ABSTRACT
China’s macroeconomic reforms faced three critical issues at the outset of reforms. The first was that the country’s long-standing planned-economy system had allowed economic interests that lacked vitality to become entrenched. At the same time, all macroeconomic regulatory mechanisms were tightly controlled by the various layers of government administration. Although China’s economy had been different from those of the Soviet Union and Eastern Europe, in that it did have “planning overall but with small freedoms” [da jihua, xiao ziyou], in overall terms the role of the market was extremely weak.
