What question did this study set out to answer?

The central aim is to examine the progression of China's market economy since 1949 and the influence of various economic policies.

April 3, 2026Open Access

The Development of China's Market Economy

Key Points

The central aim is to examine the progression of China's market economy since 1949 and the influence of various economic policies.
Analyzed historical economic policies from 1949 onwards
Examined the implementation of the Five Year Plan starting in 1953
Investigated the impacts of decentralization announced by MaoTse-tung in 1956
Establishment of a mixed economy combining public and private sectors
Initial failures of centralized economic planning from the Soviet model
Introduction of decentralization met with confusion and rigidity in practices

Abstract

In 1949 the Chinese Communist Party established the Peoples Republic of China and in approximately three years enforced a new democratic economy unifying the public and private sectors in a kind of mixed economy.In other words the government took control of the market economy.The first Five Year Plan started in 1953 in which agriculture, the handicraft industry, and private businesses underwent socialist reconstruction, while there was a positive adoption of Soviet economic planning establishing a centralized economic planning system which denied the existence of a market economy.By 1955 with the noticed deficiencies of the Soviet model, in April 1956 MaoTse-tung announced the `Ten Great Relationships Argument' stating that more authority should be given to regional governments and enterprises.This was the decentralization of authority planned economy.However, decentralization and planning were not introduced in their original aspect and prove unworkable.Regional decentralization brought about confusion while centralization caused rigidity.This

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