In a move to promote the healthy and sustainable development of the national economy and elevate China's economic and comprehensive national strength to a new high, the Third Plenum of the 18th Central Committee of the Communist Party of China vowed to push for more scientific macroeconomic regulation and effective governance.

According to a guideline passed by the session, to improve the country's macroeconomic regulatory system, China should pay more respect to market rules, more reasonably define the boundary of macroeconomic regulations and better handle some key relationships.

The relationship between the government and the market should first be appropriately handled. The country should not just abide by market rules and give the market a decisive role in the distribution of resources, it should also work hard to prevent market dysfunctions and make up for market shortcomings. The key to a sound macroeconomic regulatory system is to transform government functions and reduce its interventions into microeconomic issues as much as possible. To this end, the government should take practical measures to delegate some of its power to other players and cancel the rigid examination and approval procedures over those economic activities that can be more effectively regulated by the market mechanism. Efforts should be accelerated to set up a modern market system in which enterprises can decide economic activities on their own and commodities and other factors can realize free flow and exchange on an equal footing. The government should try to draft its development strategy, policies and standards, and strengthen their implementation in a bid to create a standardized market order and equitable competition environment, which will help strengthen oversight and reasonably guide market players.

The relationship between the central and local governments should also be handled well. Macroeconomic regulations are aimed at not only maintaining the authority of central government regulations but also giving local governments enough space to play their own role based on differentiated conditions. Local governments should be empowered to fully realize their advantages and manage all grassroots economic and social activities.

For more scientific macroeconomic regulation, the country also needs to properly handle the relationship between long-term and short-term issues. It should try to promote a general demand-supply balance through reasonable macroeconomic regulations, iron out short-term economic fluctuations, control inflation, ensure full employment, defuse various kinds of risks, and prevent the drastic rise and fall of economic development. The country should also target macro regulations at improving its middle- and long-term supply capabilities, raising production efficiency through innovation and industrial upgrading and optimization, boosting its economic growth potential and improving the quality and efficiency of national economic development.

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