The Establishment of the Theory of Socialist Market Economy in 1992 and Its Rise as the Theoretical Pillar for China to Deepen Reform and Opening Up

Abstract

How should people determine the target model of China’s reform after the reform and opening up started in 1979? This was a question that people in various areas cared about and explored all the time. It was also a key area in the study of the Chinese circle of economics. After the political turmoil at the end of spring and in the beginning of summer of 1989, some people negated the market-oriented reform from 1979 and required to turn around and go back to the old way of planning-oriented system. But very few people responded to such an opinion. The majority of Chinese economists believed that people should adhere to implementing market-oriented reform, further bring into play the role of the market in allocating resources, and promote rapid economic growth. Yet some economists still had doubts and concerns about whether people could run socialist market economy in China and whether the theory on socialist market economy would work. Under such a circumstance, the fourteenth CPC National Congress in 1992 determined that socialist market economic system should be the target model of China’s reform and thus established the theory of socialist market economy. Such decision was naturally of immeasurable meaning to the deepening and development of China’s reform. It drove China’s reform and opening into a new stage of comprehensive deepening.