Other reforms have transferred state-owned assets to social security funds to help finance pensions and the Shenzhen municipal government has proposed using their state-owned enterprises to finance a social dividend-type of system for its residents. Chinese economist Cui Zhiyuan argues that James Meade's model of liberal socialism is similar to China's socialist market economy and can be used to make sense of the model.
Meade's model of market socialism involved public ownership of firms with independent management where the state acted as a residual claimant to the profits generated by its enterprises, but it did not exercise control rights over management and operations of its firms. The benefits of this model are that the state would have a source of income independent of taxation and debt, enabling a reduction of the tax burden on individual incomes and the private sector while promoting greater equality.
Cui points to the Chongqing experience with municipal state-owned enterprises enabling high social expenditure alongside low taxes and extremely high rates of growth as validation of the socialist market economy model. Julan Du and Chenggang Xu analyzed the Chinese model in a paper to assess whether it represents a type of market socialism or capitalism.
They concluded that China's contemporary economic system represents a form of capitalism rather than market socialism because financial markets exist which permit private share ownership—a feature absent in the economic literature on market socialism—and because state profits are retained by enterprises rather than being distributed among the population in a social dividend or similar scheme, which are central features in most models of market socialism.
They concluded that China is not a market socialist economy, but it is an unstable form of capitalism. Another analysis carried out by the Global Studies Association at the DePaul University in reports that the Chinese economic system does not constitute a form of socialism when socialism is defined as a planned economy where production for use has replaced production for profit as the driving force behind economic activity, or when socialism is defined as a system where the working class is the dominant class which controls the surplus value produced by the economy.
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The Chinese economy also does not constitute socialism in the sense of widespread self-management or workplace democracy. As of , Curtis J. Milhaupt and Wentong Zheng classify China's economic system as state capitalism because the state directs and guides all major aspects of the Chinese economy—including both the state and private sectors — while not collecting dividends from the ownership of its enterprises.
They note that Chinese state-owned enterprises and privately owned enterprises share many similarities with respect to state subsidies, proximity to state power and execution of government policy objectives. Within the state sector, the emphasis is more on government control than on the ownership of assets.
Proponents of the socialist market economy compare it to the New Economic Policy in Soviet Russia that introduced market-oriented reforms while maintaining state-ownership of the commanding heights of the economy.
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The reforms are justified through the belief that changing conditions necessitate new strategies for socialist development. According to Li Rongrong in , chairman of the State-Owned Assets Supervision and Administration Commission of the State Council, China's socialist economic system is underpinned by the foundational role of public enterprise:. Public ownership, as the foundation of the socialist economic system, is a basic force of the state to guide and promote economic and social development and a major guarantee for realising the fundamental interests and the common prosperity of the majority of the people… The state owned economy has taken a dominant place in major trades that have a close bearing on the country's economic lifeline and key areas, and has propped-up, guided and brought along the development of the entire socio-economy.
The influence and control capacity of SOEs have further increased. State owned economy has played an irreplaceable role in China's socialist modernisation drive.
Other Marxist analyses point out that because the Chinese economic system is based on commodity production, has a role for private capital and disempowers the working class, it represents a capitalist economy. Other socialists believe the Chinese have embraced many elements of market capitalism, specifically commodity production and privatisation, resulting in a full-blown capitalist economic system. Public ownership in the socialist market economy consists of state-owned assets, collectively owned enterprises and the publicly owned shares of mixed enterprises. These various forms of public ownership play a dominant role in the socialist market economy alongside substantial private and foreign enterprises.
The socialist market economy consists of a wide range of state-owned enterprises SOE that represent one form of public ownership. Beginning with the reforms, in the s during the industrial reforms state enterprises were gradually corporatised and transformed into joint-stock corporations with the state retaining either full or majority ownership of their shares.
By the early s, most major SOEs in non-strategic sectors were listed on the Shanghai and Hong Kong stock exchanges and some SOEs adopted mixed ownership structures where the central government and various other state entities—including state banks, other SOEs, provincial and local governments—own varying degrees of the firm's listed shares alongside foreign and private shareholders. The result has been a highly diffuse form of public ownership where state-owned enterprises are owned by various different government entities, agencies and other state-owned enterprises.
