ABSTRACT
Urban economic reform in China has been geared toward effecting a transition from a centrally planned economy to one significantly driven by market relations. In fashioning this transition, China's reformist leaders have sought to create an economic system that matches, in many essential respects, the ideal-typical model of market exchange presented in neoclassical economics. This chapter focuses on dichotomous conception that is profoundly misleading in practice. It overviews the main components of the urban economic reform program proposed in late 1984. The chapter describes that a number of nontrivial alterations have taken place in the form of inter-enterprise trade in China since 1978. It examines in detail one particular aspect of the "model" urban reforms undertaken in Wuhan—the way in which enterprises select their transaction partners. The chapter presents an analysis grounded in the empirical observation that in practice the operational distinction between plan and market is much more blurred than neoclassical theory would suggest.
