China: A new kind of ‘mixed’ economy?

Abstract

This article examines conventional categorisations of the Chinese economy. This is done because categories and their labels carry messages and influence thinking. Ideally, categories and labels should be accurate and informative, yet for those seeking to understand the conduct of business in China, current labels offer little guidance. The most common categorisation is as an ‘economy in transition’. This phrase is meaningful to economists, but too vague to carry meaning to the wider community. International diplomacy prefers to categorise China simply as a ‘market economy’ or as a ‘non-market economy’. China arguably has both. Others offer ‘liberal market economy’ or ‘co-ordinated market economy’ and more differentiated typologies also exist. Yet it may be most realistic to view China as a new kind of ‘mixed’ economy. In this view, the most accurate and most informative label currently available is the one coined by the Chinese themselves: a ‘socialist market economy’.