The 12^th National Congress of the Party stressed: “To further unify awareness of a socialist oriented market economy” and “By 2020, strive to basically perfect the system of institutions of a socialist oriented market economy in accordance with popular standards of a modern and internationally integrated market economy”. This is absolutely sound and reasonable because market economy is a product of human civilization. Throughout the world, market economy has been built in various forms in different countries with different political-social institutions, and in accordance with each particular circumstance and goals of each nation. These models are formed and operated in accordance with basic rules of a modern and internationally integrated market economy. Nevertheless, there still exist different concepts of such model.

From the reality of countries with developed market economies, such as those of the Organization for Economic Cooperation and Development (OECD), the basic criteria of a modern and internationally integrated market economy can be defined as:

An economy with different forms of ownership in which shareholding predominates. Small and medium sized joint stock companies take advantages in comparison with other kinds of enterprises. Because of the utilities and legal regulations, these companies account for a large proportion in the total number of enterprises (98% and 90% in Japan and America respectively).

A modern market economy is a highly marketized one. “Marketization” not only means that market mechanism functions more effectively than other existing economic mechanisms but it also infers a full market economy which creates a healthy, equal, transparent and favorable competing environment for all forms of enterprises; creates favorable conditions, minimizes priorities and privileges, etc.

A modern market economy depends its growth on modern science and technology; develops knowledge-based economy and highly-qualified human resource. In this economy, high tech products hold a large proportion. It has a modern economic structure with decreased proportion of agriculture and industry and increased proportion of services. Services in the OECD countries, HongKong, the U.S, and Japan account for 70%, 90%, 80% and 74% of GDP of these countries, respectively. Finance and banking (including insurance) and business services are becoming two spearheads, bringing about most of added value for the service industry in general and a driving force for economic growth.

The roles of states are different in a market economy. In the current developed market economies, to a more or less extent, state intervention is necessary, depending on the economic theory that it applies. Whatever the theories, states must respect and adhere to the rules of a market economy.

A modern market economy is an “open” one with the continuity of market economy institutions  towards globalization and regionalization and the formation of bilateral and multilateral free trade agreements with the aim to strengthen the state’s regulatory role in the economy not only in a single nation limit but at a transnational level as well.

The approach to a modern and internationally integrated market economy of Vietnam’s market economy must include the typical features and contents of a modern market economy while maintaining the unique characteristics of “Vietnam” style (socialist oriented).

Socialist orientation and market economy are not just a combination of two factors. This is a new model of market economy aiming to overcome the shortcomings and negative features of the capital market economy while inheriting and promoting its positive points. The internal socialist oriented factors in the process of building a modern and internationally integrated market economy include: (i) it has advanced relations of production fitting the development of productive forces; there are different forms of ownership and different sectors in the economy in which state economy holds the dominant role; (ii) upholding people’s mastership in socio-economic development; (iii) ensuring  social progress and equality associated with economic development; (iv) under the state governance and the leadership of the CPV. For this reasons, during the operation of the socialist oriented market economy in light of the 12^th National Party Congress, it is necessary to grasp and fulfill the following contents:

“Vietnam’s socialist oriented market economy has advanced relations of production which are relevant to the development of productive forces”.

Vietnam’s modern market economy must be operated by the law-governed socialist state. Therefore, building a law-governed socialist state is an objective trend. A law-governed state exists and develops basing on the movements of socio-economic relations in a market economy, not from the subjective political will. This special political institution does not result in any contradictions between superstructure and base because the goal of developing a modern market economy is relevant to the target of building socialism for “rich people, civilized, equal, and democratic country”. Moreover, this institution is also a decisive factor to the needed stability for development; overcoming the shortcomings of a purely free market economy; and ensuring a sustainable development, maintaining political stability, social progress and equality, enhancing the role and effectiveness of the CPV’s leadership.

The CPV leads and develop market economy for the goal of rich people, civilized, equal, democratic and strong country. The Party’s leadership is a prerequisite for realizing socialist orientation in developing modern and internationally integrated market economy of our country.

Grasping and successfully implementing the above mentioned contents are basic conditions for perfecting Vietnam’s market economy institution in accordance with common standards of a modern and internationally integrated market economy.

Professor, Doctor. Chu Van Cap

Ho Chi Minh National Academy of Politics