China’s reform. The slogans allow Chinese Leaders to grope for new policies through experiments step by step. We can explain features (2) and (3) in this way.

For example, the origin of the “Household Contract Responsibility System (HRS)” was an unofficial and even illegal whole contract style which re-emerged in Anhui province. If China did not take the flexible “seek truth from facts” approach, the HRS system would not be realized and China would face serious agricultural production problems.

Feature (1) is unique. China itself realized its problems by 1978. At that time China needed no macroeconomic stabilization. Instead, it recognized its low productivity, low economic development and low living standards. “Excess concentration of authority to the higher organization” is another point. These also provided for point (4), decentralization of decision-making in all areas of the economy. $ ^{22} $

Checking the philosophy in China’s economic reform, we can find that China did not intend or was not aware of moving to the market system at the first stage.

Before the Third Plenum of the 11th Party Congress in December 1978, all aspects of the economy were operated under the command system. In the old regime, the market and the commodity economy were defined as a negative inheritance of capitalism.

At the Central Working Conference and the Third Plenum at the end of 1978, China decided to introduce some reforms to solve its economic problems. There, Deng Xiaoping clearly pointed out problems in China's system and the necessity of reforms. On March 1979, Chen Yun discussed "Plans and Markets." In his speech, he said that "Planning is the main measure in controlling the economy. The market is needed but only as a supplement to the plan." This philosophy is famous as the "Bird-Cage Economy" philosophy. The speech clearly shows that the main idea of China's economic reform was nothing but reform within the framework of the command economy. $ ^{23} $

At the Third Plenum of the 12th Party Congress in October 1984, the situation radically changed. As a result of the advancement of economic reforms in the rural areas and preliminary installation of market mechanisms, it gradually became impossible to keep the market in a bird cage. At the Plenum, “Decision on Reforms of the Economic Structures” was adopted. Besides accelerating the reform into urban areas, the document officially and clearly recognized market mechanisms as important elements in the socialist economy. Traditional frameworks that defined the commodity economy as an opposite idea to the socialist system were by that time abandoned. The new socialist economy was defined as a “plan oriented commodity economy based on the public ownership.” Here, planning coordinates the economy and the economy mainly performs under a market mechanisms. This system was also called the “socialist commodity economy.”

This idea, which means that the market is the central measure of macroeconomic management, was further clarified at the 13th Party Congress in October 1987. The theme of the congress was “accelerate and deepen the reform.” China tried to unify the plan and the market system, and declared that “the state regulates the market, and the market guides the enterprises.”

Following this, China began to experience an overheated boom and had to adopt strong stabilization policies at the Third Plenum of the 13th Party Congress in August 1988. The Fourth Plenum of the 13th Party Congress was held in June 1989. This Plenum was held just