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The Decision on Major Issues Concerning Comprehensively Deepening Reforms in brief

0 Comment(s)Print E-mail China Daily, November 16, 2013
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The Decision on Major Issues Concerning Comprehensively Deepening Reforms was adopted at the close of the Third Plenary Session of the 18th CPC Central Committee on Tuesday. The following is an abridged version of the full text of the document:

I—Significance and principles

1. Reform and opening-up has been a crucial choice that China has made regarding its destiny in modern times. But there can never be an end to the need for the emancipation of individual thought or for continuing reform and opening-up. China must deepen its all-round reform with a new starting point.

2. China must stick to the socialist market economy as the orientation of its reform, must promote social fairness and justice and must seek to advance the well-being of the people. The general purpose of deepening its all-round reform is to develop socialism with Chinese characteristics, to advance modernization in the State governance system and governance capability. The basic economic system should evolve on the decisive role of the market in resource allocation. Political reform must evolve around the leadership of the Communist Party of China and advance the institutionalization of socialist democracy. Cultural reform must evolve around the socialist core value system. Social reform must evolve around the protection and improvement of the people's livelihood and advance fairness and justice. The development of an eco-conscious civilization must evolve around the building of a beautiful China. The reform of Party building must evolve on the effort to raise the level of governance to be scientific, democratic and according to the law.

3. The reform of the economic system is the focus of all the efforts to deepen the all-round reform.

4. The successful experience of the past reform and opening-up must be built upon. Decisive results are to be obtained in key areas in 2020.

II—Basic economic system

China's economic system is one with public ownership serving as its main body but allowing for the development of all types of ownership. Both public and non-public ownership are key components of China's socialist market economy.

5. Complete the property rights protection system. Property rights are the key factor of ownership. The property rights of the public economy are inviolable, as are the property rights of the non-public economy. The government protects the property rights and legitimate interests of all kinds of ownership by ensuring that various ownerships have equal access to production factors, open and fair market competition and the same legal protection and supervision.

6. Actively develop a diversified ownership economy. Diversified ownership integrated by State capital, collective capital and private capital is the prime method for materializing the basic economic system, helping improve functions, increase value and promote the competitiveness of State capital. Allow more State-owned enterprises and other ownership enterprises to develop into mixed-ownership enterprises. Non-State shares will be allowed in State capital investment projects. Mixed-ownership enterprises will be allowed to utilize employee stock ownership to form a vested community of capital owners and workers. Improve the State-owned assets-management system and strengthen State-asset supervision by focusing on capital management. Establish a number of State-owned capital operating companies and back the transformation of qualified State-owned enterprises into State-owned investment companies. Transfer some State-owned capital to social security funds. Improve the State-owned capital operation budget system and increase the proportion of State capital gains paid in public financing to 30 percent by 2020, which will be used to ensure and improve people's livelihoods.

7. Push for a modern system for State-owned enterprises. Accurately define the functions of different SOEs. Increase State capital's contribution to public services. In the natural monopoly industries held by State capital, the separation of government and enterprises, of government and funds, and of franchise operation and government supervision are the main thrust of the reform. Further break all forms of administrative monopoly. Improve coordinated and effective corporate governance structure. Establish a professional management system. Establish long-term incentive and restraint mechanisms, strengthen SOE's investment accountability and explore ways to publicize important information, including SOEs' financial budgets. State-owned enterprises should reasonably increase the proportion of market-oriented recruitment, reasonably determine and strictly regulate SOE executives' wage levels, and position benefits, consumption and business spending.

8. Support the healthy development of the non-public economy, which will play an important role in fostering growth, promoting innovation, expanding employment and increasing tax revenues. Adhere to the equality of rights, equality of opportunity and equality of rules; abolish all forms of unreasonable regulations on the non-public economy, eliminate hidden barriers and fix specific measures promoting non-public enterprises entering franchising fields. Encourage non-public enterprises to participate in SOE reform, encourage their capital holdings of diversified-ownership enterprises and encourage qualified private enterprises to establish modern enterprise systems.

III—Modern market system

Efforts are to be made to build a market system that is uniform but open, orderly and competitive.

9. Make market rules that are fair, open and transparent. Implement a unified market entrance system, with market players of all kinds able to enter equally and legitimately into areas that are not on the negative list. Reform the market regulation system, erasing regional protection, illegitimate favorable policies and monopoly. Perfect the market exit mechanism to promote the survival of the fittest.

10. Perfect a mechanism where prices are determined by the market. Any price that can be affected by the market must be left to the market. Push ahead with price reforms of water, oil and natural gas, electricity, transportation and telecommunication. Areas in which the government sets prices will be confined to public utilities, public service and areas that are naturally monopolized.

11. Form a construction-land market that unifies urban and rural areas. Allow the sale, leasing and demutualization of rural, collectively owned buildable land under the premise that it conforms to planning. Enlarge the area in which State-owned land can be leased. Reduce land allocation that does not promote public welfare.

12. Improve financial markets. Further open up the financial industry. Allow qualified private capital to set up financial institutions such as small- and medium-sized banks, under enhanced supervision. Push ahead with reform of policy-based financial institutions. Promote reform toward a registration-based stock-issuing system and increase the proportion of direct financing. Improve market-based exchange rate formation mechanisms for the renminbi. Accelerate interest rate liberalization and capital-account convertibility. Build a deposit insurance system and complete the market-based exit system for financial institutions.

13. Deepen science and technology system reform. Set up and complete a system that encourages innovation. Perfect a market-based system that encourages technological innovation. Strengthen intellectual property application and protection. Explore ways to set up intellectual-property courts. Break executive-leading and departmental segmentation, building a system where the market decides innovation program selection, resource allocation and result assessment. Improve the venture capital system, innovate business models and promote capitalization and industrialization, and scientific and technological achievements.

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