A meeting reviewing the reform of Communist Party of China (CPC) and state institutions was held recently in Beijing on July 5. President Xi Jinping attended the meeting and delivered an important speech. He stressed that deepening the reform of CPC and state institutions is a systematic and holistic effort of restructuring of the Party and state's organizational structure and management system. In his speech, Xi listed several priorities for the future:

1. To promote the reform of the central and local institutions at various levels.
2. To reconstruct and improve the leadership system, governance system, armed forces system and group work system of CPC.
3. To systematically enhance the party's leadership, the government execution, armed forces combat effectiveness, and group organization's vitality.

4. To establish a preliminary framework on the functional system of CPC and state institutions that meets the requirements of the new era.

These priorities provide a strong organizational guarantee for improving and developing a socialist system with Chinese characteristics and advancing the modernization of China's governance system and governance capacity.

Specifically, the deepening reform has managed to achieve concrete results in five aspects:
1. Strengthening the effective implementation of CPC's overall leadership and managed to improve the institutional function system of CPC in maintaining a centralized and unified leadership.
2. CPC and state institutions are performing their duties more smoothly and efficiently, and the setup and function allocation of all types of institutions are better suited to the need to coordinate the overall layout of the five-pronged initiative and the four-pronged comprehensive strategy.
3. The establishment and function allocation of major institutions in provinces, cities, and counties are basically in line with the central government. A smooth and dynamic working system from the central to the local level is constructed.
4. Smooth progress was made in cross-military reforms.
5. Simultaneously carried out a reform of relevant institutions, and the overall effect of reform was further enhanced.
According to the official summary, the following important experiences have been gained in deepening reform:
1. Adhere to CPC's overall leadership over institutional reform;
2. Adhere to the establishment of a more effective mechanism;
3. Adhere to the promotion of institutional functions' optimization;
4. Adhere to coordinate reform at the central and local levels;
5. Adhere to the unity and coordination of reform and the rule of law;
6. Adhere to carry out ideological and political work throughout the reform process.
The meeting proposed that the next step will be to fully deploy and continue to improve the functional systems of CPC and state institutions.

China is a big country with huge differences in its internal development. Nowadays, China is facing an environment of drastic changes in the pattern of globalization. In this context, China's deepening reform is indeed a systematic project with elements of integrity, system, and complexity. At present, the pattern of deepening reform has just been established. The problems facing the future will grow more complex in nature and the challenges in reform are even greater. As pointed out by the Central Reform Conference, the reconstruction of the organizational structure and the adjustment of institutional functions have only solved the superficial problems. There's still a lot of work to do to further enhance the functional system of CPC and state institutions.

From the perspective of independent public policy research institutions, China's deepening reform will face a series of challenges in the future:

Firstly, deepening reforms need to be extended from the organizational reform of CPC and the state to cover a wider scope. So far, the reform has achieved some success, but we must also see that China will face a completely different new situation and new changes in the future - the globalization has undergone tremendous changes, China's economy needs to be transformed and upgraded, China's rule of law has to take a new step, and China has to participate in global development and competition in the coming decades. In this context, the current progress in the reform is insufficient. China's new round of reforms should focus on the three dimensions, i.e., the "two-centuries goals", the "three-step development strategy" proposed at the 19th National Congress, and the new stage of global co-opetition. In the future reform, continuing to deepen economic reforms, vigorously promoting market-oriented reforms and the reform of the rule of law are necessary.

Secondly, deepening reform in the future requires more social and local participation. One of the success factors of China's reform and opening up over the past four decades is the support and participation of the whole society and the active participation of local governments at all levels. Generally speaking, the deepening reform since the 18th National Congress mainly focused on reform and reconstruction within the ruling system of both the Party and government. However, it must be acknowledged that this round of reform has strong "top-down" characteristics. The reform is mainly promoted at the top level, while the middle and lower levels are not spontaneously involved. Moreover, due to the lack of incentive mechanism, the deepening of the reform has become passive participation in implementation. In short, the society and the market have not involved in the reform, and the participation of local governments at all levels was relatively limited. To deepen the reform in the future, it is necessary to expand the participation of local governments and stimulate the interest and enthusiasm of local governments to participate in the reform. At the same time, it is also necessary to encourage local governments' breakthroughs and innovations in reform and to accommodate problems and mistakes made in local reforms.

Thirdly, market-oriented reforms should occupy an important position in deepening reform. From historical experience, market-oriented reforms in the economic field are the main driving force for China's reform. China's practice of reform and opening-up to date has proved several points: (1) China's most successful reforms are market-oriented economic reforms; (2) economic reforms can evoke the nation's greatest common denominator, maintain the economy and the livelihood of the people, which are also core objectives of the CPC and the government; (3) The market-oriented reform is positively related to China's overall development. When the market-oriented reforms are progressing, China's development speed would be rapid and social contradictions would be less. On the contrary, when the market-oriented reforms are slow or even stagnant, China's development often enters a period of contradictory and hiccups in reforms. Therefore, market-oriented reforms must be promoted to stimulate the market, private capital, and local enthusiasm. It is not an exaggeration to say the success of market-oriented reforms will decide the fate of the overall reform in China.

Fourthly, the reforms of mechanism and institutions are intimately linked with each other. In the past reform processes of China, the initial reform of the mechanism had seen some positive outcomes, like the reform of rural joint production contracting. After this became stagnant at a certain stage, it was necessary to carry out institutional reforms in order to create more "reform dividends". In recent years, China's past reform dividends have been diminishing, and the areas for improvement have also been rectified. What is left are mostly challenging institutional reforms. With the deepening of economic development and opening-up to the outside world, China's economic and social systems are changing and with it the demand for institutional reform is increasing. At the same time, the acceptance of reform and the ability to withstand the cost of reforms are also increasing. These makes the basis for deepening institutional reform in the future.

Fifthly, the deepening of reforms should focus not just on China, but the world as a whole as well. We believe that the acts of deepening reform and increasing opening-up are inseparable. Therefore, China should consider the new changes in globalization, adapt to the international situation, and learn from the achievements of more advanced global communities. China should avoid continuing the problems of its own development, as well as learn from major problems in the development of other countries in other from happening to itself. From a global perspective, China's deepening reforms in the future may need to strengthen its global positioning, and it should focus on new situations and a new stage of global co-opetition.

Final analysis conclusion:

Deepening the reform of CPC and state institutions is a major event. In the future, China's reforms need to be expanded beyond institutional reforms. Market reforms should be intensified and institutional reforms in various fields should be accelerated. In addition to that, the development space should be expanded. At the same time, market and social forces should be encouraged to involve themselves more in deepening reforms, bringing back an environment similar to that of the past where all parties worked together towards the common goal of development.