THEORIES OF "TWO-TRACK TRANSITION" AND THE REALITIES OF "MULTI-TRACK" PRICING

The 1990s, especially in the middle and second half of the decade, were a period of attempts in Chinese economics to build generalizing theoretical models of market transformation in the PRC. These models were based on several similar theoretical interpretations of the two-track pricing ^system1. Moreover, "two-track" was considered by the authors and proponents of these models not only as a method of price reform, but also as a kind of coordinate system for the entire socio-economic transformation of China, as well as as a basis for its theoretical understanding and stating its international significance. This is where the theoretical and journalistic calculations about the "Chinese miracle" (Lin Yifu et al., 1994), the "victorious market socialism" (Zhang Yu, 1997), and the special Chinese "political economy of market reforms" (Li Jun, 2006; Fan Gang, 1995, 1996; Zhang Yu, 1997; Sheng Hong, 1996]. These calculations also had a certain impact on a number of foreign experts, who put forward, for example, the concepts of "market outgrowth" (Naughton, 1994, 1995), "Beijing consensus" (as opposed to "Washington consensus") (Ramo, 2004), and "systemic recusal" (Csanadi, 2006).

A certain inconsistency was revealed from the very beginning in the fact that Chinese economists and publicists began such far-reaching theoretical generalizations of the "two-track model" just at a time when, according to the official periodization of reforms, this model, at least in the field of pricing, has passed into history. However, this can be explained by the fact that, as already noted, "two-track" was understood this time not in the relatively narrow context of price reform, but rather in a broad extra-

For the first article, see [Vostok (Oriens), 2011, N 3].

¹ Sheng Hong, explaining why the theoretical models of market transformation of the PRC economy were based on price reform, writes: "In the 1980s, the reform of the pricing system was central and most difficult among other market reforms. Both the government and theoretical economists saw it as a key step in market transformation... Most experts have come to a consensus on the need to replace planned pricing with market pricing. Due to the fact that the price system is not only an informational guide to resource allocation, but also a certain model of distribution of interests, the main difficulty in the pricing reform was how to implement market prices while minimizing the violation of the existing balance of interests [in the system]. Otherwise... protests [against the reforms] could cause a slowdown in transformation or - through influencing monetary policy-high inflation, which would make reform itself impossible. In the course of studying the pricing reform, many experts have fully realized that the issue of the distribution of interests model is a key issue for the reform. Therefore, economic theories of China's transition [to the market] we focus on discussions about the theory of pricing reform" [Sheng Hong, 1996, pp. 76-77]

It was polished for the entire socio-economic system of the PRC and in this sense, according to some authors, continued to exist. Thus, in the Chinese science and journalism of the reform era, at least three meanings of the term "two-track model" can be distinguished:" two-track "pricing in the broad sense (sector pricing option)," two-track "pricing in the narrow sense (proportional pricing option), and" two-track " as a transition (from plan to plan). the state of the country's socio-economic system as a whole ². This ambiguity, coupled with the close interweaving of sector-based and proportional pricing options noted above, as well as the artificiality of many theoretical constructions of the 1990s, which will be discussed below, made the use of the term "two-track model" methodologically rather difficult. At least since the beginning of generalizing theorizing in Chinese literature in the mid-1990s.

BASIC THEORIES OF THE "TWO-TRACK TRANSITION"

In the first half of the 1990s, a number of Chinese economists came up with the concept of "non-system reforms" (tizhi wai gaige) [Miao Zhuang, 1992; Sheng Hong, 1992; Fan Gang, 1993; Lin Yifu, 1994]. Its essence was that the reforms in the PRC did not go through the rapid and purposeful dismantling of the "old" system of planned economy with all its political, administrative and economic institutions and practices, but began to create a "new" market environment on an off-system field, next to and in parallel with the "planned system" environment. According to these experts, such a path of transformation has made it possible to significantly reduce the possible costs of reforms: to minimize the resistance of the "planned system", to preserve socio-political stability, to create a new balance within elite interests, etc.The framework of this model was the" two-track " pricing practice. The mechanism of price formation is one of the key factors determining the model of behavior of economic entities in the economic environment. The parallel existence of" planned "and" market " prices in the Chinese economy contributed to the formation of a two-pronged economic space. Moreover, "two-track" pricing and related "off-system reforms" have created a new ownership structure. If in the space of the "planned system" the absolute dominance of the state remained, then in the new "non - system" space, alternative forms of ownership - individual, cooperative, private-as well as new forms of production and economic entities-gained advantages. In particular, individual peasant farms (in the context of a farmstead contract in rural areas), countless small and medium-sized producers in the service and trade sectors, rural and settlement enterprises.³ It is easy to see that the concept of "non-system reforms" is a theoretical generalization of the sector model of "two-track" pricing.

