(4) We must link persevering with the basic system of socialism with developing the market economy, so as to make full use of the superiority of socialism and the effectiveness of market forces in allocating resources and create a society full of vitality for reform and development.

In the past 30 years, while adhering to the basic system of socialism amid profound and extensive changes, we have developed the market economy in a creative way under socialist conditions, which ensure our economic activities conform to the law of value, consistently liberated and developed social productive forces, increased national capacity, and improved people’s livelihoods, thus better fulfilling our central task of economic construction. Establishing and optimizing the socialist market economic system is a historic contribution of our Party to Marxism and socialism.

The cause that our Party is leading the people to engage in is socialism. It is essential to persevere in the Party’s leadership, guarantee the position of the people as masters of the country, and persist in the economic system in which public ownership and distribution according to work are dominant. In the meantime, we must actively explore systems and mechanisms that can greatly liberate and develop social productive forces and give full play to the development enthusiasm of the whole society, in order to allow the vitality of labor, knowledge, technology, managerial expertise and capital to compete in functioning and all sources of social wealth to be fully tapped. Our Party’s definition of the establishment of the socialist market economy as the target model of China’s economic restructuring has correctly addressed a major issue concerning the overall picture of socialist modernization. We have been devoted to establishing and optimizing the socialist market economic system, giving better play to the basic role of market forces in allocating resources, and promoting the establishment of a modern system of property rights and a modern corporate management system. At the same time, we have attached great importance to enhancing and improving the state’s macroeconomic regulation, overcoming the faults inherent in the market itself, and ensuring dynamic, efficient and sound economic operation. We have been unwavering in consolidating and developing public ownership, ensuring the dominant role of the public sector of the economy, actively implementing multiple forms for the effective realization of public ownership, and enhancing the dynamism, dominance and influence of the public sector of the economy. At the same time, we have unswervingly encouraged, supported and guided the development of the non-public sector, and created a new situation in which all economic sectors compete on an equal footing and reinforce each other. We have adhered to and improved the system whereby distribution according to work remains the predominant mode and coexists with various other modes, with efforts being made to encourage creation, promote development, guarantee social fairness and prevent polarization. We will always stick to the orientation of reform that is to develop the socialist market economy, continue to improve the socialist market economic system, and enhance and optimize macroeconomic regulation so as to give strong impetus to sound and rapid social and economic development.

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