This makes gauging the true size and scope of the state sector difficult, particularly when SOEs with mixed ownership structures are taken into account. In , China implemented a comprehensive series of industrial reforms termed " Grasping the large, letting go of the small ". These reforms involved closing unprofitable state enterprises, merging smaller enterprises and privatization of other small-to-medium enterprises. Centrally owned SOEs were reformed into joint-stock companies with the aim of delegating more authority to SOE managers. SOEs at all levels shifted their primary focus to profitability and shed their social welfare function of providing social services and benefits to their workers in what was known as the " Iron Rice Bowl " system.
Modern SOEs are operationally very different from those in the s. SOEs are much larger in size and fewer in number, with central government-owned SOEs clustered in "strategic sectors" including banking, finance, mining, energy, transportation, telecommunications and public utilities. By comparison, provincial and municipal level SOEs number in the thousands and are involved in almost every industry including information technology and automobiles design and production.
State sector reform is an ongoing process in China.
In particular, China maintains that centrally owned SOEs also pursue national and industrial policy objectives. Despite becoming increasingly profitable, SOEs in China have not paid dividends to the state, causing some analysts question the rationale for public ownership in the first place. Privately owned enterprises POEs are recognized as one of the components of the socialist market economy alongside state, collective and individually owned enterprises. The private sector has played an increasingly large role since the adoption of the Company Law. Additionally, the boundary between public and private enterprises have blurred in China as many publicly listed firms are under mixed ownership by various state and non-state entities.
Additionally, private sector firms that operate in industries targeted for growth often receive favorable loans and preferential government treatment while SOEs in non-strategic sectors might be exempt from subsidies. As an example, ZTE Corporation is a majority state-owned enterprise that was forced to rely on equity markets whereas its employee-owned private sector competitor Huawei is viewed as a "national champion" and therefore received major state funding from state banks.
Like their state-owned counterparts POEs are expected to follow state policies and are subject to party control, suggesting that the distinction between public and private ownership is not a meaningful distinction to make for understanding China's economic model. As of , state control and state-directed development in both public and private sectors is the overriding feature of the Chinese economic system that plays a more substantial role than the public ownership of assets.
While the private sector has been accorded a role in the socialist market economy and has greatly increased in size and scope since the s, the private sector does not dominate the Chinese economy. The exact size of the private sector is difficult determine in part because private enterprises may have a minority of their stock owned by state entities and because of different classification standards used for classifying enterprises. By the early s, Soviet-type economic planning had been replaced with market relations and markets became the fundamental driving force in the socialist market economy, with the State Planning Commission being reformed into the National Development and Reform Commission in Indicative planning and industrial policies have substituted material balance planning and play a substantial role in guiding the market economy for both the state and private sectors.
The planning system consists of three layers, with each layer using a different planning mechanism. Compulsory planning is limited to state-owned enterprises operating in strategic sectors, including research, education and infrastructure development plans. Compulsory planning outlines targeted outcomes and the supply of raw materials and financial resources needed. Contractual planning sets objectives and the overall means of achieving these goals and then negotiates with enterprises and local governments to establish detailed objectives and how resources are to be allocated to the targeted sectors.
Indicative planning operates at the lowest level of the planning system, where the government outlines industrial targets and then uses market instruments tax exemptions, subsidies and favorable bank loans to induce firms in the targeted industry to meet these targets.
Socialist market economy
From Wikipedia, the free encyclopedia. Chinese economic philosophy. This article is about the specific economic system in the People's Republic of China. For the broader concept of market-based socialism, see Market socialism. For the system in Vietnam, see Socialist-oriented market economy. For the German model of capitalism, see Social market economy. By ideology. By coordination. By regional model. Common ownership Private Public Voluntary. Property types. Collective ownership Commons Private property State ownership Social ownership.
Other types. History of socialism Socialist calculation debate Socialist economics. Decentralized planning Participatory economics. Market socialism Lange model Mutualism.
Numéros en texte intégral
Socialist market economy Socialist-oriented market. History by country. First International International Workingmen's Association. Third International Comintern. World Federation of Democratic Youth. International Union of Socialist Youth. International Committee of the Fourth International. Related topics. Marxism holds that, within the contradictions between the productive forces and relations of production, between practice and theory, and between the economic base and the super-structure, the productive forces…and the economic base generally play a principal and decisive role.
Whoever denies this is not a materialist. Public ownership of the means of production in its forms of state, co-operative and local ownership and macro-economic planning are the fundamental features of socialist economies of Marxist-Leninist inspiration. The known variants of this type of economy differ mainly in the extent and mix of public ownership, the degree of central control and its extension beyond the macro-economic sphere, the actual techniques of management and planning.
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Soviet-type economic planning - Wikipedia
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