ABSTRACT
The issue of the financial and economic system has been raised by the Center and Chairman Mao for a number of years. The business departments are more concerned with this issue. The financial and economic system is not a distribution relationship. It is also different from the interpersonal relationship in the labor process that is division of labor and management system within an enterprise. The socialist economy is more socialized and more complex than the capitalist economy. There exists a close coordination relationship among almost one million enterprises. There are two reservations in adopting the enterprise management system and material management system. The first reservation is whether the profit maximizing capitalist management mentality will be encouraged after independent accounting and contract relationships among enterprises are emphasized. The second reservation is whether chaos in capital fund management and capital construction will result after enterprises are entrusted with the depreciation fund and assume the responsibility for renewing fixed assets.
