ABSTRACT

China's price problem underwent a complex evolution in the past 30 years. In February 1950, a decisive victory was won in the battle to stabilize market prices, with the state firmly in control. Following this, the state began to set prices for major industrial and agricultural products. But because of the co-existence of several economic components, the state had to correctly follow the law of value and the law of surplus value in setting prices. When the state placed orders with capitalist industries, it had to not only accurately calculate costs, but also allow a reasonable profit to the capitalists. When the state purchased agricultural products from peasants, it had to not only generate a reasonable labor return to peasants, but also regulate the output of various agricultural products by adjusting prices. We did a good job in combining plan regulation with market regulation until the socialist transformation of ownership in means of production was completed. During the three-year recovery period, market regulation predominated. But state planning gradually strengthened its guiding role. In the First Five-Year Plan, with the development of the socialist state economy, the emphasis was gradually shifted to plan regulation. But since the capitalist economy and the individual economy still existed widely, market regulation continued to play an important role. Therefore, state prices were basically in line with the law of value. Product prices constantly changed with changes in production costs and supply-demand conditions. At that time, the state's price policy was mainly to stabilize prices. Apart from reducing the price differentials between industrial and 64agricultural products, the question of price adjustment was not yet raised.