Since the reform and opening-up, China has succeeded in taking the new path of socialist economic development with Chinese characteristics. The vigor and vitality of the Chinese economy has attracted the attention of the world. However, there are various opinions about how to summarize the experience and significance of China’s economic reform and development.

In recent years, a new dogmatic thought has been in vogue in economics. It claims that there is only one type of economics all over the world: Western mainstream economics. This model, it is held, is a universal science without borders, like natural science, and is a general principle that China’s economic reform and development must follow.

Dominated by such a logic, a version of the mainstream economics on the Chinese experience has been formed: the Chinese experience, at best, is “transition economics,” which is a form of transition to capitalist standard market economy and has no universal significance of economics. Achievements of the Chinese economy are owed to the effective application of these “general principles.” Problems with the Chinese economy are attributed to deviation from these “general principles,”  and will bring about the collapse of the Chinese economy sooner or later if they are not completely resolved.

Suffice to say all elements that don’t conform to the standard patterns of mainstream economics are considered to have deviated from and distorted “general principles.” However, this idea is quite wrong and harmful.
 

We may learn from modern Western economics, which is universal since it reflects the motion law of the market economy to some extent. Meanwhile, it is specific. There are different schools of Western economics as well as different mainstream theories in different eras and countries.

Take neoclassical economics currently viewed as the Western mainstream, for example. It has been widely criticized by other schools of economics. It is thought to emphasize logic and neglect history, deny differences between people’s behaviors in different social systems and historical conditions, and exclude the influence of complex factors, such as technology, politics and culture.  
 

Generally speaking, based on the developed market economy, modern Western economics is not suitable for non-market economy systems. It needs carefully pondering whether modern Western economics is applicable even to market economy, due to essential differences between the socialist and capitalist market economic models. To date, the capitalist market economy is the most popular economic form. People are apt to take it as a model, regarding special rules of capitalist market economy as universal rules or “international conventions.”
 

It is well known that such phenomena as surplus value, average profit, monopoly capital and worldwide economic crises are not born with market economy, but result from small commodity production transferring to capitalist commodity production. In a socialist market economy based on public ownership, the aforementioned phenomena cannot completely disappear. They are to a large extent, however, adjusted and restricted along with the emergence of some new economic laws and operating characteristics.
 

It especially needs stressing that socialist economic theories with Chinese characteristics summarized from practical experience shouldn’t be simply treated as an individual case or exception. There is no doubt that the experience of economic reform and development have resulted from special Chinese conditions. Special economic and political structure, historical and cultural tradition, policies and guidelines and even the leadership style are all important components of Chinese characteristics. The Chinese experience may therefore not be suitable for all countries.
 

However, Chinese characteristics shouldn’t be separated from universality. Actually, all major issues in Chinese economic reform and development such as industrialization, urbanization and macroeconomic stability are common issues faced by all countries, especially developing countries.

Over a long historical period, it was believed that the market economy was applicable only to capitalism. The Communist Party of China broke through the traditional cognition. It not only put forward the theory of the socialist market economy, but also established the socialist market economy, realizing the combination of socialism and market economy for the first time in human history.
 

The theory of the socialist market economy is a great contribution to Marxism and the scientific socialism theory. It has also provided important revelations for developing countries to break away from poverty and fulfill national development. The Chinese experience is therefore both special and universal. 
 

China’s practice in economic reform and development has broadened the horizon of economics studies, challenging so-called “general theories” of Western mainstream economics. The historical mission of contemporary Chinese economics is to sum up experience and establish innovation theory on the basis of the actual conditions of China, making contributions to the great rejuvenation of the Chinese nation and human development.

 

Zhang Yu is a professor from the School of Economics at Renmin University of China.