By Hou Yongzhi, Liu Yunzhong, Sun Zhiyan and He Jianwu, coordinated regional development and allocation of productive forces research team, Research Department of Development Strategy and Regional Economy, Development Research Center of the State Council (DRC)

Research report No 109, 2014 (Total No 4608)

Summary:

Comprehensive measures are needed to optimize the allocation of productive forces in China. The measures include: improving the financial transfer payment system and creating a balance of public services provided by local governments; narrowing the scope of industrial policies and establishing an industrial early warning platform by using modern information technologies; improving the resource pricing mechanism and income distribution system to guarantee fairness; building a strict and tight government regulation and supervision system; changing the layout of "low-level" competition among regions; improving the financial and fiscal discipline mechanism to control excessive debt of local governments to prevent financial risks; innovating the government performance appraisal mechanism; giving guidance to local governments for innovative development; building a nationwide social security system; making preferential, equitable and integrated basic public service a top priority of public policies; standardizing industrial park construction and giving full play to the positive role of SOEs in allocation of productive forces; and establishing strict environmental standards and an effective environmental supervision system.