Constructing the foundations of microeconomic analysis of Chinese economics : based on the theory of classified reform of state-owned enterprise

Purpose - Since the core issue of Chinese economics is to elucidate the logical relationship between socialism and the market economy, it necessitates a robust foundation for microeconomic analysis to uncover the behavioral patterns and characteristics of microeconomic agents in a socialist market economy and identify the conditions and methods for the functioning of market mechanisms. Design/methodology/approach - The core issue of microeconomics with Chinese characteristics is to identify the economic logic of how market mechanisms play a decisive role in resource allocation under the basic socialist economic system based on China's reform. Findings - The core issue in building the foundation of microeconomic analysis of Chinese economics is addressing the compatibility issue between SOEs and a market economy. Originality/value - In the author's view, this can be achieved under the logic of classified reform so as to build the microeconomic foundation for the effective functioning of a socialist market economy.