Relying Mainly on Planned Economy with Market Adjustment Supplementary

The thesis was made at the 12th National Congress of the Party in September 1982. It was determined as the target model of China's economic system reform at its initial stage and an important principle guiding economic construction at that time. The report of the Twelfth CPC National Congress pointed out: “Our country, through the comprehensive balance of economic planning and the auxiliary role of market regulation, guarantees the proportional and coordinated development of the national economy... Correctly implements the principle of the planned economy playing a leading role and market regulation as the supplement, which is the fundamental issue in the economic system reform.” 1978-1992 was the transitional period of China's Reform and Opening-up from the planned economic system to the exploration and development of market economic system. How to understand the planning and the market was a major theoretical and practical issue in this period.

In April 1979, the Central Working Conference proposed that the national economy should “focus on a planned economy while paying full attention to the auxiliary role of market regulation.” In November 1979, Deng Xiaoping proposed that “Socialism can also engage in market economy”. This was a major breakthrough in the traditional concept of the socialist economic system. The “Resolution on Certain Historical Issues of the Party since the Founding of the People’s Republic of China” passed in June 1981 stated, “A planned economy must be implemented on the basis of public ownership, and at the same time the market regulation must play an auxiliary role.” At the same time, he pointed out, “There is no fixed model for the development of socialist production relations. Our task is to create a specific production relation pattern that is compatible with it and facilitate continuous progress at each stage according to the requirements of China’s productivity development.” In November 1981, the “Government Work Report” passed at the Fourth Session of the Fifth National People's Congress further stated, “Correctly understanding and handling the relationship between planned economy and market regulation is a key issue in reform.” The basic direction of our country’s economic system reform should be: Under the premise of insisting on the implementation of a socialist planned economy, give play to the auxiliary role of market regulation, and we should also fully consider and apply the law of value when formulating plans.

The principle of “Planned economy playing a leading role, supplemented by market regulation” proposed at the Twelfth CPC National Congress was of positive significance at the time. It clearly stated that the socialist economy must use the market mechanism and regard the use of market regulation as a basic aspect of economic reform, which had important guiding significance for the economic reform in the early 1980s. In this principle, the mandatory plan is still regarded as the essence of the socialist economic system and the basis of the entire economic operation, and market regulation is in a subordinate and secondary position.