The following is my lecture in Hong Kong,February 1990 as a Fulbright Senior Scholar:
Due to historical legacy, two political and economic systems have existed in China Proper with SAR in Hong Kong and Macao and Taiwan as a part of China.
The Chinese government has legal sovereignty and makes every effort to strengthen such goal with the economic benefits to be derived through the multiplier effects. The objectives are to stress macro economic planning with the promotion of private interests so that monopoly can be avoided by law but enterprises can be active to honor the market(price) system within the macroeconomic model of public interest under Socialism with Chinese characteristics.
China's structural reforms have already activated markets with enterprises playing a significant role in the circular flow for the best interest of the nation as a whole apropos of benign optimality with clear empirical evidence to date.
Business firms get the services of the factors of production and transform these productive inputs into useful commodities as output to realize production fuction. When commodities are produced, there are functional market system in evidence. The supply and demand mechanism can alter the compositon of output in a market economy. The ever-changing new equilibrium points would correspond to the new points on the society's production possibilities curve with conceptual understanding. Cf. Harvard Professor Richard T. Gill's textbook on page 19 and page 31 as my contribution in "Economics of the Public Interest."(4th Edition) To be verified by the publication in China Daily, March 6, 1996 on page 4.
Francis Shieh aka Xie Shihao. September 22, 2007
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