System Innovation In The Transformation Of Economic Development Patterns Of China

In the early1980s, China launched a market-oriented economic reform whichopened the heavy curtain of institutional innovation. Today, our country has madegreat achievements in the socialist market economic system construction. So far,people’s living level has increased, our comprehensive national strength is greatlyenhanced, and the position in the international society has become more important. Itshould be said that all of these achievements obtained cannot be departed from theinstitutional innovation. Speaking objectively, China’s economic and socialdevelopment is successful seen from overall. However, constrained by the restrictionof people’s bounded rationality and other political, economical and social factors,institutional reform and innovation in there have been some unpredicted outcomes, andalso brought new problems and contradictions. Practice shows that it needs muchfurther institutional innovation to solve and deal with these problems.Guiding with Marxist economic theory, with China’s economic developmentprocess in the institutional change as the main thread, the new institutional economicstheory and method, and some theoretical tolls such as property rights, institutionalchange and state theory were used in these paper to discuss the reasons why it wasdifficult for transformation of the mode of economic development in China based onthe perspective of institutional innovation. It demonstrated that basic role cannot beeffectively played in the market mechanism, in addition to the lagged transformationof government functions and the traditional economic path dependence, are somereasons for why China cannot obtain remarked success in transformation of the modeof economic development. Although more than30years of reform and opening up,our country has rapidly build a socialist market economic structure and thecorresponding economic operation institution, many economic system, policy waslargely invisible in the actual operation,"hold" features is significant. It fully exposedthat the informal institutional innovation adapted to the market economy in ourcountry was promoted lagged.This paper summarized and overviewed the basic principle of institution andinstitutional innovation in the Western economics and Marxism. Base on the further comb about the research of transformation of the mode of economic developmentboth at domestic and overseas, this paper established the theoretical foundation of theresearch. And then, with China’s current economic development in the institutionoperation practice, it pointed out the necessity and urgency of the institutionalinnovation to the change of the mode of economic development in China. Then itanalyzed the main difficulties and restricting factors facing in the process of thetransformation of economy development pattern. For the institutional root ofdifficulty in practicable transformation of economic development pattern, this paperresearched deeply in the government function and market mechanism. It pointed outthat insufficient market main body, slowly development of element market, failuremarket competition mechanism, and lagged construction in market economy are themain factors which restricted the market played its basic role in resource allocation.Meanwhile, the existing economic institution has no ability to solve the result of theinteraction of the soft budget and resources constraint in the process of governmentpursuing to the economic growth, in addition to the cadre’s promotion stimulationmechanism, fiscal decentralization institution reform, the local government of thetransverse competition mechanism and so on, which intensifies the extensiveexpansion mode of economic growth. In addition, as a research paper highlights, thispaper also focused on the restriction of informal institution to the transformation ofthe mode of economic development in China, and pointed out the conflict andblending between the market economic institution in the process of economicdevelopment and the informal institution which with the traditional culture as the core.It also stated that the negative influence of some roots, like mean thinking, hierarchy,obedience consciousness and rule of man rather than rule of the law, to marketeconomic operation. It thought that whether the institutional innovation success lies inwhether the transplanted institutional innovation can be adapted for the fusion of localinformal institution. For the empirical study, this paper analyzed the important role ofinformal in the economic and even the transformation of economic developmentpatterns of Wenzhou Model. It also discussed the boom-bust process of WenzhouModel. It showed that institutional innovation was not once for all but changed withthe economic development level and institutional environment. It also showed thatdegenerative performance in institutional innovation is almost inevitable.Based on the above research, this paper putted forward some suggestions and realization route in the transformation of the mode of economic development in China.In the policy level, this paper held that in the problems of transformation of the modeof economic development, we must continue to deepen the reform, transformgovernment function, and constantly improve our country socialist market economicsystem. In addition, we should also face up to the influence of our traditional cultureon the transformation of the mode of economic development, and then strengthen theinformal institutional innovation and speed up the pace of market culture constructionto adapt for the market economy. In the realization route and promote strategy level,this paper thinks: one is to reduce government intervention behavior to the economicactivity gradually, reduce the administrative examination and approval line andenhance the ability of market economy construction autonomy; second is to speed upthe pace of independent innovation strategy, focus on promoting the motivemechanisms of independent innovation, culture atmosphere and the institutionalenvironment construction; third is in the process of informal institution innovation, togive full play to the guide effect of public opinion, reduce the institution innovationcost of the ideology. In addition, we should focus on strengthening the construction ofthe rule of market economy, give full play to promote and support role in the formalinstitution to informal institution innovation.