40 Wei Liu and Peng Xie, ―Zhongguoshi fanlongduan wunian‖ (Chinese Style of Anti-Monopoly for Five Years) Nanfang Zhoumo (Southern Weekend), 27 September 2013, http://www.infzm.com/content/94649, accessed November 10, 2013.
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The CPC has announced 16 categories and 60 missions as their goals and directions.41 The major issue of ―accelerating the perfection of modern market systems‖ (jiakuai wanshan shichang tixi 加快完善市場體系) illuminates China‘s position that ―establishing a unified and open,
competitive and orderly market system is the basis for the market to have a decisive function in the allocation of resources.‖ It includes five significant tasks: creating fair and transparent market regulations, perfecting a mechanism in which prices are determined by markets, instituting a uniform urban and rural construction land market, improving financial market systems and deepening science and technology structural reform.
Up to February 2014, reform projects related to four of these tasks have already been initiated. First, on the issue of the open market, in early December of 2013 the Ministry of Commerce and 12 other ministries jointly issued the ―program on eliminating regional blockades and breaking up industrial monopolies‖ (xiaochu diqu fengsuo dapo hangye longduan gongzuo fang’an 消除地區封鎖打破行業壟斷工作方案).42 Second, concerning the price mechanism, in the first press conference in January 2014, the spokesman of NDRC, Li Piaomin, mentioned that the NDRC will improve the price-setting mechanism and facilitate reform in the electricity, civil aviation, natural gas, railroad and water industries.43 Third, with regard to the financial market system, on November 30, 2013 the State Securities Regulatory Commission unveiled the
―Opinions on Further Promoting the Reform of the System of Offering for New Shares‖ (guanyu jinyibu tuijin xingu faxing tizhi gaige de yijian 關於進一步推進新股發行體制改革的意見),
41 See https://mitsloan.mit.edu/group/docs/iwer/CCP-Central-Committee-Resolution-concerning-Some-Major-Issues-in-Comprehensively-Deepening-Reform--China-Copyright-and-Media.pdf.
42 ―Shangwubu deng shi‘er bumen kaizhan xiaochu diqu fengsuo dapo hangye longduan gongzuo‖ (Twelve Ministries including the Ministry of Commerce and etc started to work on eliminating the regional blockade and break industrial monopoly), Xinhua Net, 10 December 2013, available at http://news.xinhuanet.com/fortune/2013-12/10/c_125837789.htm, accessed 21 February 2014.
43 ―Fagaiwei: jinnian jiang jiji tuidong shuidianqi jiagegaige‖ (NDRC: will actively implement the reform plans in water, electricity, and gas tariffs), Xinhua Net, 22 January 2014,
http://news.xinhuanet.com/fortune/2014-01/22/c_119084057.htm, accessed 21 February 2014.
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and People‘s Bank of China issued the ―Interim Measure for the Administration of Interbank Certificates of Deposit‖ (tongye cundan guanli zhanxing banfa 同業存單管理暫行辦法).44 Fourth, as for the structure of technology, in February 2014 the Standing Committee of the State Council declared a reform plan for intellectual property rights, ―Opinion on Making Publicly Available According to Law Information on Administrative Penalties Concerning the Production and Sale of Fake, Counterfeit, and Sub-standard Goods and Intellectual Property Rights
Infringement‖ (guanyu yifa gongkai zhishou jiamao weilie shangpin he qinfan zhishichanquan xingzhengchufa’an xinxi de yijian 關於依法公開製售假冒偽劣商品和侵犯知識產權行政處罰
案信息的意見).45
Another subject closely related to market development is ―persisting in and perfecting basic economic institutions‖ (jianchi he wanshan jiben jingji zhidu 堅持和完善基本經濟制度).
It stresses the importance of public ownership as the basis of the socialist market economy and encourages the expansion of the non-public economy. Four works are identified: perfecting the property rights protection system, developing a mixed-ownership economy, promoting the modern enterprise system in the state sector and supporting the development of the non-public economy. The director of SASAC, Zhang Yi（張毅）, has made two major statements
regarding the mixed economy and SOE reform. On December 26, 2013, Zhang said that SASAC needed to establish some constraint mechanisms such as a fair pay scale for SOE managers, a
44 ―Zhengjianhui fabu ‗guanyu jinyibu tuijin xingu faxing tizhi gaige de yijian‘‖ (CSRC announced the ―Opinions on Further Promoting the Reform of the System of Offering for New Shares‖), Sina Net, 30 November 2013,
http://finance.sina.com.cn/stock/yjdt/20131130/154717488809.shtml, accessed 21 February 2014; ―yinghang gonggao ‗tongye cundan guanli zhangxing banfa‘ jiuriqi shishi‖ (The Central Bank Announced that ―Interim Measure for the Administration of Interbank Certificates of Deposit‖ will be effective on December 9), People Net, 8 December 2013, http://finance.people.com.cn/bank/n/2013/1208/c202331-23779901.html, accessed 21 February 2014.
