Socialist market economy

The Socialist market economy or socialist market economy with Chinese characteristics is the official term for the economic system of the People's Republic of China after Deng Xiaoping's reforms. Other states refer to their economic system as a socialist market economy, such as the Socialist Republic of Vietnam, according to market reforms under the name Đổi mới (renewal).

Description

The Socialist market economy is a concept that was first constructed by Deng Xiaoping in the course of integration of the market in a planned economy in the People's Republic of China and which was repeated similarly later in Vietnam. After its enforcement in China this economic system, the Chinese planned economy supplemented and contributed to the high growth rates of the gross domestic product in the last decades. Within the model also private companies are an important part of the economic system.

The private sector

Most of the economic growth in China is attributed to the private sector, which is growing twice as fast as the official growth figures for total and continuously increases. However, the size of the private sector is difficult to measure, because this sector is often too small estimated by official sources in the calculation of GDP. Here, the statistic tends to ignore small entrepreneurs or not to include private companies as such in the evaluation.

In addition, often private companies will still continue declared by their owners as a collective enterprise. In addition, often the size of private enterprises is shown smaller than it actually is. The private sector generated about 70 % of GDP in 2005. This figure could be even greater considering the Chengbao system. Within this system, private entrepreneurs manage such assets or economic entities, which nominally belong to the government. The state retains control over strategic industries.

Many sectors such as health care or education, which have been previously passed by the state were partially or even fully privatized during the development of China's current market economy.

The public sector

In 2005, the market-oriented reforms, including privatization was virtually halted, or in some cases even turned back. 2006, the Chinese government declared that the defense industry, power generation, which must remain oil and petrochemicals, telecommunications, coal mining, air and shipping under the " absolute control of the state " and continue to be legally public property. The State also retains the indirect control of the instructions of non- business through the financial system, which gives financial support according to state interests.

The state sector is concentrated in the major industries of the economy, while the growing private sector is found primarily in the area of ​​goods and consumer goods production and light industry. Centralized planning based on mandatory Produktionismengen and quotas, was replaced for the bulk of the economy by a free market mechanism and pure Indikativplanung for the major state industries. In contrast, the earlier imperative planning, which had made much more detailed specifications for production quantities.

A big difference to the old planned economy is the restructuring of state-owned enterprises on a commercial basis, with the exception of only 150 very large state enterprises that continue to be managed directly by the central government. Most of them have subsidiaries.

These state-owned enterprises have a high degree of autonomy, so that they themselves choose their own CEOs and can retain their self-generated profits. However, they differ from private companies is that they are necessary rescued by the state when they run into financial problems. By 2008, these state-owned enterprises have experienced a great dynamic and could thus contribute to the increase in government revenue. The state sector initiated the recovery process and increased growth in 2009 after the financial crisis. The reason for this is that most of the Chinese stimulus package was directed to these state-owned enterprises.

This type of economic system is defended from Sino- Marxist perspective, which argues that a socialist planned economy is only possible after first comprehensive inventory management was established with market economy elements. Only after their complete development, they will eventually exhaust itself and gradually transform into a planned economy.

History

The transformation to a socialist market economy began in 1978 when Deng Xiaoping its program of socialism with Chinese characteristics introduced. The reforms began with collectivization of agriculture and the toleration of private sector and foreign direct investment in 1979 and later led to further far-reaching reforms of the privatization of the state sector on the liberalization of trade and prices of consumer goods up to the abolition of the welfare state effort in former danwei system in the late 90s. Since the beginning of reforms Deng'schen China's gross domestic product grew by about 150 billion U.S. dollars to more than $ 1.6 trillion with an annual average growth of 9.4%. As of 2004, half of the remaining state-owned companies were transformed into joint stock companies.

The share of private sector in GDP increased from less than 1% in 1978 to 70 % in 2005 and continues to grow still is about. Due to the weak economic performance of the traditional state-owned enterprises in the market economy, China embarked on a strategy of extensive privatization. In this model, the state retains formally the ownership and control of the large state-owned enterprises, but has little direct influence on their internal management.

Philosophical debate

Despite the official designation as " socialism," the Socialist Market Economy of Western observers is often described as free-market capitalism. Criticism in this direction comes from the orthodox Marxists, who see in this system, a restoration of capitalist property and production relations. The system entmachte the working class and lead to a strong inequality between rich and poor and thus a formation of a growing capitalist class.

Orthodox Marxists believe that such a socialist goods economy is self-contradictory. Other socialists believe that the PRC had taken too many capitalist elements in their system and it therefore creates particularly by the type of commodity production eventually to a capitalist economic system. The economic reforms of Deng Xiaoping were also criticized by the Chinese population, which was reflected also in the protests on Tiananmen Square in 1989, which were directed against, among others growing gap between rich and poor.

Proponents of the system, especially from the Chinese side from arguing with a highly modified version of historical materialism. This has been adapted according to their argument on the Chinese characteristics and the present.

The Socialist market economy is defined as the initial stage of socialism. Oskar Weggel summarizes the related ideological leap as a "gray zone ideology " together:

" Had to China during the Great Leap Forward from 1958 already fancied in the final stage of socialism, as it has now, 29 years later (!), The " theory promulgated by the primary stage of socialism ". It was not until 2049, exactly 100 years after the proclamation of the People's Republic, the country is economically and socially mature enough to progress to the full socialist stage can. Until then, a transition period is to go through the "socialist economic goods " under the heading. Had Marx the revolutionary three-stage plan created ( capitalism, socialism, communism), as was true for China from now on a five-step scheme: semi feudalism / capitalism - New Democracy - the Socialist ERP - full socialism - communism. In the phase of socialism, the goods is currently in progress, it was necessary to act pragmatically and all those resources to use, the above would bring the community socio economically. "

Other examples of socialist market economies

• New Economic Policy of the Soviet Union in the 20s, and the Soviet Union after the perestroika until its dissolution
• Socialist market economy in the former Yugoslavia under Tito, see also Titoismus and worker self-management
• Approaches were also found in socialist Bulgaria and Hungary ( " New Economic Mechanism ", 1968) under the slogan " socialism with a human face " and during the Prague Spring in Czechoslovakia.
• New Economic System of Planning and Control in the GDR
• Special economic zones in the People's Republic of China, the so-called socialism with Chinese characteristics
• Cuba after the collapse of the Eastern Bloc
• Economic reforms called Today's Vietnam to Đổi mới ( viet. renewal)
• Laos to various reforms of the private sector