(执笔:陈启清,来源:人民网,有部分增删。文章仅代表作者观点,如来源标注有误请告知,我们及时予以更正/删除)
Seven major production factors
---Labor, capital, land, knowledge, technology, management, data
Highlighting the importance of intangible assets
At the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, the principle of "distribution according to work as the main body and coexistence of multiple distribution methods" was established as the basic socialist economic system. At the same time, it was further pointed out that "a sound mechanism should be established to evaluate the contribution of production factors such as labor, capital, land, knowledge, technology, management, and data by the market, and to determine the remuneration based on contribution". This is a continuous deepening of understanding of the distribution system and the composition of production factors. Improving this system has extremely important theoretical significance and practical value in mobilizing the enthusiasm, initiative, and creativity of various production factors to participate in production, allowing the vitality of various production factors to burst out, and allowing all sources of creating social wealth to fully flow.
Theoretically answered two major questions
As early as 1997, the 15th National Congress of the Communist Party of China proposed "combining distribution according to work and distribution according to production factors, adhering to the principle of prioritizing efficiency and balancing fairness". However, for a long time, the issues of which production factors can participate in distribution and how to distribute income according to production factors have not been very clear in theory. The Fourth Plenary Session of the 19th Central Committee of the Communist Party of China proposed the "sound mechanism for evaluating the contribution of labor, capital, land, knowledge, technology, management, data and other production factors by the market and determining rewards based on their contributions." Starting from the actual development of China's productive forces, we scientifically grasp the new trends and characteristics of economic development and theoretically answer the above questions, pointing out the direction for various production factors to participate in distribution.
One is to clarify which production factors participate in distribution. Socialist society implements the principle of distribution according to work, and labor is naturally the main factor of production that participates in distribution. After the reform and opening up, the composition of ownership in China has gradually diversified, naturally requiring diversified distribution methods. In order to encourage other production factors to participate in production, China has gradually established a distribution system with distribution according to work as the main body and multiple distribution methods coexisting, encouraging a combination of distribution according to work and distribution according to production factors. The Decision of the Central Committee of the Communist Party of China on Several Issues Concerning the Establishment of a Socialist Market Economy System, passed at the Third Plenary Session of the 14th Central Committee of the Communist Party of China, proposes to "allow personal capital and other production factors to participate in income distribution", clarifying the right of personal capital as a production factor to participate in distribution. The Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning the Reform and Development of State owned Enterprises, passed at the Fourth Plenary Session of the 15th Central Committee of the Communist Party of China, proposes the method of implementing the remuneration system for members of the board of directors, management, and other levels in accordance with their respective responsibilities and contributions, and recognizes management as a factor of production to participate in income distribution. On this basis, the report of the 16th National Congress of the Communist Party of China further pointed out that "the principle of participating in the distribution of production factors such as labor, capital, technology, and management based on their contributions should be established, and the distribution system with distribution based on labor as the main body and multiple distribution methods coexisting should be improved". Labor, capital, technology, and management should be clearly listed as the production factors participating in distribution. The Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening Reform, passed at the Third Plenary Session of the 18th Central Committee of the Communist Party of China, proposes to "improve the compensation mechanism determined by the factor market of capital, knowledge, technology, management, and other factors", further incorporating knowledge as a production factor. The Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Adhering to and Improving the System of Socialism with Chinese Characteristics, Promoting the Modernization of the National Governance System and Governance Capacity, which was reviewed and passed at the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, added data as production factors for the first time, forming a complete system of production factors. Labor, capital, and land are quantitative production factors that meet the needs of China's high-speed economic growth stage; Knowledge, technology, and management are quality oriented production factors, reflecting the investment requirements of high-quality development for production factors; Data is a requirement for the digitization process of economic activities, reflecting the up-to-date distribution system in the context of the rapid development of the digital economy.
The second is to clarify how to allocate income according to production factors. Labor, capital, land, knowledge, technology, management, data and other production factors need to participate in distribution, but how do production factors participate in distribution? What criteria are used to determine the proportion of different production factors in distribution? If these problems are not solved properly, they may lead to unfair distribution and widening income gap, which will also seriously affect the enthusiasm of production factor owners to participate in production. The 16th National Congress of the Communist Party of China clearly proposed the principle of production factors participating in distribution based on their contributions, which means that the reference for production factors participating in distribution is not the input of factors, but the contribution of factors to value creation. The greater the contribution, the more distribution. But who will determine the contribution of the elements? The Fourth Plenary Session of the 19th Central Committee of the Communist Party of China proposed a "sound mechanism for evaluating the contribution of production factors such as labor, capital, land, knowledge, technology, management, and data by the market, and determining compensation based on contributions", clarifying the mechanism for evaluating contributions by the market. The contribution of factors of production is determined by the market. Owners of various factors of production reflect the scarcity of factors through changes in supply and demand and prices of factors of production in market transactions, and then evaluate the contribution of factors. Which production factor is more scarce, and this factor has a greater say in income distribution. The market evaluates it highly, contributes more, and correspondingly, its distribution may increase. For example, in recent years, labor has been relatively scarce, and the market's contribution to labor has been highly evaluated. The proportion of labor remuneration in national income distribution is increasing. As China's economy shifts towards a stage of high-quality development, the demand for resources such as knowledge, technology, and management increases, and the scarcity of these elements increases. The market's evaluation of their contribution is higher, and their proportion in income distribution will correspondingly increase. In recent years, China has implemented a distribution policy guided by increasing the value of knowledge, increased the proportion of scientific and technological achievements transformation benefits shared by researchers, and emphasized the use of entrepreneurial spirit, which is a reflection of this trend.
