section_path: Government
section_name: Government
paragraph_text: Government
  
  China engages in state-led investment and industrial policy and with a significant state-owned enterprise sector.: 11 The Chinese Communist Party (CCP) describes China's economic system as the socialist market economy. To guide economic development, the Chinese central government adopts five-year plans that detail its economic priorities and essential policies. The fourteenth five-year plan (2021–2025) is currently being implemented, placing an emphasis on consumption-driven growth and technological self-sufficiency while China transitions from being an upper middle-income economy to a high-income economy.
  
  The public sector plays a central role in China's economy. This development is also in line with the planning goals of the Chinese central government to achieve the Two Centenaries, namely the material goal of China becoming a moderately prosperous society in all respects by 2021 and the modernization goal of China becoming a "strong, democratic, civilized, harmonious and modern socialist country" by 2049, the 100th anniversary of the founding of the People's Republic. China retains state control over the commanding heights of the economy in key industries like infrastructure, telecommunications, and finance despite significant marketization of the economy since reform and opening up.: 20 Specific mechanisms implementing government control of the commanding heights of the economy include public property rights, pervasive administrative involvement, and CCP supervision of senior managers.: 20
  
  The state is more likely to intervene in areas where the prices of goods and services are socially and politically sensitive.: 105 For example, China's government intervenes more actively in the commercial banking sector than in private equity, where significantly fewer households participate.: 100 The state's involvement in the allocation of finance, contracts, and resources facilitates Chinese government efforts to minimize the effects of market volatility.: 3
  
  Local governments' level of authority and autonomy in economic decision-making is high, and they have played a major role in national economic development.: 1 Local governments may also offer incentives or subsidies to attract business.: 41 One common tax incentive is "three tax-free and three half-tax", through which businesses can be allowed not to pay corporate income tax for their first three years of operation, and paying half rate for the next three years.: 41
  
  China engages in state-led investment and industrial policy and with a significant state-owned enterprise sector.: 11 The Chinese Communist Party (CCP) describes China's economic system as the socialist market economy. To guide economic development, the Chinese central government adopts five-year plans that detail its economic priorities and essential policies. The fourteenth five-year plan (2021–2025) is currently being implemented, placing an emphasis on consumption-driven growth and technological self-sufficiency while China transitions from being an upper middle-income economy to a high-income economy.
  
  The public sector plays a central role in China's economy. This development is also in line with the planning goals of the Chinese central government to achieve the Two Centenaries, namely the material goal of China becoming a moderately prosperous society in all respects by 2021 and the modernization goal of China becoming a "strong, democratic, civilized, harmonious and modern socialist country" by 2049, the 100th anniversary of the founding of the People's Republic. China retains state control over the commanding heights of the economy in key industries like infrastructure, telecommunications, and finance despite significant marketization of the economy since reform and opening up.: 20 Specific mechanisms implementing government control of the commanding heights of the economy include public property rights, pervasive administrative involvement, and CCP supervision of senior managers.: 20
  
  The state is more likely to intervene in areas where the prices of goods and services are socially and politically sensitive.: 105 For example, China's government intervenes more actively in the commercial banking sector than in private equity, where significantly fewer households participate.: 100 The state's involvement in the allocation of finance, contracts, and resources facilitates Chinese government efforts to minimize the effects of market volatility.: 3
  
  Local governments' level of authority and autonomy in economic decision-making is high, and they have played a major role in national economic development.: 1 Local governments may also offer incentives or subsidies to attract business.: 41 One common tax incentive is "three tax-free and three half-tax", through which businesses can be allowed not to pay corporate income tax for their first three years of operation, and paying half rate for the next three years.: 41
  
  China engages in state-led investment and industrial policy and with a significant state-owned enterprise sector.: 11 The Chinese Communist Party (CCP) describes China's economic system as the socialist market economy. To guide economic development, the Chinese central government adopts five-year plans that detail its economic priorities and essential policies. The fourteenth five-year plan (2021–2025) is currently being implemented, placing an emphasis on consumption-driven growth and technological self-sufficiency while China transitions from being an upper middle-income economy to a high-income economy.
  
  The public sector plays a central role in China's economy. This development is also in line with the planning goals of the Chinese central government to achieve the Two Centenaries, namely the material goal of China becoming a moderately prosperous society in all respects by 2021 and the modernization goal of China becoming a "strong, democratic, civilized, harmonious and modern socialist country" by 2049, the 100th anniversary of the founding of the People's Republic. China retains state control over the commanding heights of the economy in key industries like infrastructure, telecommunications, and finance despite significant marketization of the economy since reform and opening up.: 20 Specific mechanisms implementing government control of the commanding heights of the economy include public property rights, pervasive administrative involvement, and CCP supervision of senior managers.: 20
  
  The state is more likely to intervene in areas where the prices of goods and services are socially and politically sensitive.: 105 For example, China's government intervenes more actively in the commercial banking sector than in private equity, where significantly fewer households participate.: 100 The state's involvement in the allocation of finance, contracts, and resources facilitates Chinese government efforts to minimize the effects of market volatility.: 3
  
  Local governments' level of authority and autonomy in economic decision-making is high, and they have played a major role in national economic development.: 1 Local governments may also offer incentives or subsidies to attract business.: 41 One common tax incentive is "three tax-free and three half-tax", through which businesses can be allowed not to pay corporate income tax for their first three years of operation, and paying half rate for the next three years.: 41