Almost simultaneously, Chinese experts put forward the concept of "progressive reforms" ⁽ tsengliang gaige) - in fact, a theoretical generalization of missile defense-

² In the context of a broad socio-economic extrapolation of the "two-track model" terminology in the second half of the 1990s, some Chinese economists pointed, for example, to the "two - track" nature of reforms in the industrial public sector [Zhang Yu, 1997, pp. 293-299].

³ The well-known Chinese economist Wu Jinglian wrote figuratively in this regard: "[The point is not] to cling to state property with your teeth and preserve it at all costs, but to bypass it, to find new points of production in a non-state economy guided by the market " [Wu Jinglian, 1994, p. 51].

⁴ A successful translation of the term "Incremental reform" into Russian as "incremental reform" was proposed by the Russian sinologist-economist O. N. Borokh in her translation of Fan Gang's article [Fan Gang (translated by O. N. Borokh), 1995].

a portion - based model of" two-track " pricing [Hu Ruyin, 1992; Fan Gang, 1993]. The point here was that enterprises located within the "system planning" field, after completing the tasks set by the state, can sell over-planned products on the market. A gradual decrease in the planned and an increase in the market share of products and services in the initially planned "system" field should eventually lead to a significant reduction in its volume in the country's economy. In the long run - to the final dominance of the market space. It was assumed that the corresponding changes will gradually occur in the areas of property, labor relations, in the principles of political and administrative regulation, etc.

In the first half of the 1990s, these concepts were proposed and discussed in a small and somewhat fragmentary format of journal articles. However, in the middle and second half of the decade, China published several monographs claiming to be theoretically fundamental in terms of understanding the Chinese path of "gradual reforms". Two of them should be discussed in more detail.

The first book entitled "Analysis of the political economy of gradual Reforms" ("Zhujin gaige de zhengzhijingjixue fenxi") Fan Gang treats political economy in terms of public choice and motivation, and in this respect can be considered a follower of neo - institutional approaches in the spirit of D. North (North, 1990), to which he actively refers (Fan Gang, 1996, p. 152).. At the same time, Fan Gang does not act as an institutionalist theorist, using elements of neo-institutionalism only in the context of analyzing economic reforms in the PRC. From his point of view, the choice of a "gradual" or "radical" reform strategy is determined not so much by the country's leadership - the government (although outwardly it inevitably takes the form of the highest political sanction), but rather by the correlation of various interest groups in the system and the presence of a particular public (internal) request. The Government acts as nothing more than a moderator of the interests of various groups and a respondent to a public inquiry.⁵ Moreover, Fan Gang believes that the very concepts of "gradual" or "radical" reforms are nothing more than descriptive categories used after the fact to characterize certain transformations [Fan Gang, 1996, p. 190]. Pointing out the differences between the reforms in the PRC and those in the USSR and the socialist countries of Eastern Europe, Fan Gang writes: "The main feature of gradual reforms in our country [China] consists in the fact that, given the great resistance of the old system, we did not touch it, and next to it, around it, we began to develop a new system, or new economic structures. With their expansion, constant changes in the economic structure, and improvements in the system environment, [we] gradually began to move towards reforming the old system. In the former USSR and Eastern European countries... it was necessary (and only possible) to start reforming the old system from the very beginning... The main point of gradual reforms is that they are incremental reforms. Used by

⁵ Here Fan Gang enters into a polemic with the famous Chinese economist Lin Yifu, author of the monograph on reforms in the PRC "The Chinese Miracle: Development Strategy and Economic Reform" ("Zhongguo de qiji: fazhan zhangliue yu jingji gaige"), published in 1994. Lin Yifu argued that the success of reforms in the PRC is crucial it was determined by a well-thought-out policy of the country's leadership. Fan Gang polemically observes: "Perhaps some believe that China's entry into the path of gradual reforms is due to the greater wisdom of the Chinese. Accordingly, this means that those who made political decisions in the former USSR and Eastern Europe were not wise. I do not in any way deny the key role of political leaders in social transformation. However, making a decision is one thing, and the space to choose that decision is quite another. In conditions of deep social crisis and instability, when gradual reforms carried out over many years have not yielded results, the wisest decision has to be chosen from a very narrow range of alternatives. In this case, any choice will be painful, even if it is wise, but far from ideal" (Fan Gang, 1996, p. 175).

