The Fourth Plenary Session of the 19th CPC Central Committee raised the distribution system whereby distribution according to labor is dominant and a variety of other modes of distribution exist alongside it and the socialist market economic system to the basic socialist economic system, which is a major theoretical innovation of CPC. This shows that the socialist economic system with Chinese characteristics has been basically finalized after more than 40 years of reform and practice. In the future, it should be further improved in practice, so as to transform the institutional advantages into governance advantages.This paper analyzes the institutional advantages of upholding the dominant role of the public sector and common development of economic entities under diverse forms of ownership, the institutional advantages of distribution system whereby distribution according to labor is dominant and a variety of other modes of distribution exist alongside it, and the institutional advantages of the socialist market economic system.
