system was rejected. Direct administrative measures were used to fix every price.

## (1) 1979-1983

At the Third Plenum of the 11th Party Congress, $ ^{87} $ a new policy was adopted. At the Plenum, they decided to adjust the price structure between industrial products and agricultural products to reform the distorted price structure. In this context, the state monopoly purchasing prices for agricultural products and basic industrial products were raised. Prices of some products were also reduced. Raising the agricultural product prices stimulated the peasants' mind and improved their incomes.

In the price-adjustment policy, consumer prices were also raised. New systems were introduced to the price-decision system. For example, a price negotiation system was introduced to the state monopoly purchase system. A floating price based on official prices was applied to some industrial goods. The market mechanism was partially authorized, especially for non-important consumer goods. These new trials activated the economy. In this period, the main philosophy in pricing was “thought the fundamental concept is coordination by plan, market prices should be united with coordinated prices.”

## (2) 1984-1988

Price reform from 1979 was experiment in some aspects. The results seemed to be successful. The reforms adjusted price structures and stimulated agricultural production.

The Third Plenum of the 12th Party Congress $ ^{88} $ adopted the “Decision on Reform of the Economic Structures.” This document referred to enterprise reform and the price reform. The document stressed granting more power of decision to enterprises. This included the power of deciding prices. On price reform, it stressed building more rational price structures, and utilizing the price mechanism. A “Dual-track Pricing” system was introduced to deal with the situation. In this system, a planned quantity of products are traded at the planned prices, and excess products are traded at the market prices. This dual-track pricing system advanced the reforms greatly, especially by widely introducing to the society market pricing systems. Step by step, the role of the market become larger and more important in China’s economy until inflation reached a very high rate and China temporarily decided to focus on the stabilization of prices in 1987. Only prices of important materials were left under state control. After the Plenum, the concept changed to “Price mainly by the market, and unify the plan with the market.”

## (3) 1989-1991

From 1984 to 1988, under the dual-track pricing system, China succeeded in introducing market prices into its economy but also induced high inflation and many social problems like underground trading. $ ^{89} $

At the Third Plenum of 13th Party Congress in 1988, China decided to adopt an adjustment policy. Price controls were re-introduced on some materials (which were previously freed).

## (4) 1992-Present

After Deng Xiaoping’s spring tour in 1992, all reforms were accelerated again. Since then, price restrictions have loosened. Even now, the dual-track price system remains, but as the weight of market system increases, administrative prices are decreasing. The trend of transition to market pricing is clear.