Planned Economy Planned Economy Planned economy is used

Planned Economy 计划经济

Planned Economy • Planned economy is used in socialistic countries. • China used planned economy from 1949 to 1978. • 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-

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 Pre. K-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 Econom y

Beijing Under Market Economy