ABSTRACT
This chapter begins with major economic debates by the protagonists of reforms in China, with the purpose of identifying different opinions within the Chinese government. It builds on the major debates in Chinese economic history, demonstrating how the coexistence of government-regulated and private sectors in Shandong province appeared to be a solution to economic inequality persisting in a dual economy. The chapter establishes that the urban–rural divide was evidence of a non-integrated market, and thus the resulting dual economy needs to be contextualised differently. Government entered the money market to generate revenue, like bankers and financers, but in this move, the Beijing government experienced setbacks. Provincial governments gained monetary autonomy, as did several local bankers who bet their business fortune on their support of provincial powers. The national commercial reform policies benefited the provincial governments, rather than the imperial government, particularly in control over native industries.
