Agricultural Planning and Pricing in the Post-Mao Period

Abstract

During the past decade China's leaders have called repeatedly for reductions in administrative interventions in the economy, for greater reliance on economic “levers,” for decentralization of economic decision-making, and for an increased role of markets. Although the need for liberalization is fairly widely accepted, debate over how far and how fast to proceed has continued. One view initially proposed by Chen Yun sees China moving towards a system where a “planned economy is primary, and markets are supplementary” (jihua jingji wei zhu, shichang tiaojie wei bu). Others advocate moving beyond Chen Yun's vision to a system where, in fact if not in name, allocation takes place primarily through markets. Li Peng's government work report to the first session of the Seventh National People's Congress suggests that the current consensus leans towards the latter, more progressive view:The focus of reform of the planning system is to transform the function of state planning organs, gradually reduce mandatory planning and expand guidance planning, … use economic instruments, and gradually establish a new economic mechanism where “the state regulates markets, and markets guide enterprises” (guojia tiaojie shichang, shichang yindao qiye).