Professor Lin Yifu, a noted economist of Peking University, speaks at the BRICS Seminar on Governance in Quanzhou, Fujian Province, on Aug. 17, 2017. [Photo/China.org.cn]

The opening ceremony of a seminar on governance in Quanzhou, Fujian Province on Aug. 17, heard a keynote address from Professor Lin Yifu, a noted economist of Peking University.

He observed that the success of China's development and reform resulted from integration of an "efficient market" and an "effective government," complementing and reinforcing each other. This offered lessons for BRICS and other developing countries to overcome difficulties and challenges on the way ahead.

Lin said most developing countries had not escaped the low or middle income trap, because they had created policies for economic development and transformation on the basis of Western thinking. This had led to failure in balancing government and market.

In contrast, a few countries were enjoying a buoyant economy, having all leveraged the roles of both market and government. Therefore, a country could enjoy high growth only when it adopted a market economy while letting the government perform its due functions.

China has registered an average annual growth rate of 9.6 percent since the reform and opening up policy was initiated in 1979, and stood out as the only emerging economy not suffering a systemic financial crisis. What lay behind this success was a pragmatic and gradual dual-track approach to reform. It involved granting subsidies to SOEs in major capital-intensive industries to maintain economic stability while giving private and foreign companies access to their advantageous industries, ensuring the government's guiding role in the market economy, and eliminating the bottlenecks of hardware and software infrastructure. In this way, China had been able to forge its own competitive advantage.

The success of China's development and reform offered lessons to BRICS and other developing countries. A country should formulate its development and reform strategies on the basis of a comprehensive and objective grasp of its own realities and conditions rather than follow the example of other countries.

The key to China's success was properly using the "market's hand" and the "government's hand," Lin quoted General Secretary Xi Jinping as saying that building an "efficient market" and an "effective government" at the same time was crucial to the success of socialism with Chinese characteristics under CPC leadership.