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Question 2

Concerning the second question, the author believes that before the reform and opening up, i.e., before 1978, China's marketization degree could not have exceeded 15% and was a non-market economy. This is because before reform and opening up, labor basically did not move and was not a commodity.

Production was carried out according to plans; only the production from small quantities of land was traded on the market, prices were fixed, capital planning was very rigid, and only item that could not be controlled was export prices.

If we presume that before 1978 China's marketization degree was 5%, then by 1998 China's marketization level has been growing at a speed of 12%; we should say that the speed of reform is shocking. In this respect, the current marketization level is not bad.

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