D. North the concept of incremental reforms ("incremental reforms". - M. K.) is much more accurate for their definition than the concept of gradual reforms ("gradual reforms" - M. K.), which indicates to a greater extent the speed [of reform implementation]" [Fan Gang, 1996, pp. 152-153].

Fan Gang closely links the success of "incremental reforms" in China to the successful introduction of " two-track "pricing, while acknowledging its serious costs, and uses the terminology of" two-track " to describe other reforms.⁶ He pays special attention to the non-state sector that has emerged in a new field, directly linking the final success of the" two-track transition " with its development.

To understand the logic of Fan Gang, as well as other adherents of the "two-track transformation", it is necessary to keep in mind that the term "remaining volume" is used to describe the "old planned" system (also possible translation of "residual volume" is "cunliang"), and for the new "market field" - the term "remaining volume".increasing volume ""zengliang"). Obviously, this should be understood as a statement of the gradual but constant expansion of the new field and the reduction of the old one. Fan Gang, in particular, notes that all points of effective economic growth are located in the new field, and under the influence of this circumstance, the public sector, which almost entirely belongs to the old field, simply cannot help but change. The author admits that the "two-track transition" will be quite long, but in any case it will occur within the lifetime of one generation.

At the same time, the author clearly contradicts himself when he points out elsewhere that the old system in a "two-track" state is quite capable of successful regeneration and even extended reproduction. In another passage, Fan Gang generally writes that since the new sector provides such good revenues, "the need to reform the old system becomes, in a sense, even less urgent than before "(Fan Gang, 1995, p. 64). The author lists the problematic "birthmarks" of the old system, which continue to persist even in the "two-track" state: incomplete liberalization of prices and bank interest, monopolism, subsidizing unprofitable industries, soft budget restrictions for most state-owned enterprises and low financial discipline, lower profit margins, etc. Fan Gang also notes the emergence of groups of lobbyists who parasitize the " two-track model "and are interested in preserving the ability to extract rents from such a" transition " state for as long as possible. It is also noteworthy that Fan Gang invariably refers to the "old planned" field as the "tiji system"), and the new market space - when as the "system", when as the "new economic order" (xinde jingji chengfen), and when as simply the "market economy" (shichang jingji"). In general, we can say that Fan Gang's monograph is a kind of consolidated theoretical manifesto of "two-track transition" and"progressive reforms".

The second major monograph on the theory of "two-track transition" was the work of economist Zhang Yu "On the road of transformation: an analysis of the political economy of gradual reforms in China", published in 1997. Unlike Fan Gang, Zhang Yu does not associate his work with foreign "systems theories" or neo-institutionalism. He is completely absorbed in the"political economy of Chinese reform". Besides,

⁶ In particular, he writes about the "two-track" property reform in the sense of the parallel existence of state and non-state property. In the field of labor relations, a simultaneous combination of lifetime employment for existing employees and the introduction of a system of employment agreements for newly hired employees is practiced. In the field of housing construction, there is a combination of distribution (sale at low prices) of housing for waiting lists with the possibility of buying residential space at full cost, mortgage lending, etc.

