While true, the USSR (post NEP) is a good contrast to the Chinese model. The USSR attempted to centralize demand planning and price coordination across the whole economy.
They did, but there was still plenty local planning happening even within the Soviet system. What China shows is that it’s more efficient to push central planning even further to the top.
Yes, but it was local planning, which was a planning responsibility and scope delegated by central planning. Contrast this with China where there is a stock market and commodities market.
While the stock market does exist in China, it operates within a socialist framework, guided by the principles laid out by Chen Yun who advocated for a “birdcage economy,” where the market acts as a bird, free to fly within the confines of a cage representing the overall economic plan. This idea was adopted in the early 1980s,to allow for use of market forces to efficiently allocate resources, while the state maintained ultimate control over the direction and goals of economic development. In this model, the state still acts as the planner, setting the overall goals and priorities, while the market, acting as the allocator, determining the most efficient way to achieve those goals.
It’s also worth noting that the market operates under strict regulations to curb speculation and short-term profit-making, ensuring its primary function as a tool for economic development rather than a platform for wealth accumulation. The recent dismantling of the Alibaba Group into six separate business is a great example of the state overriding the market.
