Think Tank

Adhere to the combination of efficient market and proactive government to build a modern industrial system

2025-11-19   

The modernized industrial system is the material and technological foundation of Chinese-style modernization. The Central Committee of the Communist Party of China in its proposal for the 15th Five-Year Plan for Economic and Social Development (hereinafter referred to as the "Proposal"), adopted at the Fourthenary Session of the 20th CPC Central Committee, has placed "Building a modernized industrial system and consolidating and expanding the foundation of the real economy" as the strategic task and has made important arrangements, which reflects the continuity of the CPC Central Committee's strategic planning and the precision of its guiding principles. Building a modernized industrial system not only scientific guidance and strengthened policy support from the government but also the regulation of the market mechanism and the continuous innovation of micro-subjects such as enterprises. General Secretary Xiping pointed out: "It is necessary to combine an effective market with a capable government to promote the complementary advantages and common development of economies under various forms of ownership." The important that must be followed in the economic and social development during the "15th Five-Year Plan" period, as clearly defined in the "Proposal", includes "ading to the combination of an effective market and a capable government". The "15th Five-Year Plan" period is a critical period for laying a solid foundation and exert full efforts to achieve the basic modernization of socialism, and the task of building a modernized industrial system and consolidating and expanding the foundation of the real economy is more ardu. To thoroughly implement the spirit of the Fourth Plenary Session of the 20th CPC Central Committee, we must promote a better combination of an effective market and a capable, give full play to the superiority of our system, and create a new situation in the construction of a modernized industrial system during the "15th Five-Year Plan".

Adhering to the combination of effective markets and proactive government is an inherent requirement for building a modernized industrial system.
How to understand and deal with the relationship between government and market is the core issue of the market economy and also a global challenge. General Secretary Xi Jinping pointed out: "As the issue of the role of the market and the role of the government, we should use dialectics and talk about both sides. We should use both the 'invisible hand' the 'visible hand' well." This profoundly reveals the relationship between the two, which should not be neglected and should be dialectically unified. Since the new era, the Party Committee, with Comrade Xi Jinping at its core, has profoundly summarized the global economic development experience and regularity, and creatively proposed to give full play to the decisive role of market in the allocation of resources, better play the role of the government, promote the better combination of effective markets and proactive government, and has pushed our Party's understanding of the of the construction of the socialist market economy to a new height.
The modernized industrial system is an important part of the modernized economic system and an important symbol of the of economic modernization. The modernized industrial system to be built in our country is supported by technological innovation and is an industrial system that firmly grasps the new round of technological and industrial transformation such as artificial intelligence, adapts to the requirements of harmonious coexistence between man and nature, and efficiently gathers global innovative elements. At the same time,'s modernized industrial system focuses on the real economy, insists on the integrated development of the three industries, maintains and continuously strengthens the advantages of a complete and complementary industrial system and has the characteristics of integrity, advancement, and security. It is an important carrier for achieving high-quality development. In this sense, the process of building a modernized industrial is the process of promoting the leap from traditional productivity to advanced productivity. It is very important to deal with the relationship between government and market in this process
Playing the role of an effective market can energize and improve the efficiency of the modern industrial system. The positive role of the in the construction of a modern industrial system is generally reflected in three aspects. From the perspective of driving force, the integrity, advancement, and security of the modern industrial system fundamentally originate a high level of self-reliance and self-improvement in science and technology. The market is the "catalyst" for promoting scientific and technological innovation. With mechanisms such as profit orientation and competitive pressure, it urges enterprises to increase R&D investment and promote technological iteration, which can further consolidate the scientific and technological foundation for building a industrial system. From the perspective of support, the real economy is the foundation of the modern industrial system. The market guides the allocation of funds, technology, and other factors of to the real economy through the price mechanism and the competition mechanism, and focuses on promoting the quality improvement and upgrading of traditional industries, the cultivation and expansion of emerging industries, and the layout of future industries, which can strengthen the competitive advantages and development momentum of the real economy in all aspects. From the perspective of sustainability, people are the elements of resources with subjective in the construction of the modern industrial system. Playing the role of the market mechanism can not only regulate the balance between the supply and demand of human resources and improve the adaptability talents to economic and social development but also create new occupations and new positions to expand the breadth and depth of human resources allocation and enhance the vitality of economic innovation and development., playing the role of the market in terms of technology research and development direction, route selection, and factor allocation can promote the gathering of high-quality production factors to the construction of modern industrial system.

The role of a proactive government can provide an important guarantee for the development and security of a modernized system. The decisive role of the market in the allocation of resources does not mean that the market should play all the roles. It is important to realize that the market is not omnotent and there is natural market failure in the areas of industrial layout, public goods supply and market order maintenance. The government must adhere to taking action when necessary and refraining froming when not needed, and make up for market failure and areas that the market is unable to address. Specifically, in the face of the reconstruction of global industrial chains and the intens of technological competition, the government, focusing on long-term goals, defines the direction of industrial development, and guides and strengthens basic research, which is conducive to the problem of key technologies being "blocked", and ensures that the initiative of modernized industrial system construction is in our own hands; In the field of public services, the provides infrastructure, public goods, institutional policies, etc. for industrial development, which can create a good atmosphere and environment for the construction of a modernized industrial system; In market building the government can ensure the full release of market vitality within the regulatory framework by strengthening market supervision, improving the legal system, and cracking down on monopoly and unfair competition. The more the government's behavior is, the more effective the market's role will be. Being "proactive" is by no means excessive intervention, but following the laws of the, being in place without being absent, and being supplementary without being overbearing, and precisely filling in the areas where the market cannot play its role effectively, thus forming an economic that is both "let go" and "regulated well".
Looking at the whole picture, the combination of effective markets and proactive governments embodies the mutual adaptation of forces and production relations. An effective market represents the objective trend of productive forces pursuing efficient allocation of resources and continuous innovation, and a proactive government represents the active adjustment, institutional innovation, strategic guidance of production relations in order to adapt to the requirements of the development of productive forces. Building a modernized industrial system requires the combination of an effective market and a proactive, and the smooth operation of various mechanisms related to the improvement of the quality and efficiency of the industry and the efficient allocation of factors, which also reflects the organic unity of theoretical logic historical logic, and practical logic. From the perspective of theoretical logic, as a major innovation of the political economy of socialism with Chinese characteristics, the application of the combination of effective markets proactive governments in the field of industrial development has formed a pattern of modernization of the industrial system that stimulates vitality through the market and regulates order through the government. From historical logic, the combination of effective markets and proactive governments condenses the results of institutional evolution from planned economy to planned commodity economy and then to socialist market economy in China, promotes leap from "establishing an independent and relatively complete industrial system and national economic system" to "complete industrial system advantage", and demonstrates a unique path to promote the modernization the industrial system through institutional reform and innovation. From the perspective of practical logic, the combination of effective markets and proactive governments provides an institutional guarantee for the formation and development of new forces and a new type of production relations adapted to the construction of a modernized industrial system, promotes the industrial system towards intelligent, green, and integrated directions, and achieves the leap the level of the industry and the optimization of quality and efficiency.

Edit:Luoyu Responsible editor:Jiajia

Source:people.cn

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