| The years 1949-1956 mark an important period of China's economic development, during which a great transition from an economic system characterized by a combination of planned economy and market economy to one characterized by planned economy in high centralization and unity. Since the year of 1953 the planned economy gradually gathered force and eventually weakened and crowded out the factors of market economy, and thereby completely terminated the nation's marketization in economy.The termination of the marketization of China's economy has many reasons at different levels, the critical one being the expansion of the planned economy. The termination can be divided into two phases: 1) the period from 1949 to 1952 and 2) the period from 1953 to 1956. During the first period, market played an import role in the resources allocation in the early years of the New China. It is stated in the Common Principles, document that functions as a temporary constitution, that the five economic factors should be in cooperative coexistence. And parallel to this, some guiding principles were issued that outline the nation's economy development should be compatible to both state-owned and personal-owned enterprises, profitable to both capitalists and laborers, and should encourage the mutual help between urban and rural areas as well as the intercourse at home and abroad. Being adaptable to the economic form of New Democratism, these principles accelerated the speedy restoration of national economy, but at the same time brought out many contradictions in the economic operation. Since 1950 some measures adopted diminished the factors of market economy, leading to China's abortion of the New Democratic economy.During the second period, planned economy gradually taken root in China.The application of the fist five-year plan signaled the establishment of planned economic system, i.e. planned economy took place of market economy in resource allocation. By 1956, the socialist reform on privately owned production material and the major targets of the first five-year plan had been completed and from hence a planned economy has been established with distinctive features. The macro economic management system is in high centralization and unity; the economic adjustment system is essentially operated by instructive plan and all projects are modeled by a combination of government and enterprise. Meanwhile the subject of market faded out, the market of productive factors basically disappeared and the market lost its function of resource allocation. By 1956 planned economy had been realized in Mainland China and the pattern of coexistence of planned economy and market economy had been replaced by the pattern of sole planned economy. The marketization of economy is thus terminated and the 20-year long ruling of planned economy commenced henceforth.Historically speaking, the 50's of the last century, just like the 80's and 90's, mark the transition of the nation's economic system. After a 20-year rupture, China's economic marketization set off afresh, and today's economic reform is actually an establishment of the socialist market economy on the basis of the market-oriented economic reform embarked since 1979. This is by no means a coincidence. The reasons and experiences merit a serious and careful exploration.This thesis consists of three parts:Part one deals with the termination of the economic marketization in the early days of New China. The coexistence of planned economy in the early days of New China, promotes the revival of national economy. With the enhancement planned economy, there appear dynamic changes between factors of market economy and factors of planned economy. And the latter gradually crowded out the former from the economic operation and by 1956 had grown into a dominatingforce in economic system, thus bringing to an end the economic marketization.Part two: It proves multiplicity of the causes behind the termination. In addition to the Party's understanding of socialism and realization of th...
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