For what should be changed, Xi has demanded firm actions, urging creating conditions for reform even when they do not exist yet. The must-do tasks included eliminating all drawbacks that restrict the vitality of business entities and hinder the full play of the market.
With unprecedented scope, scale and intensity, Xi's reforms have covered economic, political, cultural, social, ecological and Party building fields.
He has developed a methodology for reform in the new era: "properly handling the relationships between emancipating the mind and seeking truth from facts, between advancing as a whole and making breakthroughs in key areas, between top-level design and crossing the river by feeling the stones, between being bold and maintaining a steady pace, as well as balancing reform, development, and stability."
He has stressed pursuing reform in a systematic, holistic, and coordinated way and respecting the pioneering spirit of the people. Officials have also been told to "establish the new before abolishing the old" and ensure proper timing and intensity of reform to good effect.
"He corrected the mentality of measuring the success of development simply by GDP growth and enabled the reform to truly touch the interests of some people," said an official from Shaanxi.
He recalled that Xi had issued six instructions to crack down on illegal villa construction by officials in collusion with businesses in the nature reserves of the Qinling Mountains. It reflected the local resistance encountered by the reform in the ecological field back then.
Xi has been pushing through reform in adversity and had to break the blockades of vested interests. "We need the courage to 'venture into the mountain despite knowing full well there are tigers' and continuously move the reform forward," he said.
Around the year when Xi became the general secretary, vote-buying corruption in the election of lawmakers or Party officials occurred in the provinces of Liaoning, Hunan and Sichuan.
"Corrupt officials allowed bribe-paying enterprises to illegally obtain projects or manipulate the market," said a local official, citing concerns over the business environment in the rustbelt northeastern provinces then.
Xi initiated an unprecedented anti-corruption "storm." The fight against corruption is beneficial for purifying the "political ecosystem" as well as the "economic ecosystem," and is conducive to straightening out the market order and restoring the market to what it should be, he said.
The "zero-tolerance" anti-corruption campaign continues to roar. In 2023, it made waves across sectors, including finance, grain, healthcare, semiconductors, and even sports.
Hundreds of high-ranking government officials, bank executives and hospital directors, even figures like the president of the Chinese Football Association and former head coach of the national men's football team, were investigated or indicted.
The revelations, particularly in the football sector, were shocking -- bribery could determine the outcome of matches, undermining market-based fair competition.
Xi has been focused on reshaping the "competition mechanism" through reform. He advocated the necessity of reforming the Party, which has been in existence for over a century, calling for "the most thorough self-revolution."
Under his leadership, a full and rigorous Party self-governance system was built, and a sound system of Party regulations has taken shape. He improved the inspection system and established the national supervision system, "confining power to an institutional cage."
He also initiated an unprecedented reform of the Party and state institutions to "address major and difficult issues drawing widespread attention."
This reform further dismantled vested interests. Xi has called for the resolve to "offend a few thousand instead of failing the 1.4 billion Chinese people."
He propelled the Party's self-revolution to guide social change. The Party has taken the initiative to eliminate institutional deficiencies in social development to unlock productive forces, as explained by Liu Bingxiang, a professor at the Party School of the CPC Central Committee.
In this regard, Xi has advocated fully advancing law-based governance, striving to solve the long-standing problems of power outweighing the law and personal relationships trumping legal principles.
He once lashed out at the phenomenon where "money can buy exemption from punishment and even buy life." On another occasion, he said: "The socialist market economy is an economy based on credit and the rule of law."
He has instructed the formulation and revision of a series of laws, including the Anti-Monopoly Law, which provided the legal basis for the fair competition review system.
The legal system for intellectual property rights was also improved. In a typical case in 2020, U.S. basketball legend Michael Jordan won a lawsuit in Shanghai, with a Chinese company ordered to cease using "Qiao Dan," the Chinese translation of Jordan, in its name and product trademarks.
Therefore, Xi's reforms have not only led to economic transformation. He has asserted that the essence of modernization lies in the modernization of people. Fostering "cultural confidence and national pride" among the Chinese people has become a key objective of the reform.
In 2012, Xi incorporated "cultural confidence" into the report to the 18th CPC National Congress. He later integrated this concept into the "Four Confidences" of socialism with Chinese characteristics, describing cultural confidence as a "more fundamental, deeper, and more enduring force."
Xi's reforms also signify a reworking of Marxism to adapt to the new era, integrating its basic tenets with China's specific realities and fine traditional culture. As a result, China's reforms have taken on fresh philosophical significance.
In his 2017 New Year Message, Xi stated that "the main framework of reforms, resembling the 'four beams and eight pillars' of a house, has been essentially established in various fields." For those acquainted with traditional Chinese architecture, this signifies that the house has taken shape and can be further perfected.
Xi has directed reforms toward an overarching goal: upholding and improving the system of socialism with Chinese characteristics and modernizing China's system and capacity for governance.
This, undoubtedly, takes a long-term and challenging process to fulfill.
ONLY REFORMERS CAN ADVANCE, ONLY INNOVATORS CAN THRIVE
In the year when Xi took the top office, China's annual economic growth rate dropped below 8 percent for the first time since 1999.
The debt crisis in Europe severely hurt China's foreign trade and real estate regulation dragged down domestic demand. A foreign bank analyst claimed that "China's economy is facing its most critical moment in nearly 30 years."
