Kornai János - Qian, Yingyi: Market and Socialism. In the Light of the Experiences of China and Vietnam - IEA Conference 146. (New York, 2009) / angol nyelven
6 Julan Du - Chenggang Xu: Market Socialism of Capitalism? Evidence from Chinese Financial Market Development
[ulan Du and Chenggang Xu 89 Consequently, there is no need for financial markets as an institution for exchanges of productive assets. Moreover, as the state has an obligation to protect state properties and employs administrative power to enforce contracts, legal institutions designed to protect private property rights become redundant, or might even be in conflict with the will of the state bureaucracy. Finally, the absence of stock markets in market socialism literature is also due to the fact that, at the time of the market socialist thinkers (for example, Lange, Taylor, Lerner), there was insufficient intellectual understanding of the function of stock markets and law as an essential mechanism for corporate governance. It was not generally recognized that there existed severe incentive problems in state-owned firms, and these problems were caused by the separation of ownership and control similar to that in publicly traded firms in capitalist economies. In fact, even in his later years, Lange still did not realize the importance of incentive problems associated with state-owned firms, although these issues were raised by von Hayek to challenge the market socialist idea. Many of the later leading proponents of market socialism did not realize the central importance of the incentive issue either (see a survey by Bergson, 1967). Thus, law and finance as mechanisms of solving those problems were unsurprisingly absent in the market socialism literature. The Chinese government has claimed that its goal is to reform the Chinese economy into a market socialist economy. Although the coexistence of a large state sector and the increasingly dominant market forces makes the Chinese economic system appear similar to the features of market socialism in the literature, a basic fact might distinguish China from the literature: China has developed equity markets over the past decade on a large scale. However, in view of the fact that the Chinese stock markets are dominated by state-owned companies and are governed by an administrative mechanism, one could argue that these two features seem to fit well with the market socialism model. Although China's equity market, under administrative governance, bears a resemblance to a market socialism model, we argue that the Chinese financial market development is actually inconsistent with a market socialist model. The dominant state ownership of listed companies is only a transitory phenomenon in China's economic transition. Listed state-owned companies are issuing progressively more equities to individual investors, introducing more private shareholders into statecontrolled companies. More importantly, a general consensus or expectation among scholars and practitioners has been formed that as the Chinese securities markets develop further, the state-owned shares will