Equity and Efficiency in the Distribution of Non-Food Consumer Goods in China: Shanghai as an Example

Abstract

Every country concerns itself to some extent with the efficient and equitable distribution of goods to its people. But the policy of capitalist or mixed economy countries is to let manufacturers, wholesalers, and retailers compete to provide the goods at the time, place, and price desired by the customer. As a rule, neither government policy nor the distribution process is set up to ensure that people will get the particular goods for a set price or at a given location. Prices are a function of the relative power held by consumers, distribution channels, and producers. Location is a function of customer demand. It is assumed that the discipline of the marketplace will keep the system operating with reasonable efficiency. In a planned economy, of course, a central authority assumes much more responsibility and control over the production, delivery, and the price consumers pay for goods. Government determines the rules for interplay among institutions based on its perceptions of what constitutes the greatest economic and social benefit to the country. This is not to say that the world falls neatly into these groups. Among the world's economies, equity and efficiency are assigned different weights depending on internal and external political and social factors. Just as the government and private sector relationship relate differently in Great Britain, the United States, and Japan, so do the planning, production, and distribution mechanisms in the USSR, East Germany, and China. This article describes how China, whose system is heavily dominated by the question of equity, tries to balance its concern for equity with the need