Decentralized Decision-Making and Multiple Modes in Reform

Gao Xiaomeng and Luo Xiaopeng

Chinese Economy, 1994, vol. 27, issue 3, 15-17

Abstract: 1. The current plan of "limiting purchase" (>i>xian gou>/i>) contains insuperable defects. It is difficult to implement because of the many problems involved, and its stated goals will be hard to accomplish. First of all, it will drastically slow down the rate of increase in peasants' incomes. In some areas, absolute incomes will drop (grain and cotton alone will reduce peasants' incomes by some 11 billion yuan), which will be disadvantageous to the rural and even the national economy. Second, it is unfavorable to the rational deployment of resources and restoration of balance between supply and demand. Limited purchase goals will necessarily be passed down to different levels, and passing goals down the levels was precisely at the root of the defects of the old policy on purchase of farm products. Third, this plan will be hard to manage, because it involves an enormous workload and may also breed unhealthy practices. Fourth, the plan is overly simplistic and would be hard to apply to the varied conditions in different localities. A unified plan generated at the central level would necessarily involve unified management and implementation. This unified mode limits the flexibility necessary to take into account the differences in economic level, need for readjustment, and capability in different provinces.

Date: 1994
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