Peking`s Economic Policy After the Third Plenum of the CCP`s Fourteenth Central Committee

Abstract

The Third Plenum of the Chinese Communist Party`s (CCP`S) Fourteenth Central Committee in November 1993 adopted a Decision concerning the establishment of a ``socialist market economy`` which is of great political and economic significance. In addition to various market-oriented reforms, the Decision proposes related changes in other areas of society, including the bureaucracy, the legal system, and the tax system. Although the Decision demonstrates the CCP`s determination to promote a market economy, speeding up reform in the current situation may well spark off another wave of economic overheating and inflation. The proposed tax reforms may also provoke conflicts between the central government and the localities. Although the Party is attempting to maintain a politically authoritarian regime while at the same time permitting liberalization of the economy, it cannot resist the social changes brought about by its own reforms. Therefore, one may be cautiously optimistic concerning the prospects for a market economy in mainland China.