Socialist market economy in China to be modernized
The example of China has shown the world that the socialist market economy can actively develop if the course of reforms is properly outlined. China’s progress is particularly noteworthy in view of the crisis caused by the pandemic. The country managed to restore all the processes and raise the economy as soon as possible.
Last year, the Chinese government adopted a new concept of quality development. Its key points were to improve innovation, reduce dependence on imports, and reduce carbon emissions and preserve the environment. According to the new model, the domestic market is important, and its strengthening will also help develop the external segment, thus strengthening the country’s position in the world arena.
The authorities have outlined the implementation of socialist modernization strategy until 2035. Besides, the main goal of the five-year plan was to reform and strengthen the technological sector. First of all, all efforts will be aimed at reducing its dependence on resources of foreign companies and investors. This problem is especially acute in the context of strained trade relations between China and the United States, and the restriction of technology companies from Washington. To promote innovation, Beijing intends to give more autonomy to developers, fully support their ideas and enter the domestic market.
The new development strategy aims to overcome the crisis faced by the Chinese economy. The past events have shown how dependent the country is on the external market and how underdeveloped the domestic market is. Therefore, in the coming years, the bet will be placed on this very segment, which will reduce export supplies and strengthen industry within the country. Production of semiconductors, development of 5G technology and infrastructure for it, as well as development of artificial intelligence are promising areas.
Heavy restrictions have helped China overcome the pandemic and restore all processes in a short time. By the end of Q3, the economy had already shown recovery, and further growth was observed, though not as the authorities expected. The government hopes that the new strategy adopted will allow China to further strengthen its position and become a leader in the world market by displacing the United States.
However, not everyone is as optimistic as the Chinese government. World experts have repeatedly stated that China’s economic performance is overestimated, and over time it may turn out to be a big problem. In the race to overtake the U.S. in the world market, Beijing may miss the moment when you need to change the chosen strategy to enable the economic and banking system to withstand the changing conditions of the modern world. In addition, China is still a closed country, which limits its development.