The Study On The Economic Interest Harmonization Mechanism In The Economic Transition Phase Of China

The economic interest is the core issue of economics. Based on the it, the political economics and economics both have established their individual theory system. Although they have different perspectives, even totally opposite on the nature, the root of interest conflict, as well as the solving method, in both theories it is commonly agreed that interest relationship is the essential relationship of the society, and the interest alignment is the base of social harmonization. China started its market-oriented economic transition since 1978, whose nature is the interest adjustment and redistribution. During this process, there has been radical change in respect of institutional system and social interest, and a series of interest contradiction and interest confliction appear thereof. The paper focus on the background of the economic transition. The fair and just systematic analysis method is applied to comprehensively research on the institutional basis and mechanism regarding to economic interest harmonization in the theory of economics, then the institutional characteristics for the period of economic transition, which is named as "Dual- track system" and its consequences are analyzed. Moreover, by examining the government's behavior, in the paper the main reason and formation mechanism attributing to interest conflict is disclosed. And eventually the options have been put forward to help to realize the economic interest harmonization.China's economic transition was a gradual institutional system changing process directed by government. The most important feature of this process is the "Dual- track system", which means two models of economic resource allocation system coexisting, namely, market-oriented and authorization-oriented systems. However, on one hand, the imbalance position between government and market and government's compulsory power stress to market inevitably result in the intensification of governmental administrative power. On the other, there is no sufficient and effective supervision and restriction mechanism towards the government's officers. Hence, it has all contribute to the convenience for government officers to seek on their own interest. Meanwhile, different government agencies have institutionalized their own interests by introducing "Department Legislation" approach, which has resulted in discriminatory institutional supply, which has exacerbated the economic interest conflict during the transformation period.The pursuit for its own interest has intensified the opportunism tendency of government behavior; made government agencies very active in economic construction, pursuing in maximizing fiscal revenue and intensifying the administrative power to control and intervene the economy. But on the other hand, government has neglected the responsibility of its public service function, which has led to the government behavior exceeding authorization and responsibility vacancy. This not only hinders the development of social security system, protrudes the People's well-being issues, like education, medical care, housing, etc; but also makes income gap enlarge, productivity remuneration consistently dip, not parelleled with GDP; hence the internal demand showed insufficient and macro-economic structure distorted, increasing the potential economic operation risk.Because the fundamental policy for realizing economic interest harmonization has not been established, there is the serious inequity in respect of rights and opportunities distribution in our county, which is the main reason of the economic conflict during transition phase. Therefore, it is beneficial to study the interest alignment theory of economics and build the basic economic interest harmonization realization mechanism in China. For this purpose, this article puts forward the policy suggestion focused on refining fundamental institution for market economy of our country.