Planned Economy 计划经济

Planned Economy Planned economy is used in socialistic countries. China used planned economy from 1949 to On an important meeting, new Chinese leaders decided to transferred from planned economy to market economy. This transfer process lasts for a long time. Now Chinese economy is mainly market-oriented.

Characteristics of Planned Economy All enterprises (companies, factories, universities, etc.) are public. The government decides economic activities (e.g. What and how many a factory should produce each year, prices for each product, employees ’ salaries, etc.), not the market. A person ’ s salary depends on his educational level, age and position. People who are at the same age and educational level usually have very similar amount of salary. It ’ s very difficult to change a job, but people also don ’ t fired. People receive very low salaries, but housing, health, education, etc. are all free.

Characteristics of Planned Economy Only people who passed the college entrance exam can go to college. After graduation, they usually get good jobs. Enterprises who need new employees need to contact universities, who decide where the graduates go to. Students have to obey Each ministry is a whole “ society ”. E.g., there are universities, hospitals, elementary, middle and high schools, etc. in one ministry. Each enterprise is also a small society. E.g. there are usually a PreK-12 school and a small hospital attached to a university.

Advantages of Planned Economy People live very peaceful life without too much pressure. People are less sophisticated. The economy is usually stable and it ’ s less possible to produce too much than needed.

Disadvantages of Planned Economy People don ’ t have too much freedom. People lose motivations to work hard. It ’ s very unfair for talented people and hard workers. People become less creative. The government becomes too powerful. People who fail the college entrance exam can never change their life even if they are excellent in certain fields. It ’ s very difficult to marry someone in another city. Couples did so may end up being separated all their life.

Beijing Under Planned Economy

Beijing Under Market Economy