A planned economy was followed after the founding of the People's Republic of China in 1949; and it was unavoidable for the conditions of the time. Along with the advances of socialist construction; however, the system's flaws began to show and became a hindrance to productivity.
The CPC Central Committee began reforming the system after the Third Plenary Session of the 11th Central Committee at the end of 1978. Late leaders Deng Xiaoping and Chen Yun contributed important thoughts including "socialism is not a planned economy," and "attention must be paid to market regulation."
The Party's 12th National Congress in September 1982 reported on the principle of "maintaining a planned economy while making market regulations supportive." The Decisions by the CPC Central Committee on Economic System Reform, adopted at the Third Plenary Session of the 12th Central Committee in October 1984, broke with the traditional mindset – regarding a planned economy and a commodity economy as opposing concepts – and defined the socialist economy to be a "planned commodity economy on the basis of public ownership." The Party's 13th National Congress in October 1987 proposed a new mechanism in which the state regulates markets and the markets guide enterprises; and pointed out that a planned socialist commodity economy should be a "system of internal integration of planning and the market."
In his famous speech during a visit to southern China in 1992, late leader Deng Xiaoping pointed out that a planned economy is not equivalent to socialism, because there is also planning in capitalism; and a market economy is not equivalent to capitalism, because there are also markets under socialism. Planning and market regulation are both means of controlling economic activity.
The Party's 14th National Congress in October 1992 formally set the "construction of a socialist market economy" as the goal of China's economic system reform.
By People's Daily Online |
