Development Research Center of the State Council: Policy Recommendations for China’s New Economy

Title: Strategic objectives to promote high quality economic development (高质量发展的目标要求和战略路径)
Journal: Management World (管理世界)
Authors: Zhang Junxuan (张军扩), Hou Yongzhi (侯永志), Liu Peilin (刘培林), He Jianwu (何建武), Zhuo Xian (卓贤); all authors are affiliated with the Development Research Center of the State Council
Publication: July 2019

  • The authors write that China’s “high growth” economic model has lifted millions out of poverty but it has also created new problems, especially related to: widening income distribution gaps, environmental pollution, difficulty for low-income citizens to access and afford high quality healthcare and education, and product and drug safety issues.

  • The authors propose 10 policies Chinese leaders should adopt to help the country transition from a “high growth” economic model to one that also emphasizes “high quality” development. Some of these include:

    • Break barriers that restrict the free flow of capital, technology, land, and labor. Make it easier to transfer assets, create more property rights protections, and ease restrictions on urban-to-rural investments.

    • Intensify and introduce new laws to promote product and drug safety. Make it easier for consumers to sue for damages. Introduce measures that enhance product traceability (by requiring better product labeling, for example), increase the frequency of random inspections at factories, and increase penalties for violators of product safety laws.

    • Increase incentives for innovation. Establish more government mechanisms that promote long-term investments in R&D at scientific centers and national laboratories. Simultaneously strengthen intellectual property rights protections for scientific innovators.

    • Close income distribution gaps. Increase pay for laborers and introduce new taxes to curb “excessive income.”

    • Enhance environmental protections. Impose more stringent caps on allowable pollutants emitted by industry. Establish financial mechanisms that compensate regions for undertaking environmental protection work.

    • Create metrics that evaluate officials’ performance that include indicators that measure the “quality” of development. For example, these can include indicators that measure citizen satisfaction levels related to quality of education as well as the size of the income distribution gap in a given geography.

Note: All authors are associated with the government-affiliated Development Research Center of the State Council, where three of these authors are in leadership positions. Zhang Junxuan is a deputy director, Hou Yongzhi is a director general, and Liu Peilin is a deputy director general. This was one of the most downloaded articles in July 2019 in the social sciences field. The Development Research Center of the State Council publishes the Management World journal.