The Decisive Role of the Market in Resource Allocation

The Decisive Role of the Market in Resource Allocation

At the third plenary session held in November 2013, the 18th CPC Central Committee stated that the market should play a decisive role in resource allocation. Letting the market determine resource allocation is a general law of economics, and it is also the essence of a market economy. So the process of refining a socialist market economy must abide by this law.

Efforts are needed to address such problems as the imperfections in the market system, excessive government interventions, and supervision that falls short, so as to maximize benefits and optimize efficiency by promoting the mechanisms which rely on the market to allocate resources.

The idea of letting the market play a decisive role in resource allocation is a continuation and extension of the concept of letting it play a “fundamental role,” a concept which had been used for the previous 20 years. This new formulation helps the entire Party and entire society to correctly understand the relationship between the government and the market; it helps transform the mode of economic development; it helps transform government functions; and it helps constrain negativity and corruption.

The market is, of course, an “invisible hand” as well as a “merciless whip.” It creates competition and initiative in socioeconomic activities, but at the same time, its spontaneity and blindness can result in market failures, making it necessary for the government’s “visible hand” to play a role. The government’s responsibility and function are primarily to maintain macroeconomic stability, to improve and optimize public services, to ensure fair competition, to strengthen market oversight, to maintain market order, to foster sustainable development, and to promote joint prosperity, thereby compensating for market failures.

To let the market play the decisive role in resource allocation and the government play its role better – this is a major issue both in theory and practice. An accurate understanding of this issue is significant to furthering reform and promoting the sound and orderly development of the socialist market economy.

市场在资源配置中起决定性作用

2013年11月召开的中共十八届三中全会提出，使市场在资源配置中起决定性作用。市场决定资源配置是市场经济的一般规律，市场经济本质上就是市场决定资源配置的经济。健全社会主义市场经济体制必须遵循这条规律，着力解决市场体系不完善、政府干预过多和监管不到位问题，推动资源配置依据市场机制实现效益最大化和效率最优化。做出“使市场在资源配置中起决定性作用”的定位，是对此前沿用20多年的“使市场在资源配置中起基础性作用”这一提法的继承和发展，有利于在全党全社会树立关于政府和市场关系的正确观念，有利于转变经济发展方式、转变政府职能，有利于抑制消极腐败现象。当然，市场这只“无形的手”在使整个社会经济活动更加活跃的同时，也会由于其自发性、盲目性造成市场失灵，需要政府这只“有形的手”来发挥作用。政府的职责和作用主要是保持宏观经济稳定，加强和优化公共服务，保障公平竞争，加强市场监管，维护市场秩序，推动可持续发展，促进共同富裕。使市场在资源配置中起决定性作用、更好发挥政府作用，既是一个重大理论命题，又是一个重大实践命题。科学认识这一命题，准确把握其内涵，对全面深化改革、推动社会主义市场经济健康有序发展具有重大意义。