Improve the mechanism from three aspects
How to improve the mechanism by which production factors such as labor, capital, land, knowledge, technology, management, and data are evaluated by the market and compensated based on their contributions? You can start from three aspects:
Firstly, clarify the ownership of property rights for production factors such as labor, capital, land, knowledge, technology, management, and data, and implement a strict property rights protection system. Marx once pointed out that "a commodity cannot go to the market on its own and cannot be exchanged on its own. Therefore, we must find its guardian, the owner of the commodity." Like a commodity, without an owner, the factors of production cannot enter the exchange and then be put into production. Therefore, clarifying property rights and protecting property rights are prerequisites for production factors to participate in production and obtain income. The participation of production factors in income distribution is actually the distribution of income among different factor owners. We need to implement the strictest property rights protection system, improve relevant laws and regulations, and form a clear institutional arrangement that defines the ownership, possession, control, use, income, and disposal of property rights, and equally protect all types of property rights in accordance with the law. We need to optimize the allocation of property rights and promote the reform of the property rights system. We need to highlight the protection of various types of intellectual property rights, improve the intellectual property ownership system that is conducive to encouraging innovation, and increase compensation for intellectual property infringement damages.
Secondly, build a unified, open, and orderly competitive factor market. Evaluating the contribution of factors by the market means that there must be a comprehensive factor market. Since the reform and opening up, China has basically formed a relatively sound commodity market, but the development of the factor market is relatively lagging. There are many phenomena such as urban-rural segmentation, regional segmentation, price distortion, and market barriers in the factor market. To this end, the first step is to build a nationally unified factor market. We need to break the urban-rural division, establish a unified labor market and land market for both urban and rural areas, as well as break regional and block divisions, build a unified intellectual property market, break data silos, guide the cultivation of data trading markets, and explore the establishment of a professional manager market. We need to accelerate the clearance and abolition of various regulations and practices that hinder the unified market and the free flow of factors, and promote the free flow of factors. Secondly, we need to promote market-oriented reform of factor prices. Maximize the role of the market in determining prices, and improve the formation mechanism of production factor prices that reflects market supply and demand relationships and resource scarcity.
Thirdly, adhere to a problem oriented approach and improve the mechanism of factor participation in distribution. Improve the mechanism of labor participation in distribution, adhere to the principle of "more for more work, less for less, no for no", and allow different types and intensities of labor to receive different labor remuneration, increase the proportion of labor remuneration in initial distribution, and consolidate the main position of distribution according to work. We will improve the mechanism for capital participation in distribution, promote capital market reform, innovate financial products, improve the mechanism for matching returns and risks, and allow funds with different maturities and risks to obtain reasonable returns and risk compensation. Improve the mechanism for land participation in distribution and establish a sound mechanism for distributing land value-added benefits. Improve the mechanism for knowledge participation in distribution, implement distribution policies oriented towards increasing knowledge value, and construct an income distribution mechanism that reflects the increase in knowledge value. This will create a virtuous cycle in society where knowledge creates value and value creators receive reasonable returns. Improve the mechanism for technology participation in distribution, encourage researchers to obtain reasonable income through the transformation of scientific and technological achievements, and establish and improve mechanisms for implementing equity, options, and dividend incentives for researchers. Improve the mechanism of management participation in distribution, highlight the reform of the salary system in state-owned enterprises, coordinate the use of medium and long-term incentive measures such as employee shareholding, equity incentives, and equity dividends, and stimulate the vitality of management personnel at all levels. Improve the mechanism for data participation in distribution, establish and improve data ownership, disclosure, sharing, and trading rules, so that data owners can obtain the expected benefits from data usage.
In a word, improving the mechanism that labor, capital, land, knowledge, technology, management, data and other production factors are evaluated by the market and their remuneration is determined by their contributions, which is a scientific decision made by the Party Central Committee to comply with the requirements of high-quality economic development, and is of great significance to promoting high-quality economic development, improving people's income levels, and achieving common prosperity. We need to deeply understand in practice, actively implement and promote based on the actual situation, and continuously promote the maturity and finalization of China's socialist basic economic system.
Extract from the original text of the theory of the seven major production factors:
Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Adhering to and Improving the Socialist System with Chinese Characteristics and Advancing the Modernization of the National Governance System and Governance Capacity
(Adopted at the Fourth Plenary Session of the 19th Central Committee of the CPC on October 31, 2019)
6、 Adhere to and improve the basic socialist economic system, and promote high-quality economic development
(2) Establish a mechanism by which production factors such as labor, capital, land, knowledge, technology, management, and data are evaluated by the market and compensated based on their contributions. We will improve the redistribution and adjustment mechanism primarily through taxation, social security, and transfer payments, strengthen tax regulation, improve the direct tax system, and gradually increase its proportion. Improve relevant systems and policies, and reasonably adjust the distribution relationship between urban and rural areas, regions, and different groups. Emphasize the role of the third distribution and develop social welfare undertakings such as charity
(Author: Chen Qiqing, Source: People's Daily Online, with some additions and deletions. The article only represents the author's viewpoint. If there are any errors in the source labeling, please let us know and we will make timely corrections/deletions.)