Reform of the Systems Governing Goods Circulation and Distribution in China

Before reforms began in 1978, the way in which goods circulated in China could be characterized by the terms “extreme centralization,” a “monopoly process,” and “fragmented and closed structures.” The domestic market was cut off from the international market. Domestic trade and international trade were mutually exclusive. Each category had its own management structure and set of policies to follow. The reforms that were initially applied to each, and the characteristics of those reforms, were quite distinct. As the process of reform and opening up proceeded, however, domestic and international circulation of goods gradually began to align with one another. They constantly evolved towards a market orientation, as well as an international orientation.