ABSTRACT
A reform-minded leadership was promoting an economic system quite different by the late Mao Zedong one with independent enterprises practicing 'scientific management' and responding to the signals of the market. Mobilization depended on direct communication between the political center and the regions and localities, bypassing much of the state bureaucracy. Therefore, while Mao's concept of administrative decentralization heightened the authority of local areas, it simultaneously concentrated power at the very top. The term 'feudalism' used in China refers to the means of domination of Chinese society employed by a privileged class for many centuries. The Chinese media daily deals with manifestations of the tensions between market and socialist values, the general inevitability of such conflict is given scant recognition. The Hungarian experience is one to which the Chinese have paid special attention. In Hungary, the conflict between the market and socialist values has led to the creation of complex formulas determining the division of profits between state and enterprise.
