China’s economic development calls for new theories and paradigms, said experts at the Second International Conference on China Development Theory recently held in Beijing.

2020 is a milestone year, said Liu Shouying, dean of the School of Economics at Renmin University of China (RUC). As China is completing the building of a moderately prosperous society in all respects and winning the battle against poverty, in the context of the COVID-19 pandemic, this conference aims to theoretically summarize the important experience from China’s economic development and study new directions for China and the world under profound changes unseen in a century.

Although neoclassical economics provides classic doctrines for national development and transformation, the theories do not sufficiently explain the complex and changeable economic reality impacted by various crises in recent years.

When solving major traditional global challenges, existing theories have not adequately solved development problems and deep-seated structural problems. The academic circle may have ushered in a revolutionary period in economics, observed Liu Yuanchun, vice president of RUC. In the current era, the economic theoretical system of socialism with Chinese characteristics is showing great vitality.

“We need to profoundly study the new ideas, new theories and new paradigms that China has nurtured in its development,” Liu said.

Planning has a special function under market economy conditions, according to Yang Weimin, deputy head of the economic committee of the 13th National Committee of the Chinese People’s Political Consultative Conference.

Planning joins actions for the whole of society and consolidates social consensus into the will of the country, Yang explained. Planning guides resource allocation. While the market plays a decisive role in resource allocation, the government also channels allocation through planning. Planning is the basis for the government to perform its duties. The flexibility of planning lies in its compliance with laws and regulations and adaptability to medium and short-term economic operations. Moreover, planning is the second criterion constraining market and government behavior, and the expected and binding indicators in our plans can be a useful supplement to the law. Planning can clarify development ideas and lead the country’s development.

In addition, Yang noted that the expected planning indicators represent a level of development that the country expects to achieve. To this end, the government must provide a good macro environment, market environment, and institutional environment. The government also needs to regulate the protection of land and space by designating the use of main functional areas, so as to achieve a general balance of infrastructure, public services and people’s living standards, showcasing the concept of balanced local development.

Li Shi, a member of the expert advisory committee of the State Council Leading Group Office of Poverty Alleviation and Development, suggested establishing a long-term adjustment mechanism for income distribution and an equalization mechanism for human capital investment, including: equalization of educational opportunities and medical services; reform of the tax system, reducing indirect taxes, and increasing the proportion of direct taxes; reform of the public financial system, increasing spending on people’s livelihoods and public services, with an emphasis on the redistributive effects of taxes and transfer payments; deepening the reform of the factor market, eliminating discrimination in the labor market, and achieving equal opportunities for employment, housing and social welfare.