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Question 1

Concerning the first question, since it is publicly recognized that developed countries have mature market economies, their degree of marketization can be confirmed to surpass 80%.

Here we can do a reverse analysis, namely analyze their non-marketized factors. Currently, the non-marketized sector of economies in developed countries are basically affected by the following two factors:

(1) state interference in economies in the forms of government management of military supplies and strategic resources, state acquisition and protection of certain industries by formulating laws and regulations; state adjustment and control of financial and monetary policies, the freezing of certain prices during special periods, and governments’ effect on the market through state-owned enterprises. It is estimated that this accounts for a 5% to 15% non-marketized degree of economies in developed countries.

(2) Effect of the distribution of revenue by non-market means, such as payment transfers. This is conducted through inheritance taxes, guarantees of the livelihoods of citizens living under the poverty line (issuance of food coupons and housing perks, etc), private donations, development of non-profit organizations, policies for relief for the elderly, sick, and handicapped, free universal education, and so forth.

According to statistics, 20% to 40% of the social security funds in developed countries come from public funds; half of the income of American states come from donations; 28% of American budget expenses are used in insurance and welfare; and 30% to 50% of agricultural enterprises' income in developed countries come from government subsidies.

Therefore, the transferal of payments may account for 10% to 25% of the visible and invisible income of individuals.

To sum up, the non-marketized degree of economies in developed countries account for 10% to 20%, meaning their marketization degree is 80% to 90%. Thus, though China's marketization degree is no more than 50%, it is already about 55% of the level in developed countries.

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