Early this month, China's top political advisory body met in the capital city Beijing to deliberate on the country’s goal of building a high-level socialist market economy system. The meeting also discussed on achieving the great rejuvenation of the Chinese nation on all fronts through Chinese modernisation.
China's high-level socialist market economy is a distinctive economic framework that combines the strengths of socialism with the dynamism of market mechanisms. This approach aims to harness the efficiency and innovation of market forces while ensuring that economic development aligns with the country's socialist goals and values.
It seeks to achieve sustainable and inclusive growth by strategically guiding economic development, promoting innovation, integrating globally, and ensuring social equity and environmental sustainability. This system has been evolving since the late 20th century and continues to develop in the 21st century.
One of the system’s salient features of this unique system is State-Owned Enterprises (SOEs) and market economy. The Chinese government maintains significant control over key industries through SOEs. However, it also allows private enterprises and foreign investments to operate, creating a mixed economy where market forces influence business decisions alongside state planning.
Secondly, China implements comprehensive economic plans, called Five-Year Plans, which outline the country's strategic economic and social development goals. These plans reflect the government's commitment to guiding the economy's direction, while allowing market mechanisms to function within this framework. The government is committed to offering strategic guidance of national development plans and strengthening coordination between fiscal and monetary policies, so as to promote sustained and sound economic development.
The high-level socialist market economy also emphasises technological innovation and the advancement of high-tech industries. China aims to become a global leader in fields such as artificial intelligence, 5G and renewable energy through substantial government investments and incentives for private sector innovation.
Recently, China has focused on achieving "common prosperity", aiming to reduce income inequality and ensure more equitable distribution of wealth. This involves policies targeting poverty reduction, rural development and social welfare improvements.
China also actively participates in the global economy through trade, investment and infrastructure projects like the Belt and Road Initiative (BRI). The BRI aims to enhance connectivity and economic cooperation across Asia, Europe and Africa, reinforcing China's role in global economic governance.
The high-level socialist market economy also prioritises environmental sustainability. China has committed to ambitious goals for carbon neutrality and reducing pollution, integrating green technologies and sustainable practices into its economic development strategies.
Reforms in the financial sector are ongoing to balance control with market liberalisation. Efforts include improving regulatory frameworks, enhancing the role of the Chinese national currency Yuan in international markets, and encouraging investment in a more open financial environment.
Maintaining social and economic stability is a core objective, and is key in building a high-level socialist market economy system. The Chinese government enforces strict regulations and policies to prevent economic bubbles, control inflation, and manage social unrest, ensuring a stable environment for growth.
China's high-level socialist market economy represents a dynamic and adaptive approach, seeking to leverage the efficiency and innovation of the market, while ensuring that economic growth aligns with the country's broader social and political goals. This model has contributed to China's rapid economic growth and its emergence as a major global economic power.
Some of the major topics canvassed during the Beijing meeting this month included the transformation and upgrading of traditional manufacturing industries, the construction of water conservancy infrastructure for better production capacity in agriculture, and green and low-carbon transformation of industries. Initiatives to support the expansion of state-owned businesses and capital, as well as to create a stable climate and more chances for the private sector were also major issues discussed.
In addition, the leaders and technocrats agreed that accelerating the creation of a single national market is crucial, as is strengthening the core elements of market economic systems including the protection of property rights, market accessibility, equitable competition, social credit, and creating a system of high standards for the market.
The meeting promised to exert more effort in conforming to international trade and economic norms of the highest calibre, gradually increase institutional opening up, and cultivate fresh benefits in international economic rivalry and collaboration.
Stephen Ndegwa is the Executive Director of South-South Dialogues, a Nairobi-based communications development think tank, and a PhD student at the United States International University-Africa