Zhou Qiang, head of the Supreme Peopleâs Court, delivers the Supreme Peopleâs Court work report during the third plenary session of the National People's Congress (NPC) at Great Hall of the People in Beijing, China, Monday, March 10, 2014. (AP Photo/Vincent Thian)

BEIJING -- The Fourth Plenary Session of the 18th Party Congress of the Chinese Communist Party, completed last week, decided that modernizing the state governance system and the state's governing capacity will be the general goal of further reform in the near future.

This is of great theoretical and practical significance for China's political development and the entire modernization drive in the future. Theoretically speaking, modernizing the state governance system and the state's governing capacity is an entirely new political idea, and it is an important theoretical sign of the transformation of the CCP from a revolutionary party into a governing party.

Practically speaking, it shows that the CCP has formally incorporated political modernization into the reform agenda. Modernizing state governance will necessitate a change in the relationship between the government, the market and society.

CHANGE WITH CHINESE CHARACTERISTICS

The Chinese government constantly reiterates that it will not slavishly follow the Western political model of multi-party competition, general elections and the separation of powers. At the same time, it stresses political reform, particularly the reform of state governance.

If you look at Chinese politics over the last 30 plus years solely from the Western perspective of multi-party competition, general elections and the separation of the three powers, you could well conclude that nothing has changed. However, if you look at it from the perspective of modernizing state governance, you will discover that Chinese political life has undergone tremendous changes during that time.

We can see enormous changes, for example, in terms of the rule of law, public participation, democratic decision making, social governance, public services, government accountability, political transparency, administrative efficiency, government approval procedures, decentralization and the development of social organizations. There is a clear direction here: from unity to diversity, from centralization to decentralization of power, from the rule of man to the rule of law, from being closed to being open, and from regulatory government to service-oriented government.

The success of China's economic development and social transformation, and its ability to continue its long-term economic development while maintaining basic stability, derives to a large extent from successful reform over the years of China's governance.

A BALANCE BETWEEN STATE, MARKET AND CIVIL SOCIETY

There are three important findings from China's experience of reform to bear in mind in the years ahead.

First, the structural foundation of modern society is the differentiation between the political, economic and civil system.

In pre-modern society, the government, the market and society were intimately integrated; there was no clear boundary between political, economic and social systems; civil society and economic society were obliterated by political society, and the state controlled everything in society. However, after the human race entered the modern age, society began to be segmented into three mutually independent realms: the state system, which has government organizations as its foundation and officials as its main representatives; the market system, which has business organizations as its foundation and business people as its main representatives; and civil society, which has nongovernmental organizations as its foundation and citizens as its main representatives.

The basic function of the modern state is to demarcate boundaries of the powers and responsibilities of the government, the market and society. Its basic mission is to render unto the government what belongs to the government, render unto the market what belongs to the market and render unto society what belongs to society.

Second, the state governance system is a set of institutions and procedures for standardizing the functions of social powers, and safeguarding public order. It includes a set of institutions and procedures for standardizing administrative, market and social conduct.

Correspondingly, government, market and social governance are the three most important sub-systems of a modern governance system. That is to say, a state governance system is a system of institutions made up of the state's administrative, economic and social systems.

Effective state governance requires the answer to three questions: Who governs? How do they govern? And how well do they govern? These three questions pertain to the three main elements of state governance: the governing body, governing institutions and governing tools.

Third, neither the government, the market nor society is omnipotent; it is necessary for them to be complementary and balanced. In pre-modern society, government was effectively omnipotent and its powers were unlimited. However, in modern society, not only is government not omnipotent, but the scope of its powers is also constantly contracting and the constraints civil society and the market system impose on it are constantly increasing.

It is not only the government that is not omnipotent; but also the market and society.

As this situation is prone to result in human error, two things need to be done to overcome failure: one, the government, market and society need to cooperate and use their strengths to compensate for the others' weaknesses; and two, there should be equilibrium among the three.

"State governance fails if the government becomes too powerful and also if it becomes too weak."

State governance fails if the government becomes too powerful and also if it becomes too weak. However, the allotment of powers between the government, the market and society in state governance should be expected to vary between different countries and within the same country at different stages when national conditions differ. Today, in China, the CCP and the government play an overwhelming role in the country's governance.

Stated simply, the ideal of good governance is governance in which public interests are maximized. Its basic characteristic is that the relationships between the state, the market and society are the best they can be so that each segment can coordinate in governing social and political affairs.

However, governments have always been without question by far the most powerful segment of society, and no other can be considered their equal. Therefore, in modern state governance, the government, still plays a larger role than the market and society. In other words, the key to good governance is good government, and if you want to have good governance you must first have good government.

This article is adapted from a longer piece in China US Focus. See more here.