<正>In the three decades between the founding of New China in 1949 and implementation of the reform and opening-up policy in 1978, China practiced a unitary economic system in which public interest took precedence over that of individuals and localities. This system proved effective in pooling and optimizing limited national resources, especially during the initial period of the People's Republic when the industrialization process started from scratch. Its drawbacks, however, manifest in the inhibition of human initiative and the country's modernization, gradually became apparent as the Chinese economy grew.