Adaptation and Containment: The Maoist State’s Approach to Markets in the 1960s and 1970s

Based on foreign trade archives at the grassroots level, this article contends that the Maoist state approached markets using strategies of adaptation and containment. It adopted market price and sales reward policies to address the challenges posed by the free market when procuring goods. For capitalist markets, Maoist China exported goods at prices set by current market conditions, imposed a quota system on daily export volume, and to some degree shaped export activities to serve market needs. Meanwhile, the state prohibited local commercial companies from procuring goods at market prices; used the sales reward policy to contain the market; and greatly limited the influence of foreign capitalist markets on local export activities via the planned economy system. Overall, the rural economy in Maoist China featured a deep intertwining of planning and market mechanisms, as well as limited interactions with the global market instead of complete isolation.