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China to adhere to basic economic system
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17:30, June 26, 2009

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In order to get to know the basic economic system at the primary stage of China's socialism, people have to grasp two essential points: one is to take public ownership as the main body and the other is to adhere to the common growth of economy belonging to diverse forms of ownership.

Taking public ownership as the mainstay is a fundamental principle of socialism. In a socialist country like China, where people have become masters of their own destiny, it is imperative to keep public ownership of means of production as a basis of the socialist economic system. So, adherence to public ownership as the main body is of vital importance in giving play to the superiority of the nation's socialist system, increasing the nation's economic strength and promoting social harmony in the country.

As is know to all, public ownership economy in China comprise not only the economy of state ownership (or the whole people's ownership) and the economy of collective ownership but also the state and collective share in mixed ownership forms.

Then, in a bid to uphold the public ownership economy as the main body with the common growth of diversified economic elements, why does China still encourage, support and guide non-public ownership owned economy? This is because the Communist Party of China (CPC) has, since the Third Plenum of the 11th CPC Central Committee held in Dec. 1978, come to recognize and redefine the status and role of the non-public sector as an important component of the socialist market economy after summing up the experience and lessons China had drawn from its past economic development.

This major policy decision complies with the intrinsic requirements of China's economic and social development and, therefore, it is absolutely not an expediency but a major policy measure never to sway but to be ket to for a long historic period of time. However, some people are still worried that the development of nonpublic sector economy would waver or even sabotage the basis of public ownership economy.

Of the world's top 500 Fortune companied publicized in 2008, there were 26 transnational firms from the Chinese mainland, including the China Ocean Shipping Company, China National Minerals Co. LTD. China Building & Construction Company and China Railway Construction Corporation. These companies with subsequent ranks are either state-owned enterprises (SOEs) or joint-stock companies with a state-controlled share.

Meanwhile, China's non-public sector economy has developed rapidly after the launch of reform and opening-up in the late 1970s and especially since 1990 and become a vital, indispensable part of the development of China's productive forces, representing 3/4 of all newly created jobs in cities and townships across China since mid 1990s. And more than 70 percent of labor force transferred from rural areas during this period of time has also found work in enterprises of non-public economy.

Practice has given an eloquent proof that taking the public ownership as the main body with the common development of diversified economic elements is of vital immediate significance and far-reaching historic importance in building and improving socialist market economic setup, promoting the development of productive forces, establishing a better-off society in a comprehensive way and speeding up socialist modernization.

At present, the economy of private ownership is dominant in some 200 countries and regions worldwide, whereas the developed capitalist countries only makes up a small number. Development experiences in many countries however show that private economy cannot necessarily bring them booming economic development.

Situation in China is quite different anyway. Since the late 1970s, the country has introduced and put into practice a system of the household contract responsibility system supplemented by unified management. Great successes so far obtained in this aspect have aroused enthusiasm among Chinese farmers for increasing farm output and running other undertakings. This has largely liberated and developed the rural produces forces.

China's upbeat scene seethed with vis and vigor stands in sharp contrast to some developing nations, where peasants or poor farmers turn impoverished in the wake of bankruptcy and look for jobs everywhere in cities, and these would-be urbanites often huddle in urban slums.

As a matter of fact, China is still in the primary stage of socialism and its economic growth is imbalanced between cities and the countryside and from region to region. Some inland regions and outermost border areas are relatively poor and backward. In such circumstance, if the socialist economic system for the primary phase of socialism is not well kept to, its entire economic setup will ossify and become stagnant, and this will be unfavorable or even harmful to the country's economic development.

In a nutshell, it is imperative and essential to consolidate and develop the public ownership economy, to encourage, support and guide the growth of the non-public sector economy, and to maintain the right to equal access of property resources, so that a brand-new situation will emerge, in which all economic sectors will "vie with each other" on an equal footing so as to spur their economic activity for mutual advancement.

By People's Daily Online

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