Concerning China's Establishment of a Socialist Market Economy

Contained in the Selected Works of Jiang Zemin Vol. 1. Part of Jiang Zemin's Speech on June 9, 1992, that is an excerpt from the speech "Profoundly Understand and Comprehensively Implement the Guiding Principles of Comrade Deng Xiaoping's Talks and Carry Out Economic Development, Reform and Opening-up Better and More Quickly" and delivered at a training course for provincial and ministerial level cadres at the Party School of the Central Committee. The speech argued that there is also planning under capitalism, and there are also markets under socialism besides other important points of view, summed up our Party's understanding of the problems of plans and markets and their interrelationship, and summarized the main features of our new socialist economic system. To accelerate the establishment of the new economy, we must solve five key problems as soon as possible: (1) Transform government functions and effectively separate them from enterprise management; (2) Promptly transform the way enterprises operate, especially large and medium-sized SOEs, actually promote enterprises' entry into the market, let them become competitors in the market and turn them into legal persons; (3) Satisfy the demands of the commodity economy and the law of value, we must effectively revise our conception of planning and transform the functions and forms of planned management in order to make planning genuinely reflect changes in market supply and demand; (4) Put great effort into nurturing and developing the market and creating a unified, sound socialist market; (5) Strengthen economic laws and regulations as well as other infrastructure necessary for economic activity.

The speech pointed out that the fundamental task of speeding up the reform of economic system is to establish a new socialist economic system as soon as possible. Since there were several different formulations of the new economic system which were more suitable for China's economic reality at that time, Jiang Zemin proposed:“We should continue to study which of the above formulations is the best for the Chinese economy, most acceptable to the majority of our comrades and conducive to our country's economic development. However, I think that in the political report to the14th National Congress of the CPC, we will make a final decision on a relatively scientific formulation of an economic system that most of our members can accept, one that is most conducive to uniting all Party members' understanding and action and to quickly establish a new socialist economy in our country”. Jiang Zemin’s personal views are more inclined to use the term “socialist market economic system”, which was also favored by most of the cadres and the masses.