4. The Relationship Between the Government and the Market

The Common Programme of the Chinese People’s Political Consultative Conference (September 29, 1949, the First Plenary Session of the Chinese People’s Political Consultative Conference was passed), C.P.C. Party Literature Research Office: Selected Works of Important Literature Since the Founding of the P.R.C., Book 1, P. 8, Beijing, Central Party Literature Press, 1992.

Constitution of the People’s Republic of China (approved at the First Session of the First C.P.C. National Congress on September 20, 1954), C.P.C. Party Literature Research Office, Selected Important Literature Since the Founding of the P.R.C., Book 5, P. 524, Central Party Literature Press, 1993.

Liu Shaoqi: Report on the Draft of the Constitution of the People’s Republic of China, September 15, 1954, Liu Shaoqi’s Selected Works, Volume II, P. 144, Beijing, People’s Publishing House, 1985.

Chen Yun described China’s economic situation as follows: ‘in industrial and commercial operations, state operations and collective operations are subjects of the industrial and commercial industries, and a certain number of individual operations are attached. These individual operations are supplementary to state operation and collective operation. A major portion of national industrial and agricultural products is produced as planned, but some products are freely produced within the permitted scope of the national plan based on market changes. Planned production is the subject of industry and agriculture, and free production within the permitted scope of the national plan based on market changes is supplementary to planned production. Thus, our market is absolutely not a capitalist free market, but a unified socialist market. In a unified socialist market, the state market is the subject, but there is also a range of free markets led by the state. Under national leadership, this free market is supplementary to the national market, and thus constitutes a part of the unified socialist market’. Chen Yun: New Issues After the Basic Completion of Socialist Reform, Chen Yun’s Selected Works, Volume III, P. 13, Beijing, People’s Publishing House, 1995.

The Decision indicated that with socialist transformation, major national industrial and agricultural products would be listed in the national plan, and would be produced by production units as planned.  However, in order to meet multiple social needs, some parts would not be listed in the national plan. They would be produced by units based on raw materials and markets, supplementing planned production. For this aspect of production, the state only regulated its supply-marketing relationship or stipulated referential indicators for the formal plan. If unnecessary restrictions were imposed on the production of such products, it would not conform to economic development and the people’s needs.  Similarly, the subject of a socialist economy is centralized operations, supplemented by decentralized operations within a certain scope. Resolution of the Political Report of the Eighth National People’s Congress of the C.P.C. Central Committee, approved at the Eighth National People’s Congress of the C.P.C. Central Committee on September 27, 1956, C.P.C. Party Literature Research Office, Selected Important Literature Since the Founding of the P.R.C., Book 9, P. 524, Central Party Literature Press, 2011.

Maddison, Angus: Historical Statistics of the World Economy: 1-2008 AD.

Mao Zedong: Issues about Socialist Commodity Production, Mao Zedong’s Collected Works, Volume 7, PP. 435, 439, Beijing, People’s Publishing House, 1999.

Deng Xiaoping: Socialism Can Also Implement a Market Economy, (November 26, 1979), Deng Xiaoping’s Selected Works, Volume 2, P. 236, Beijing, People’s Publishing House, 1994.

C.P.C.’s Decisions on Several of the Party’s Historic Issues Since the Founding of the P.R.C. (approved in the 6th Plenary Session of the 11th C.P.C. Central Committee on June 27, 1981). C.P.C. Party Literature Research Office: Compilation of Important Works Since the Third Plenary Session (II), P. 841, Beijing, People’s Publishing House, 1982.

Yao Yilin, Song Ping, Zi Shupan, Li Renjun, Fang Weizhong, and Wang Yuqing participated in the discussion.

Tan Zongji, Ye Xinyu: Record of the P.R.C.’s Reform and Major Changes—Initiating a New Pattern of Modernization Drive (1977–1983), Volume IV, (I), P. 515, Changchun, Jilin People’s Publishing House, 1994.

Chen Yun: Several Issues in Realizing the Strategic Objectives Formulated by the 12th National People’s Congress of the C.P.C. Central Committee (December 2, 1982), Chen Yun’s Selected Works, Volume III, P. 320, Beijing, People’s Publishing House, 1995.