Zhang Yu's book is noticeably more "politically correct", sometimes sounding almost official. In particular, he does not tire of repeating that, unlike the "radical reforms" in the former USSR and Eastern European countries ,the "two-track transition in Chinese "implies maintaining loyalty to the" socialist choice " and the ideological and political leadership of the ruling Communist Party [Zhang Yu, 1997, pp. 89, 97, 159, 171-172]. This, according to Zhang Yu, contributes to the preservation of "systemic stability, strengthens the authority of the party and creates a favorable general atmosphere for further transformations" [ibid., p. 158]. Nevertheless, in the course of his analysis, the author makes a number of very important comments and clarifications. So, he emphasizes that it would be a big theoretical mistake to completely separate the " old planning field "from the"growing market space". In his opinion, the reforms are being implemented simultaneously both outside the "remaining system" and within it. The development of farm contracts in rural areas, non - state ownership, and the rejection of the upper limit of price fluctuations for over-planned products are "out-of-system"reforms. And the reform of the public sector, the introduction of directors ' contracts and joint-stock ownership, changes in the budget, financial and tax spheres are reforms "within the system". So "old and new are related to each other and inherit from each other". At the same time, however, "the former economic structure, political structure, and structure of [public] interests retain relative stability and do not completely lose their historical foundation" (Zhang Yu, 1997, pp. 93-94). At the same time, the author clearly emphasizes the need to reform the "old system". At the same time, he admits that at present, "incremental reforms" are not able to create sufficient conditions for the market transformation of the "planned space". Zhang Yu notes the deep internal inconsistency of gradual reforms, points out the enormous difficulties in the field of administrative reform, the separation of political leadership from economic leadership, the growth of corruption and non-transparent lobbying [ibid., pp. 197-198, 215].

Following Fan Gang and other proponents of the "two-track transition", Zhang Yu understands "two-track" broadly - it is not only price reform, but also property reform, administrative reform (the degree of market coverage of various regulatory and regulatory institutions varies), regional differences in the ratio of the "old" and" new " economic fields. The transition from "old" to" new "is a long process, and" two - track " will continue for a long time. The author emphasizes that the core of "gradual reforms" is the assumption that state ownership and the market economy are compatible [Zhang Yu, 1997, p. 100]. As a result, China should develop "a complete two-pronged planned-market economic system based on the model of a government-led market economy." At the same time, the government's actions should be conditioned by "checks and balances" of both a planned and market nature [ibid., p. 244].

Overall, Zhang Yu paints a rather contradictory picture. Confidence in the correctness of the "socialist choice" and in the benefits of one - party rule for deepening reforms goes hand in hand with the statement of their duration and complexity and, most importantly, with the recognition that the systemic breakthrough of "progressive reforms" has not yet taken place. At the same time, it is extremely important that, unlike Fan Gang, Zhang Yu not only clearly points out the importance of expanding the "market field", but also emphasizes the need for market transformations in the "old planned" system space.

In foreign Sinology, the study of the features of the "two-track transition" in the PRC is given a much more modest place than in Chinese literature. In addition, a few Western publications on this topic, including those that claim to be theoretical generalizations, generally follow in line with the concepts of Chinese authors.

adherents of "two-track political economy", preserving or reproducing their internal inconsistency ⁷ [Chen, Jefferson, Singh, 1992; Csanadi, 1998, 2006; McKinnon, 1993; Naughton, 1995].

"MULTI-TRACK MODEL" IN PRICING: BASIC STRUCTURAL AND DYNAMIC CHARACTERISTICS

The basic theoretical and practical problem (incorrectness) of all the concepts of the "two-track transition" without exception, from my point of view, was that their authors implicitly sought to separate the " planned "space from the" market "one and present the" transition "itself as a gradual but steady expansion of the" market "and narrowing of the"plan" one. Even the recognition of serious difficulties and contradictions along this path in general did not affect this logic of describing the transformation process. Meanwhile, as I showed in my previous article, back in the late 1980s, Chinese scientific periodicals noted that in reality it was almost impossible to separate the planned component from the market one, both at the micro and macro levels [Diao Xinshen, 1989, p. 14-18]. It seems that we should speak not so much about the "retreat of the plan under the pressure of the market", but about the dynamic and unregulated, opaque interaction and interpenetration of the "planned" and "market" spaces. This approach is also supported by the confusion and contradictions in the works of adherents of the "two-track transition", who are forced to recognize the "non-linearity of transformation" [Csanadi, 2006, p. 201], the ability of the "old system" to self-preservation, to "regeneration" and even to "extended reproduction" [Fan Gang, 1996, p.188]. My position is that the "two-track system" in its "pure form" existed only at the level of a specific enterprise (production association), and at the initial stage of reforms and for a very short time. At the more aggregated system levels, a rapid process of forming a dynamic symbiosis of "planned and market" spaces immediately began. The attempt to "counter-reform "in 1989-1991 in the sense of" recentralizing " pricing in a number of heavy and extractive industries, faced with the resistance and sabotage of industry and regional lobbies, administratively and economically interested in preserving the "symbiosis", actually had the opposite effect. There was a further fragmentation of pricing mechanisms, both in the industry and in the regional context. There is no reason to believe that this fragmentation has led to fundamental price liberalization8.

