Balancing hand of government
- By Xu Shaoshi
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E-mail China Daily, December 25, 2013
The country also needs to handle the relationship between overall arrangements and regulations in individual fields to achieve better regulatory effects through effective implementation of macroeconomic policies in different fields. While ensuring the enforcement of its macroeconomic regulation policies, the country should also strengthen policy assessment and make timely improvements and adjustments based on new circumstances emerging in their implementation.
For better macroeconomic regulations, the country should first define their main tasks in a scientific way. These are to maintain a balance in terms of its economic aggregate, promote its economic structural coordination and optimization of its production pattern, reduce cyclical economic fluctuations, prevent regional or systematic risks, stabilize social expectations, and promote sustainable and healthy development of national economy.
A macroeconomic regulatory system guided by the national development strategy and based on the country's financial, fiscal and monetary policies should be put in place.
An explicit national development strategy with macroeconomic regulation targets remains the main foundation of the country's fiscal and monetary policies. The national development layout should play its coordinating role in the arrangement of the country's public budgets, the use of its financial capital, the development of land, as well as the distribution of resources. The country should regard making improvements to its fiscal and monetary policies and giving them a full role as the main means of national macro regulations. Given that fiscal policies can play an important role in promoting economic growth, optimizing structure and regulating income distribution, the country should try to make improvements to the implementation of its fiscal policies. At the same time, monetary policies should also be given a full part in regulating the ratios of the country's capital adequacy, liquidity and leverage.
Efforts will be strengthened to promote coordination between the country's financial and monetary policies and its industrial and pricing policies to make its macro regulations more targeted and more far-sighted. Departments in charge of macroeconomic regulations should strengthen policy coordination among themselves and with other departments to prevent these policies from being offset or excessively overlapping. Measures will also be made to promote institutionalization of the country's macroeconomic regulation targets and policymaking. A democratic decision-making mechanism will be set up so that public opinions can be heard when major policies are made. At the same time, efforts will be accelerated to form an international macroeconomic policy participation and coordination mechanism. Such a mechanism can help China keep a close watch on international economic and financial conditions and policy changes in some major countries and strengthen policy coordination and communication with them. More active participation in multilateral economic cooperation can also boost China's voice on the international arena, push forward the reform of international economic governance and promote a more reasonable international economic order. It will also help create a China-favorable international environment, expand its development space and maintain its opening-up interests.
Practical measures will also be taken to deepen the country's investment system to give enterprises a bigger role in investment activities. For the sake of the establishment of a sound macro regulatory system, China should limit its examinations and approvals and reduce its interventions into corporate activities.
The author is minister of the National Development and Reform Commission. This is an abridged version of an article published in People's Daily.
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