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industrial products marketed by enterprises. Enterprises were allowed to set prices for their surplus products but these had to be slightly below local market prices.
In
the agricultural sector, the compulsory procurement quotas were replaced by a more lenient contract system, according to which state purchase of foodstuffs was undertaken.
19.
Due to reforms in the economic management and production system, the "non-planned" sector of the economy has been expanding rapidly. This implies that an increasing share of materials and products is now sold at floating prices or even negotiated prices. Before 1979, state prices applied to 70% of industrial products and 80% to 90% of raw materials. According to a Chinese estimate, in 1986, approximately 30% of all industrial and agricultural output was sold at market prices;
and 20% to
30% at floating prices. Less than half of the total is
now sold at state prices (3) The latest development was
•
that the prices of seven consumer items including bicycles, black and white television sets, refrigerators, washing machines, tape-recorders and pure cotton yarn and polyester were decontrolled in August 1986. In China, the co-existence of state-fixed prices and market prices for industrial raw materials and intermediate industrial products is described as the 'double-track price system'.
(3) These figures are from an article on 'China's
Price Reform in the 1980's' by T.M.H. Chan
(1986).
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