through policy arrangement or be contented with advancing restructuring at the policy level.

Sixth, we will develop a modernized economy under the background of comprehensively deepening the reform, one important goal of which is to modernize China’s system and capacity for governance. The goal is different from the reform goal confined to the economic level; to realize the goal, we will not only solve the economic problem, but also meet the growing demands of the people for democracy, rule of law, fairness and justice, security, and a better environment.

It’s crucial to develop a modernized economy using the way of thinking based on comparison. That is a possible choice for us to develop a modernized economy with a new vision of development, as well as a beneficial way of thinking. Our conclusion is that to develop a modernized economy, we need to uphold the new vision of development.

(The author is the Director of the Institute of Economics, CASS and a member of the Academic Committee of Shanghai Academy)