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Opening-up good for resource distribution

China Daily | Updated: 2021-03-09 07:40
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Editor's Note: The following are excerpts from a recent interview Zheng Yongnian, a professor of politics at The Chinese University of Hong Kong, Shenzhen, gave to the 21st Century Business Herald on the Government Work Report.

State Grid employees check solar power panels in the Tibet autonomous region. [Photo by SONG WEIXING/FOR CHINA DAILY]

This year's economic growth target of over 6 percent shows that development remains China's top priority, as a means to address many of the country's problems.

By setting such a growth target, which is based on the country's practical capacity, the central authorities can promote high-quality socioeconomic development.

Although the government has eradicated abject poverty, it needs to further promote social fairness and justice to realize overall prosperity.
Apart from creating more jobs, which explains why the government prioritizes its supports for micro, small and medium-sized enterprises, the country needs to more effectively use the taxation policy to facilitate fairer distribution of national wealth.

Although giving loans to micro, small and medium-sized enterprises is fraught with more risks than sanctioning loans to State-owned enterprises, State-owned banks should more actively support the micro, small and medium-sized enterprises, because they are not only the main job creators but also the main innovators and taxpayers.

Another important task for the country is to increase investment in research and development and reduce taxes for innovation-oriented enterprises, if not exempting them from taxes, to promote reform and innovation.
The authorities must realize that protecting intellectual property rights is also necessary for boosting innovation.

Also, the SOEs should allow private enterprises to play a bigger role in some sectors so that the two can better contribute to the development of the country and the wellbeing of the people.

Opening up some industries and markets to private enterprises and investors would also help promote technological progress and improve labor productivity.

So the further opening up of the Chinese economy must include the opening up of domestic sectors to private enterprises and investors, so as to ensure the optimal distribution of resources and facilitate sustainable development.
After all the dual circulation development paradigm entails the integration of the domestic market, and market-based distribution of production resources.

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