⁷ The most notable generalizing works are written by B. Naughton [Naughton, 1995] and M. Chanadi [Csanadi, 1998; Csanadi, 2006]. American sinologist and economist Barry Naughton formulated the concept of "growing a market economy out of a planned system" during the reforms in China. "Growth" means, on the one hand, the emergence of a new market sector, and on the other - its outstripping growth in comparison with the traditional planned sector. This concept is based on an extended interpretation of the proportional model of "two-track" pricing. Naughton's views were highly appreciated by Chinese proponents of the "two-track transition" theory [Zhang Jun, 2006, pp. 293-294].

⁸ V. V. Zhiguleva notes in this regard:"...Price reforms are not irreversible in China (unlike in Russia and other Eastern European countries). Almost all measures taken in the field of pricing policy involve a temporary return to the old practice in the event of a complication of the socio-economic situation in the country. We should not exclude the possibility that many measures to expand the scope of reforms were declarative in nature on the ground and prices remained under the control of local administrative and party bodies. If all the measures announced by the central government to liberalize pricing were implemented in practice, this would mean almost complete freedom of prices and create a real danger of falling into an inflationary "tailspin", the usual way out of which practically does not work in a transition economy" [Zhiguleva, 2006, p. 114]. From the point of view of my research, it is not so important whether "for good" or "for evil" the price reform in the PRC was partly "declarative" and did not become irreversible. The main thing is that I didn't!

There was a largely spontaneous, forced and non-transparent redistribution of powers to regulate the" planned-market frontier " in pricing in favor of local party-state bodies (local governments at all levels). In this regard, it is characteristic that Zhang Guangyuan admitted that "it is still necessary to understand what the functions of [central and local] governments are in the field of pricing" [Zhang Guangyuan, 2002, p. 95]. At the turn of the new century, Chinese experts noted that the structure and price ratio in the Chinese economy are still irrational and perverted. The reform touched upon the regulation of the price level, but did not change the pricing mechanism itself (read - the "planned market frontier" remains in the hands of governments). The "release" of prices for many goods and even some types of raw materials did not lead to an increase in the market component in the country's economy (He Xiaodong, 2000; Zhang Guanyuan, 2002). On the ground, there were numerous structures that were responsible for monitoring prices that were already "exempt": "councils for rational pricing", "industry councils for pricing", "village and village pricing committees", "control departments for prices at the level of microdistricts", " departments for pricing at enterprises and associations of enterprises". In 2000, 42 provincial and city "scientific societies on pricing" established "advisory councils on pricing". All of these bodies were somehow subordinate to local governments at different levels and exercised "control over the stability and order in pricing", provided" consulting services "to local authorities in the field of pricing, "improved pricing mechanisms directly in production" "by combining legislative, administrative and economic methods, as well as through public opinion" [Chen Zhiping, 2006, pp. 596-604].

The "Pricing Law" adopted in 1998 in the People's Republic of China was perceived by the Chinese expert community as a whole very critically. It was noted that it is more the result of generalizing the experience of combating economic overheating in 1993-1997, rather than a viable mechanism for regulating market pricing. In particular, the law lacked clear definitions of price manipulation and methods of its suppression, did not explain the difference between "the government that sets prices and the government that manages [pricing]"⁹, did not clearly distinguish between the authorities responsible for pricing of local governments and enterprises, etc. [He Xiaodong, 2000, pp. 123-132; Zhang Guangyuan, 2002, pp. 98-100; Chen Zhiping, 2006, pp. 420-471].

Simultaneously with the adoption of the "Law on Pricing", the central government put forward a directive for local authorities in the field of price regulation: "set principles, be an arbiter". In fact, it was a call from the reformist part of the Beijing leadership to the local authorities to implement the maximum possible price liberalization in practice, to abandon hidden, "non-normative" manipulation of them. Assessing the results of the implementation of this system, Wang Yang, a senior official of the State Council's Pricing Department, said in his speeches at the national price regulation workshops held in Shenzhen in December 2000 and Nanjing in July 2001:: "On the issue of pricing, we are still faced with [governments] 'exceeding' their powers in the sense of unwillingness to release those prices that [should have been released long ago] "[Zhang Guanyuan, 2002, p.114].

