Goal of necessary reform and transformation should be a lighter, more balanced hand on the market and society

Whether or not China can make some breakthroughs, by transforming government functions to end the "big government" that exists at present, will determine its development prospects. The crux of this is changing the relationship between the government and the market and the relationship between government and society.

To begin with, the government must reform its growth-oriented development model and restore a rational relationship between itself and the market. The market, not the government, should play the leading role in the economy.

The government has played an important role in boosting the country's fast economic growth by concentrating resources in investment and construction. Such a model of economic growth relies heavily on large-scale investment, land transfers, heavy chemical industries and the government's distribution of resources. However, it has meant paying exorbitant environmental costs and resulted in a lack of public services.

To solve these problems, the government must change its role to that of a service provider. In the initial development stage of a market economy, the government's main function is to create a fair market environment for competition. But it is now time for the government to stop regarding fast economic growth as its biggest and most important objective.

The government represents public interests. But government interests are now divided among departments, industries and places, lowering the efficiency of the whole system of government and making public interests victims in social life.

The government should optimize its administrative power structure by conceding, decentralizing and binding some of its power. That government reform and transformation have not yielded any concrete achievements after years of efforts is because the government's power structure has not changed. The reform of development commissions of various levels are cases in point. They are responsible for approving big projects and administrating the pricing system. It is very difficult to reform them, as they are in charge of both macrocontrol and specific project approvals.