Development Planning under China's Socialist Market Economy

摘要

Planning is a tool to handle the issues that people may possibly meet in the future. It includes objectives or goals to be achieved in the future, and initiatives that will lead to means and ways to address these issues. After its foundation, the Peoples Republic of China ran the national economy using the central planning model created by the former Soviet Union. The reform and opening, under guidance of Deng Xiaoping Theory, has made the market system a part of Chinas planned economy system. As a result, the market economy enjoys an increasingly enhanced role in resource distribution. In 1992, China officially made the establishment of the socialist market economy system a magnificent goal to pursue. The socialist market economy system, in a simplified definition, is " a system to raise efficiency with market economy means, and to ensure the fairness with the socialist system". A planning process, with government as a dominant player, basically reflects government's prediction, wish, and intention for a nations development perspective in a given objective environment. However, the implementation progress and the results to be derived from planning are determined by the market force. Balance has to be made between the "visible hand" (government) and the "invisible hand" (market) , in an attempt to use both forces to spur up the economic development. Market economies in the world can be roughly divided into three models: the government regulated, such as in the USA and the UK, the government guided, or the so-called Rhine model, and the government dominated, or the east Asia model.