New Concepts in Chinese Administrative Law

Author: Liu Shenma Huade Yang Huiji
Publisher:
Publish Date: 2001-05-01
Features:
1. Introduction
A market economy is a commodity economy that achieves the optimal allocation of social resources through a market-centered system. Its main characteristics are:
First, it is a market-oriented commodity economy, meaning it has a unified market and market system, rather than a fragmented, self-sufficient commodity economy.
Second, it is a socialized commodity economy, meaning it has a set of commonly followed, stable market competition rules, rather than an economy where everyone acts independently with frequent changes in regulations.
Third, it is a monetized commodity economy, meaning it uses a unified price standard and monetary system, with money as the sole standard for reflecting the value of the commodity economy, rather than an economy with multiple commodity price standards and value realization forms.
Fourth, it is an open commodity economy, meaning it is closely integrated with the national market and adapts to international economic and technological division of labor, rather than an economy that is isolated and relies on internal circulation.①
Fifth, it is a legal-based commodity economy, meaning it has legally defined fair market transaction rules and a commodity economy with self-regulating capabilities, rather than one based entirely on free rein and self-sustaining development.②
The market economy does not carry social system attributes and is unrelated to the so-called class nature.① By these standards, China's current economic model clearly belongs to a general commodity economy system and has not yet entered the stage of a market economy. On one hand, China is a major economic power and one of the main participants in international trade; on the other hand, China's foreign exchange and trade systems are cumbersome and inconvenient, financial and legal systems are weak, and the government lacks control over key economic sectors.②
To transition China's economic model from a general commodity economy to a market economy, the Chinese government is implementing measures such as diversified ownership, clear property rights, market-oriented resource allocation under national macro-control, and legal-based market operations.③ As a result, China has formed a model comparable to the Russian and Eastern European models.④ Since China possesses all typical characteristics of Asian countries, to smoothly establish a market economy system, it must learn from the experiences of Japan and the Asian Four Little Dragons. In the early stages of market economy formation, to avoid unnecessary waste of social resources, the government must intervene strongly while leveraging the initiative of various market entities. Only after the market economy becomes more developed can regulation be appropriately relaxed.⑤