Current Economic Problems In China by Xue Muqiao & Kwok-Kwan Fung

Author:Xue Muqiao & Kwok-Kwan Fung
Language: eng
Format: epub

2. In the past, many products were subject to unified purchase and guaranteed marketing. *2 The great wall separating producing units and market needs led to chronic overstocking of many products and chronic shortages of many other products. Economic returns from production were greatly reduced as a result. Last year, market regulation was adopted for many products. Commerce departments purchased selectively according to market needs. And what was not selectively purchased could be sold independently by plants. This way, what products are abundant or scarce began to be revealed. Industrial and commerce departments all must adjust production, purchase, and marketing according to market needs. But many abundant products command high prices and large profits. Their output still cannot be reduced. Many scarce products command low prices and small profits. Nobody is willing to produce them. To adopt market regulation, we have to follow the law of value. Prices for abundant products should be allowed to fall, and prices for scarce products should be allowed to rise. If price departments do not actively make adjustment, and do not allow the law of value to assist us to make adjustment, great obstacles will be created for adjusting the proportional relations among departments of the national economy. This phenomenon is even more serious in the allocation of producer goods because of overly strict control.

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