Market roles

Pushing forward the modernization of the national governance system and its capacity will lead to the deepening of administrative system reform and the transformation of government functions, Zhou Wenzhang said.

Since its inception last March, the current Chinese Central Government has focused on transforming government functions, as well as streamlining administration and delegating power to lower-level governments. It has greatly reduced administrative examination and approval procedures and reformed the business registration system so as to invigorate the market.

Official statistics show that in 2013, the number of newly registered businesses increased by 27.6 percent nationwide and private investment increased to 63 percent of the country's total investment.

In his government work report to this year's NPC session, Premier Li Keqiang stressed the need for making breakthroughs in reform in important areas. He pledged to further streamline administration and delegate more power to lower-level governments. Other reform measures include abolishing or simplifying preliminary review and approval procedures, releasing a list of all items requiring government review and approval, and reforming the business registration system, according to Li.

Too many preliminary review and approval procedures and lack of market oversight can inhibit market vitality and fair competition, Chi commented. He suggested strengthening regulation to correct market failures.

Hou Yunchun, CPPCC National Committee member and former Deputy Director of Development Research Center of the State Council

Hou Yunchun told Beijing Review that economic restructuring is the priority for comprehensively deepening China's reform. How to properly handle the relations between the government and the market is a significant challenge for the modernization of the governance system, according to him.

Hou admitted that in the past, administrative power played too big a role in directly allocating resources and was too deeply involved in economic activities. He said that the government should allow the market and society to take care of everything that would not be best handled by the state.

Chi said that the recognition of the market's decisive role in allocating resources in the CPC Central Committee's decision on comprehensively deepening reform represents a historical breakthrough. He said that the government-dominated economic growth model should be ended, and development should not be primarily measured by the GDP.

Chi called for the establishment of a macro-control system oriented toward fair competition. He said that macro-control is merely a short-term tool that should not be used routinely; otherwise, any macro-policy will displace the role of the market, and could seriously distort the allocation of resources.

A new kind of government

China's government is transforming into a law-based and service-oriented one, and is looking to engage businesses and social organizations in providing public services, according to CIPG President Zhou Mingwei.

However, many deep-seated problems should be solved in the process. For instance, according to Chi, laws are needed to restrict administrative power and strengthen market regulation.

Zhou Wenzhang said that there are several obstacles to building a law-based and service-oriented government in China, including a lack of governance capacity, the existence of vested interest groups and resistance from the traditional governance model under which the government is both a referee and a player.

In this year's government work report, Premier Li said, "We should, in keeping with the requirements for modernizing the country's governance system and governance capacity, speed up the building of a law-based, innovative and clean government, enhance its credibility and law-enforcement capability, and strive to provide high-quality and efficient services to the people."

He pledged to implement a basic strategy of law-based governance, act in accordance with the law in all government work, and be guided by law in both thinking and action while performing the government's duties.

Hou Xinyi, CPPCC National Committee member and a law professor at Tianjin-based Nankai University

Today's social structure is complex, and governance should be law-based, Hou Xinyi commented. He said that the government's power should come from the law, and be both protected and restricted by law.

"The transition from rule of man to rule of law is revolutionary for the government," Zhou Wenzhang stressed.

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