At the 12th National People’s Congress of the C.P.C. Central Committee, Hu Yaobang indicated that China had basically implemented a planned economy on the basis of public ownership. Planned production and circulation were aspects of China’s national economy. In the meantime, it was forbidden to plan the production and circulation of products that would be regulated by the market. This part was supplementary to the planned production and circulation. It was affiliated and minor, but also necessary and beneficial. The socialist state economy dominated the entire national economy. In rural areas and cities, individual workers’ economies were encouraged to develop within the scope provided by the state and under industrial and commercial administration. This was a necessary and beneficial supplement to the pubic sectors of the economy. We must carry out the principles of the planned economy, supplemented by market regulation. The right implementation of the principle of planned economy supplemented by market regulation is a fundamental issue of economic reform. We must correctly divide the mandatory plan from the guiding plan and the scope and boundary adjusted by the market; we must gradually implement a price system and price management methods while maintaining the basic stability of commodity prices; we must reform the labor and wage systems, and build an economic management system that meets our national situation, so as to guarantee the sound development of the national economy’. Hu Yaobang: Comprehensively Initiating a New Pattern of Socialist Modernization—Report at the 12th National People’s Congress of the C.P.C. Central Committee, C.P.C. Party Literature Research Office, Selected Important Literature Since the 12th National People’s Congress of the C.P.C. Central Committee (I), PP. 20–23, Beijing, People’s Publishing House, 1986.

Zhao Ziyang: Opinions on Three Issues About Economic System Reform (September 9, 1984), C.P.C. Party Literature Research Office, Selected Important Literature Since the 12th National People’s Congress of the C.P.C. Central Committee (II), P. 535, Beijing, People’s Publishing House, 1986.

Jiang Zemin: Quickening the Pace of Reform and Opening and Driving Modernization, Winning More Victories in the Socialist Cause with Chinese Characteristics—Report at the 14th National People’s Congress of the C.P.C. Central Committee, October 12, 1992.

Jiang Zemin: Organizing and Promoting the Establishment of a Socialist Market Economy, November 14, 1993, Selected Important Literature Since the 14th National People’s Congress of the C.P.C. Central Committee, Book I, P. 555.

On August 28, 1950, China passed its first trademark law since the founding of the nation: Provisional Regulations of Trademark Registration. On June 15, 1957, it signed the Nice Agreement Concerning the International Classification of Goods and Services for the Purpose of the Registration of Marks. On March 30, 1963, it passed the Trademark Management Regulation, and implemented mandatory trademark registrations. On August 23, 1982, the 24th Conference of the Fifth Standing Committee of the National People’s Congress passed the Trademark Law of the P.R.C., which was implemented on March 1, 1983. The Trademark Management Regulation promulgated by the State Council was abolished on April 10, and modified for the third time in the Fourth Session of the Fifth Standing Committee of the National People’s Congress on August 30, 2013. In 1988, China officially adopted the Nice international classification of goods and services, and joined in the agreement on May 5, 1994, which took effect on August 9 of the same year.

See Gu Xin’s ‘What’s the Government’s Role?’ The Economic Observer Newspaper, April 5, 2014, International Myth of Government-Dominated Development, The Economic Observer Newspaper, January 18, 2013.

The Eleventh Five-Year Plan for National Economic and Social Development of the People’s Republic of China, approved in the Fourth Session of the 10th National People’s Congress on March 14, 2006.

Cited from Wang Lanjun: New Ideas of Governing and Benefiting the People, Ruling the State, and Dealing with Politics, Study and Research, Issue 5 of 2014, P. 55.

Wang Zhiping: Local and Central G.D.P. ‘Fight’ Urgent for Attention, People’s Daily: Internal Reference, Issue 49 of 2013, December 30, 2013.

Zhang Ping: The Twelfth Five-Year Plan for National Economic and Social Development of the People’s Republic of China, P. 335, 344, Beijing, People’s Publishing House, 2011.

On May 26, 2014, while holding the 15th Collective Study of the Political Bureau of the Communist Party Central Committee, Xi Jinping remarked: ‘As for the issue of market and government function, which is dialectal, we must apply two points—an ‘‘invisible hand’’ and a ‘‘visible hand’’, and endeavor to achieve an organically unified, mutually complementary, coordinating and promoting pattern of market and government function. We must promote the sustainable and sound development of an economic society’. Xinhua News Agency, Beijing, May 27, 2014.

Zhang Gaoli: Comprehensively Deepening Reform with a Focus on the Economic System, People’s Daily, Version 03 of November 20, 2013.