management of government credit. This is also a process for people to learn the technologies and techniques of managing government credit. To conduct management of government credit requires a complete set of systems, mechanisms and technologies. This is the way to develop a market economy based on the rule of law.

New public service units

Take the NCOH for example. It is a multifunctional public service unit. The more units of this nature there are, the more messy the market economy will become and the less reliable the market economy will be. When the whole trade chain is in a mess, the public cannot expect a reasonable outcome. All this requires us to conduct a thorough reform of these public service units. The priority now is to make clear their powers and responsibilities from the perspective of law, that is, to solve problems legally, to give them an explicit identity and to define their roles in the market economy--these roles must be a combination of powers, responsibilities and interests.

Consensus has been reached that China needs to develop a market economy. In order to do a good job, public service units must undergo reforms, as only by doing so can we improve the management of government credit. Meanwhile, the improvement of this management will help regulate the market economy.

The reform in China is legislation driven. For example, before the formulation of the Company Law, no Chinese enterprises had a concept of corporate governance. Traditional concepts were still used to explain state-owned enterprises and some basic factors in the market economy. However, once the Company Law comes about, all enterprises will be called companies, followed by the formulation of corporate constitutions, directorates, board of supervisors and shareholders' meetings. It proves a sound system will help to quickly change the present situation.

Chinese society already has the ability to solve the problems concerning public service units. To carry out the reform in accordance with principles of the market economy is all that needs to be done.

In 1994, the Budget Law and Detailed Rules for the Implementation of the Budget Law were issued in China, which put forward the budget systems for public finance, state capital operation and social security. However, 13 years have passed and these systems are yet to be set up. Government departments still possess a lot of powers and many programs are waiting for administrative approval. This is a big problem. To solve it, the priority is to transform the government into a public service provider. More importantly, the public service system must be connected with the public finance budget.

A well-developed market economy does not mean a lack of government management, but that the government has little interference because the market has good supervision and control over the government. Of course, China still has rigid control over its economy, but it is impossible that government interference will play a decisive role in the market process. Although the government will impose a strong influence on value judgments, transaction rules and the market confidence, the influence is short-lived.

Socialism of rule of law

A large number of social problems should be attributed to the lack of rule of law. The brickyard slavery scandal in Shanxi Province, the problem with the NCOH and all the problems we encountered in the process of deepening reform are all related to the rule of law. Even the management of government credit is fundamentally a problem concerning the rule of law. The efforts to realize the goals of socialism must be conducted on the basis of rule of law.

There must be good laws as the prerequisite. Systems do not necessarily promise good things. Nowadays, quite a lot of government departments are trying to formulate laws in their own interests. Once worked out, good laws must be put into effective practice. A final remedy mechanism is necessary in case of problems occurring when good laws are carried out. This requires independent and authoritative judicial institutions.

Socialism based on the rule of law comprises: First, a very good legal environment for the whole of society; second, a government ruled by law; third, an independent judicial system; and fourth, a large quantity of highly professional lawyers, accountants, civil servants and social service organizations who have received legal training. Besides this, a highly developed education system is necessary.

In socialism that is based on the rule of law, legal means instead of administrative means should be adopted to govern the country. This kind of socialism covers such concepts as governing the country by rule of law, the people as the masters of the country and also democracy. The government and socialism based on the rule of law will certainly respect and protect human rights as well as citizens' basic properties. China's current reform is actually moving toward "socialism based on the rule of law," which is reflected in such actions as the modification of the Constitution and the formulation of Real Right Law. Without rule of law, there is no socialism.