Let “the Invisible Hand” Be Visible

After more than 30 years of rapid growth of China’s economy since its opening up,China is now coming to the crossroad, facing the challenge of the transition of its growth model.1. opening up: 改革开放；crossroad: 十字路口；growth model: 增长模式。Recognizing the importance of the market and letting the market play a signi ficant role is the key to a successful transition.

History tells us that only an ef ficient market can establish an ef ficient price signal,which leads to full and free competition; and only an effective government can improve the infrastructure to promote technological innovation and upgrade industries, which are prerequisites for economic development.2. infrastructure: 基础设施；prerequisite: 前提。So, the core issue for an economy’s long-term development is to straighten out the relationship between the market and the government.

In his bookAn Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith described the market as an invisible hand, and remarked that “every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command…and of which the produce is likely to be of the greatest value,3. An Inquiry into the Nature and Causes of the Wealth of Nations (The Wealth of Nation):《国民财富的性质和原因的研究》（简称《国富论》），英国经济学家亚当·斯密著，于1776年出版；invisible hand: 看不见的手，这里指“市场”；exert:竭力，努力；employment:用途。every individual,it is evident, can in his local situation judge much better than any statesman or lawgiver can do for him”. And he further stated that “according to the system of natural liberty, the sovereign has only three duties to attend to;4. natural liberty: 自然自由制度；sovereign: 君主。… firstly, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing and exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works, and certain public institutions, which it can never be for the interest or any individual, or small number of individuals to erect and maintain; because the pro fit could never repay the expense to any individual, or small number of individuals, though it may frequently do much more than repay it to a great society ”.

From the economic theory of Adam Smith, we find out the invisible hand, the market,plays a role of monitoring and decision making and the government is responsible for security of the society. In terms of development economics, the economies that failed did not handle well the relationship between the market and the government. Some of those economies made the role of the market low and the role of government supreme (in resource allocation5. resource allocation: 资源分配。). The invisible hand of the market was not allowed to function, or play the signi ficant role, but ignored only to generate nothing visible.

Since 1949, China’s economic development has witnessed a rough path. In China, for quite a long time, the idea of market had been a taboo associated with capitalism. Even after the opening up in 1978, the country had struggled to de fine the market and some dogmatists still questioned whether socialism could accommodate the market economy.6. de fine: 使明确；dogmatist:独断家。The invisible hand of Adam Smith was completely invisible. It was not until the 14th CPC National Congress held in 1992 that a socialist market became a consensus7. consensus: 共识。, and at that time the market played a “basic” role in resource allocation. Over the past two decades, the market has played a bigger role in China’s economy, giving the invisible hand some free space. But that’s not enough. Sometimes the government still intervened too much in capital employment; prices and investment decisions have been made predominantly by the government,8. intervene: 干预；predominantly:占主导地位。which led to high administrative costs, low economic ef ficiency and inevitable corruption. In the 3rd Plenary Session of the 18th CPC Central Committee9. The 3rd Plenary Session of the 18th CPC Central Committee: 十八大三中全会。held in Nov. 2013, a consensus was reached that the market should start to play a“decisive” role in resource allocation. The change of the market’s role from “basic”to “decisive” in the economy is very signi ficant. This will help China shift from an investment-led economic model to ef ficiency-driven model, unleashing new growth potential, enhancing the vitality of the economy, and injecting new momentum into China’s long-term economic growth.10. unleash: 释放；momentum:势头。This invisible hand, the market, will eventually be seen visible, generating positive results for the country’s economy.

To achieve the success of the market’s role transition from “basic” to “decisive”,a series of economic reform, the central focus of overall reform, will be pushed forward in the coming years. While China aims to achieve “decisive results” in its“comprehensively deepening reform” by 2020, the market-oriented reform is under way.As long as China keeps holding on to the market, and pushes forward the reforms with determination, the invisible hand would be expected to bring visible results.