ABSTRACT
This chapter shows that that the problems created by the program of economic reforms, the Chinese leaders had been forced to reassert the centralized control of the traditional Soviet-type economic system. There can be no doubt that a modification of China’s traditional economic model of the past quarter of a century—that is, a rejection of the Maoist economic principles, a more balanced investment program, and allowing a private-market sector to supplement a dominant centrally planned sector—would lead to significantly improved economic performance and growth. The only true systemic reforms that have been carried out in the countries that have adopted the Soviet-type economic system are those in Hungary and Yugoslavia. Both of those countries discarded the system of central planning based on physical output and input targets derived from material balances for commodities and adopted a reliance on economic levers to guide production and allocation decisions.
