Theoretical Basis for Reform of the Planning System

The planning system holds a position of special importance in the "CCP Central Committee's Decision on Reforming the Economic System" adopted by the Third Plenum of the Twelfth Party Central Committee. The fundamental goal the "decision" set for the reform is to establish in China "a planning system that consciously applies the law of value to develop a socialist commodity economy." Stipulations carried by the "decision" affirm, on the one hand, the fact that this socialist country of ours continues to practice planned economy based on ownership by the whole people rather than a market economy totally regulated by the mechanism of market and, on the other hand, the idea that our socialist planning system should be one combining uniformity with flexibility. In terms of its entirety, our national economic plan should only be a broad outline leaving much room for maneuver. By striking an overall balance and employing economic devices, it should exercise an effective control over major areas and give a free rein to minor things. A mandatory plan should be provided for major products that have a bearing on the national economy and the people's livelihood and need to be distributed and allocated through the arrangement of the state as well as vital economic activities that involve the overall situation. As for the other products and economic activities in large numbers, we should, in light of their different conditions, provide with them a guidance plan or allow them to be completely regulated by the market. In regard to ways of planning, we should gradually narrow the extent to which the mandatory plan applies and properly widen the scope of the guidance plan.