45 ―Guowuyuan pizhuan yijian guiding: jiamao weilie he qinquan xingzheng chufa‘an xinxi xugongkai‖ (The State Council approved the Opinion Indicating that the Information about the Production and Sale of Fake, Counterfeit, and Sub-standard Goods and Intellectual Property Rights Infringement should be publicized), People Net, 20 February 2014, http://politics.people.com.cn/n/2014/0220/c1001-24410436.html, accessed 21 February 2014.
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sound financial management and audit system and information disclosure. Two months later in February 2014, Zhang mentioned that the state will develop a mixed economy with a focus on solving the problem of state-assets‘ dominance in the market and restructuring the SOEs to allow for more private capital and improved corporate governance.46
Although the Chinese state has revealed many reform projects concerning the
improvement of the market system, there has been no further information about three important mechanisms: a property rights protection system, a non-public economy and an urban and rural construction land market. It is clear that the success of China‘s market development hinges on SOE reform and the China Dream has reconfirmed this essential premise. Nonetheless, it also shows that the Chinese state has adopted a political logic but not an economic logic in building up a market system. Unfortunately, what the Chinese leadership has missed is that the state sector no longer has a subordinate responsibility for policy tasks but instead has become the country‘s largest interest group, pursuing their own profit. Moreover, simply restructuring the SOEs will not necessarily introduce a level playing field, but creating a functioning regulatory system will do just that.
CONCLUSION
After advancing into the reform era for more than three decades, China now faces a new challenge of advancing market development while sustaining economic growth. The market is expected to play the decisive role in allocating resources, but the more important point is the state‘s regulatory capacity. Only by fostering effective state regulation can the market
46 ―Guoziwei, tansuo jianli chuziren shenpi shixiang qingdan‖ (SASAC Explores to Establish a List of Approval as Investor), 18 February 2014, Sina Net, http://finance.sina.com.cn/china/20140218/100818248644.shtml, accessed 22 February 2014.
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mechanism develop further. Nonetheless, the current situation demonstrates that the Chinese state is marching backward as their economy opens further. The central government prioritizes the goal of enhancing the socialist party-state regime, including regulatory development. As the state sector regains its momentum and expands at the expense of the private sector, the
weaknesses of state regulation become more remarkable. When interacting with the market, the Chinese state protects its state assets and ensures the dominant status of SOEs in their respective industries. In some strategic industries in which SOEs monopolize, the market system is not established and competition is very limited. The comprehensive commissions, a legacy of the planned economy, has not faded away but strengthened in overseeing and leading the national economy. Personnel mobilization between the government, party and SOEs has facilitated regulated firms in building up connections with the regulatory authority. In a multi-agency setting, the regulatory agencies‘ capabilities are seriously undermined and discredited.
Accordingly, state regulation is beset by an intractable and hydra-headed bureaucracy. In short, both structural and institutional constraints prevent the market system from improving.
Returning to the questions this article posed at the very beginning, we find that the future of market development under the China Dream remains ambiguous, if not negative. The Chinese state itself is the root of the difficulty because the role of the state has not changed a lot in the shift from the planned economic system to the market economic system. The state merely intervened in the economy in a different way. While the robust private sector has contributed enormously to China‘s rapid economic growth, it is always threatened by an ―unlevel playing field‖ in favor of the state sector. Hence, to what extent the market can develop remains to be decided by the Chinese state instead of mutual interaction between the state and industry. The
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slogan of the China Dream has already inspired expectations and imagination in China, but unfortunately it might be very difficult to realize, if not impossible.
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Table 1. Selected Regulatory Agencies in China Supervisory
(former chairman of China Agricultural Bank)
(former chairman of Bank of China) Civil Aviation Administration Ministry of
Transport
Ministerial Department
2003/2008 Civil Aviation
Li Jiaxiang (former general manager of Air China)
(former deputy party secretary of Henan)
(former vice Minister of Health) State Administration of Work
Safety
State Council
O 2001/2003 General Yang Dongliang
(former deputy mayor of Tianjin) State Electricity Regulatory
(former director of Food Safety Office of the State Council)
1984/2008 Tobacco Ling Chengxing
(former deputy party secretary and deputy governor of Jiangxi)
(removed in September 2013, former
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Ministry 2008 General Zhou Shengxian
(former director of the State Forestry Administration)
(former party secretary of Wuhan)
National Development and Reform Commission
State Council
Ministry 2003 General Xu Shaoshi
(former minister of Land and Resources)
State Anti-Monopoly Commission State Council
Coordinatio n Institute
2008 General Wang Yang (jointly held by Vice Premier)
I: Institution directly under the state Council (Guowuyuan zhishu shiye danwei) O: Organizations directly under the State Council (Guowuyuan zhishu jigou)
S: Special organization directly under the State Council (Guowuyuan Zhishu teshe jigou) Source: Compiled by the authors.