Dual track economy (Ofer Abarbanel online library)

dual-track system is an economic system in which the government controls key sectors of the economy, while allowing private enterprise limited control over the other sectors.[1]

In China, the government followed dual-track pricing until abolished in November 1989, known as “shuangguizhi” in Chinese. State-controlled (planned) prices, which were lower, accompanied the market prices, which were higher. This was done to ensure stability and gradual opening of markets (instead of a “big bang” strategy of sudden transformation to capitalism that was attempted in Eastern Europe and Russia). However, to provide incentive to the State-owned Enterprises, government allowed selling of the products at market prices after the planned targets had been met.[2]

References

  1. ^1981: Dual-track Price System — China.org.cn.
  2. ^Barry Naughton, “The Chinese Economy” (MIT Press, 2007)

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Ofer Abarbanel online library

Ofer Abarbanel online library

Ofer Abarbanel online library