Modeling the Private Sector in the PRC

Abstract

The development of private enterprises in the PRC has its own specific background. During the 1950s, the old Chinese capitalist economy essentially died out with the establishment of the PRC and the reconstruction of industry and commerce within the framework of a Soviet Union-style socialist economy. The socialist economy achieved miracles in some specific areas and historical periods, thanks to the guidance of socialist ideology, which advocated a spirit of dedication to others and society as a whole. However, in the long run this spirit ran against the intrinsic human nature of pursuing self-interest, and the traditional socialist planned economy was unable to attain economic growth on the level achieved by the capitalist economies.