The Market-Socialist Economy Of China

5 Pages 1161 Words

“The planned economy is not tantamount to socialism,
because a capitalist country also practices the planned economy;
market economy is not tantamount to capitalism
because a socialist country also practices the market economy.
Both the planned economy and the market economy are economic means.
The essence of socialism is to emancipate and develop the
productive forces, destroy exploitation, eliminate polarization,
and attain common prosperity in the end.”
Deng Xiaoping, 1987

The building of the “market-socialist economy” in China, is understood to be one of many great Chinese experiments, a continuation of the “permanent revolution” that Mao upheld. The financial fragilities created by a growing public debt (particularly when one includes the debt owed to state-owned banks by state-owned enterprises), rising unemployment, and the difficulties in maintaining legitimacy based on traditional views of citizenship rights under “socialism” are likely to push the Chinese Communist Party into the arms of corporate patrons (both domestic and foreign).
The Chinese leadership has a keen understanding of the strengths and weaknesses of a market-socialist economy, gained over years of experimentation and struggles to maintain economic growth while containing inflation. In a society that has significant centrifugal forces at work, it is considered necessary to keep a greater degree of control over a private market than might be thought appropriate in a more “free market” environment. Communist Party leaders still believe in public ownership, and they worry that further privatization will spell the end of the party’s monopoly on power. Markets, in the conception of the Chinese leadership and many academic economists advising them, are not naturally equilibrating, but are chaotic relationships constrained from flying apart into chaos by strictly enforced institutional rules and relatively rigid institutional st...