China to ease transition pains with reform dividends

Whether or not China can sustain its unprecedented "growth miracle" after decades of rapid economic expansion is a question that has grabbed world attention.

Analysts and observers believed that the future performance of China's economy is largely dependent on whether the dividends of reform can ease the transition pains.

China has been pushing its comprehensive reform into high gear since about three months ago when the government unveiled a 60-point reform blueprint after the third plenum of the 18th Central Committee of the Communist Party of China.

Most of the reform initiatives that have been carried out have followed the overall strategy of "modernizing China's governing system and governing capability," which was put forward by President Xi Jinping.

Observers believed the the underlying issue China faces in the process of modernizing China's governance system and governance capability is how to strike a balance between efficiency and equity, as well as between the role of the government and that of the market.

Further clarifying the boundaries of the market and the government is key to the modernization of economic governance.

Since the third plenum, a series of reform measures have been rolled out with an aim to sort out the relationship between government and market, including measures to streamline the administrative approval regime, develop a mixed-ownership economy, promote reform of state-owned enterprises and speed up the price reform of exhaustible resources.

"Whatever the law does not prohibit can be done as far as the market is concerned, while whatever the government does must be authorized by law," that is how Premier Li Keqiang summarized the relationship between government and market.

Clarifying the boundaries of the market and the government will help curtail excessive government power and enable the market to play a decisive role. It will also help unleash the power of the market in China's economic system, which has great significance for China's interest rate reform, currency reform, resource pricing reform and reforms of the state-owned enterprises.