1. The Evolution and Timeline of Policy Formulation

my country’s reform of market-oriented allocation of factors of production has undergone a long historical evolution:

‌1978-1991 : The initial stage of

The ” contract responsibility system ” started in Xiaogang Village, Fengyang County, Anhui Province , established a household contract responsibility system and gave farmers the right to independently manage their land.

Rural labor mobility began to ” loosen ” , and township enterprises emerged rapidly. In 1992 , the output value of township enterprises accounted for more than 60% of the total rural social output value.

The rural financial system has been initially restructured, but capital outflow remains a prominent issue.

‌1992-2012 : Marketization exploration stage

Restrictions on labor mobility have been gradually relaxed, and the number of migrant workers has increased from less than 2 million in the early days of reform and opening up to 260 million in 2012 .

The capital market began to be established, but the problem of factor market segmentation still exists

‌2013-2020 : Top-level design stage

The 19th CPC National Congress report in 2017 clearly stated that ” economic system reform must focus on improving the property rights system and the market-based allocation of factors of production .”

In 2020 , the CPC Central Committee and the State Council issued the “Opinions on Building a More Perfect System and Mechanism for Market-Oriented Allocation of Factors”, which laid the foundation for the reform.

‌2021-2025 : Comprehensive reform pilot phase

The 2021 Central Economic Work Conference and the State Council Government Work Report proposed to launch a pilot program for comprehensive reform of the market-based allocation of factors.

The 2022 “Overall Plan for the Pilot Comprehensive Reform of Market-Based Allocation of Factors” was released, clarifying the ” three-step ” timetable:

First half of 2022 : Complete the layout of pilot areas

2023 : Achieve major breakthroughs in key areas

2025 : basically complete the pilot tasks

A comprehensive reform pilot covering 10 regions will be officially launched in September 2025 , and the Changsha-Zhuzhou-Xiangtan area of ​​Hunan Province will be selected.

II. Background and Significance of Policy Formulation

Policy Background

Factor market development lags behind : China’s commodity and service markets have achieved market pricing, but the construction of the factor market system is relatively lagging and underdeveloped.

Economic transformation needs : China’s economy is shifting to a factor-intensive and innovation-driven development model, which requires innovative factor allocation methods.

Significant regional : The marketization levels of different factors and regions vary, and reforms need to be tailored to local conditions.

Policy Implications

Economic level :

Remove obstacles to the flow of factors and optimize resource allocation efficiency and maximize benefits

Improve total factor productivity and inject new impetus into high-quality development

Social level :

Promote the free flow of labor and improve the equalization of public services

Promote the transformation of technological achievements and stimulate innovation and entrepreneurship

Institutional level :

Providing a model for improving the national factor market system

Promoting a better combination of effective markets and capable governments

III. Impact of Policies on the Future Economy and Society

Economic impact

Improve resource allocation efficiency : Guide factors to converge toward advanced productive forces through market-based means, thereby increasing total factor productivity.

Stimulating market vitality : Unleashing more resource factors and market development space for small and medium-sized enterprises

Promoting industrial upgrading : Promoting the deep integration of new factors such as technology and data with traditional industries

Social Impact

Freer labor : Deepen household registration system reform and smooth the channels for social mobility of labor and talent.

Public services are more balanced : promote the linkage between basic public services and permanent residents, and improve the quality of urbanization

The innovation : improve the technical skills evaluation system and increase the introduction of overseas talents.

4. Key favorable policies in Hunan

As one of the pilot areas, the Changsha-Zhuzhou-Xiangtan region in Hunan Province will have significant development opportunities in technology, industry, human resources, and capital.

Technical elements

Optimization of scientific and technological :

Support the development of key core technologies in the seed industry

Encourage industry-leading enterprises to take the lead in establishing innovation alliances

Comprehensively implement the ” lump sum system ” for the use of scientific research funds

Accelerating the transformation of scientific and technological :

Launch a pilot program to grant scientific researchers ownership or long-term use rights of their scientific and technological achievements

Accelerate the construction of the National Technology Transfer Talent Training Base ( Hunan )

Strengthening intellectual property :

Explore local legislation on intellectual property rights

Build a comprehensive service platform for intellectual property rights and scientific and technological achievements transactions

Industrial factors

Innovation in land :

Explore ways to give pilot areas greater autonomy in land allocation

Promote the adjustment of surplus indicators linked to the increase and decrease of construction land within Changsha, Zhuzhou and Xiangtan

Optimization of industrial :

Explore mixed industrial land supply and stratified development

Improve the multi-subject supply system for industrial land

human Resources

Unimpeded talent :

Deepen the reform of the household registration system

Improve the technical skills evaluation system

The business :

Implementing the fair competition review system

Deepen the ” One License for All ” reform of enterprise-related approval services

Capital Factor

Deep integration of technology :

Explore the knowledge value credit loan model

Establish a five-in-one technology investment system consisting of ” investment, loans, rewards, subsidies and insurance “

Improvement of capital :

Reform and improve equity investment guidance funds

Support regional equity market innovation

V. Development Trends and Outlook

System integration : Future reforms will focus more on the coordinated advancement of reforms in various sectors, improving the efficiency of the combined allocation of different factor resources.

Digital empowerment : The market-oriented allocation of data elements will become an important direction, promoting the establishment of data circulation rules and transaction mechanisms.

Regional specialization : Each pilot region will explore differentiated areas based on its own industrial characteristics. For example, Hunan will focus on breakthroughs in seed industry innovation, technology transformation, and other areas.

Institutional achievements : By 2025 , it is expected that a number of replicable and scalable institutional achievements will be formed, providing a model for the construction of national factor markets.

The pilot program for comprehensive reform of the market-based allocation of factors of production is a key initiative in deepening China’s economic restructuring. By removing institutional barriers, it will effectively improve resource allocation efficiency and inject new impetus into high-quality economic development. As one of the pilot areas, the Changsha-Zhuzhou-Xiangtan region in Hunan Province will enjoy significant development opportunities in technology, industry, human resources, and capital, providing strong support for the transformation and upgrading of the regional economy.