the Transition Process in China: A theoretic and empirical Study

In this paper we analyse the driving forces of the transition from plan to market in China. A two segments and two sectors model is constructed to take into account the particular economic situation in China during the transition process: a large agricultural sector and an industrial sector; a large centrally planned segment and a market segment. The transition from plan to market is described by the increasing share the market segment in the whole economy on the one hand and the forced adjustment of the behaviour of the planned segment to the market situation on the other. Thus this model provides a well structured way to understand the complex phenomenon during the transition process and to analysis the driving forces of the transition process.