Xi pointed out that China's economy had entered a new development stage and proposed a new development philosophy featuring innovative, coordinated, green, open and shared growth. He initiated the supply-side structural reform, pushing the economy toward high-quality development and moving to construct a new development pattern.
Addressing officials on the significance of the reform to optimize the supply structure, Xi cited the story of Chinese tourists buying smart toilet seats and rice cookers abroad as an example. At that time, Chinese people were enthusiastic about purchasing a multitude of goods overseas, from luxury items to daily necessities. Meanwhile, a large number of domestic products were struggling to find buyers.
After years of supply-side structural reform under Xi's watch, the quality and competitiveness of Chinese products have improved, many of which have earned international acclaim, spanning from lithium-ion batteries and photovoltaic products to drones. Media have noticed that a growing number of young Chinese consumers are redirecting their interest from imported cosmetics to domestic products.
The reform also tackled the challenge of overcapacity in certain sectors. By the end of 2022, the steel industry had eliminated outdated and excess capacity totaling around 300 million tonnes, exceeding twice the size of the entire crude steel production of India in that year.
To push forward the supply-side structural reform, Xi is leading by example with foresight. A decade ago, most cars on China's roads were foreign-brand gasoline vehicles. In 2014, during an inspection of SAIC Motor, a major Chinese carmaker, he emphasized the significance of developing products that cater to diverse needs and highlighted the importance of new energy vehicles (NEVs) in strengthening China's position in the automotive sector.
In the following decade, Xi became a big fan of electric cars, visiting automotive companies, touring laboratories, and showing great interest in experiencing electric cars.
By the time he visited an NEV company in 2023, the country had already become a global leader in NEV technology. Every three vehicles exported by China included one electric passenger car, and China's NEV production and sales constituted two-thirds of the world's total.
The new energy industry is, in fact, part of Xi's vision of new quality productive forces. The phrase "new quality productive forces" has become a fresh buzzword after Xi talked about it during his recent inspection trips, but he started to promote it much earlier.
Back in the 1970s in the village of Liangjiahe, Xi took the lead in introducing biogas-generating facilities to Shaanxi, allowing villagers to use biogas for lighting and cooking, replacing the traditional way of burning wood. This early initiative can be considered an example of leveraging new quality productive forces during that time.
In 2024, developing new quality productive forces was written into the government work report for the first time. This is widely believed as the recognition that the economic growth model primarily driven by low-cost labor, extensive yet inefficient investment, external demand and excessive resource consumption can no longer be sustained, and China must actively cultivate new technologies, new business models and future industries to enhance the quality and efficiency of development.
"The concept has provided fresh hope and impetus for China to speed up its economic transformation," said a column article published in the South China Morning Post.
Xi believes that to develop new quality productive forces, it is imperative to further deepen reforms to boost sci-tech innovation.
He likened China's lack of strong innovation capability to the "Achilles' heel" of an economic giant. New quality productive forces align with Xi's earlier vision of an innovation-driven development strategy.
"Only reformers can advance, only innovators can thrive, and only those who reform and innovate will prevail," Xi stressed.
Under his guidance, a slew of pro-innovation measures were rolled out to encourage enterprises to intensify research and development, apply sci-tech research achievements in the real world, and refine the management of major sci-tech projects. He also pushed for the establishment of a new system for mobilizing resources nationwide to make key technological breakthroughs.
The effects are evident, with China's ranking in the Global Innovation Index, published by the World Intellectual Property Organization, jumping from 34th in 2012 to 12th last year.
Data issued in 2023 showed that China in 2022 overtook the United States for the first time as the No. 1 ranked country or territory for contributions to research articles published in the Nature Index group of high-quality natural science journals.
Telecom giant Huawei successfully launched its new high-end smartphones last year, which demonstrated the limited effects of U.S. "extreme pressure" on Chinese high-tech firms.
Nevertheless, there is yet much work to be done. Xi has cautioned that "basic research is the source of sci-tech innovation. Although China has made significant progress in basic research, the distance with the international advanced level remains evident."
He has called for further support for basic research and original innovation, with a focus on ground-breaking and cutting-edge technologies.
UNLEASHING THE POWER OF THE MARKET
When Xi assumed the Party's top post, two decades had passed since the concept of building a socialist market economy was introduced.
However, doing business remained a challenging endeavor. In 2014, a lawmaker attending local "two sessions" revealed that a single investment project, from acquiring land to completing all administrative approval procedures, required more than 30 government approvals and over a hundred stamps. The entire process took a minimum of 272 working days.
Xi strongly opposes cumbersome government approvals. While working in Fuzhou of Fujian, he pioneered a mechanism that enabled all procedures for investment project approval to be completed in a single building.
As the country's top leader, he advocated that "the market plays the decisive role in resource allocation and the government plays its role better."
Over the years, the State Council has canceled or delegated to lower-level authorities the power of administrative approval for over 1,000 items and slashed the number of investment items subject to central government approval by over 90 percent.
"Let the vitality that creates wealth burst forth, and let the power of the market be fully unleashed," said Xi.
The results of the reforms are remarkable, as China was ranked by the World Bank as one of the top 10 economies with the most notable improvement in the business environment for two years in a row.
In January 2019, construction started for Tesla's Shanghai Gigafactory, and the automaker started delivering the first batch of China-made Model 3 electric cars built at the factory in December 2019, a pace of development praised by Tesla CEO Elon Musk.