This is the situation when the central government reserves the right to direct pricing in the sphere of natural monopolies and for a limited range of other raw materials and goods, when local authorities widely practice a variety of "regional-industry" forms of " planned-market symbiosis-

⁹ These statements are taken directly from the text of the "Pricing Law".

for", and the prices of export-made products and their capitalization depend on the global market situation, I suggest calling it a "multi-track" pricing model. On the one hand, this model can be conditionally considered as a "transitional form", due to its objective "planned-market" duality. On the other hand, it seems to me that the "multi-track" model itself is a well-established and fairly stable coordinate system. It differs from both the "planned distribution" and"market" ("liberal" and "Keynesian") models. Well-defined political, administrative and economic institutions, socio-economic practices, and stable coalitions of "public interests" have been formed within the framework of the "multi-track system". In this sense, the problem of " market transformation "in modern China is no longer a question of moving "from the krinku plan", but a question of moving from the "multi - track" krinku model. In the area of price reform , this is the transition from "multi-track" pricing to market pricing. The conditions, nature, and dynamics of such a transition obviously cannot be described in terms of "two-track transformation" in the spirit of Fan Gang, Zhang Yu, B. Naughton, and M. Changadi. The concepts of the "two-track transition" explain a lot about how the "multi-track" model was formed, but they are clearly insufficient to understand the logic and ways of its development and transformation. First of all, it is necessary to define the basic load-bearing structures of the "multi-track" model, which, in fact, combine such a variety of" planning and market mechanisms " that inevitably generate centrifugal forces into a single whole. It is also necessary to understand its main structural and dynamic characteristics, with the ratio of "plan" and "market "in it. Further, this will be discussed through the prism of pricing mechanisms in the part of the Chinese economy that is not export-oriented.¹⁰

In the second half of the 1990s, two prominent Chinese economists, specialists in the "two-track model" - Sheng Hong and Zhang Jun, a controversy arose, which at that time did not cause wide discussion in Chinese economics. In foreign Chinese studies, it has not received any coverage and understanding at all. Nevertheless, the main materials of this controversy were published again in the PRC in 2006. The authors obviously believed that the issues raised did not lose their relevance in the coming decade. Using the terminology I propose, the essence of this controversy can be reduced to a description and analysis of the mechanisms of the formation and functioning of the "multi-track" model.

Sheng Hong pointed out that in the classical planned economy, its main subjects - both political and administrative, and economic-are built in a "hierarchical vertical", each of the levels of which has its own "planned duties" and "planned rights". The first ones imply the obligation of higher-level links to provide lower-level ones with a certain (planned) amount of resource. The second means the rights of lower-level links to get this amount of resource. In reality, each of the levels and elements of the system has its own range of such "rights" and "responsibilities". In terms of "two-track pricing", both obligations and rights receive a value value.

¹⁰ I find the imaginative description of the general structure of the economy of modern China, given by the British expert on foreign investment in China, J. R. R. Tolkien, very correct and productive. "China entered the twenty-first century with not one, but two economies... On the one hand, there is an export economy concentrated in the southern coastal province of Guangdong and the Yangtze River Delta... On the other hand, the traditional public sector is bruised by the onslaught of private entrepreneurship, but essentially untouched, thanks to [its] rights, privileges, licenses, and the availability of credit that reliably protect it" [Studwell, 2003, p. 219]. Using the images of J. R. R. Tolkien. In my opinion, we can say that the "multi-track" model was formed in the field of the "traditional public sector" during the "clarification of relations" between it and "private entrepreneurship". At the same time, in the system-wide context, the export sector is one of the "tracks" of the "multi-track" model, since its activities are regulated by the government authorities of the People's Republic of China, and revenues are made available to public finances.

the (monetary) dimension. Since subjects seek to obtain a resource at "planned" prices, and sell it at "market" prices, this measurement is tied to the difference between the "planned" and "market" prices for the resource. Sheng Hong believed that the problem of switching to market prices could be solved without resorting to painful general "liberalization"of prices. You should simply resort to monetization of "planned duties and rights", i.e., in fact, by means of monetary redemption of each lower level of the hierarchy of its "rights" from the higher one and receiving - from the lower level - monetary compensation for the performance of its "duties", smoothly move to the complete dominance of market pricing. In particular, in this case, enterprises have the right to purchase and sell all their products at market prices, but they are obliged to return the difference between the "planned" and "market" prices for the part of the resource that they were supposed to receive from them in one form or another to higher administrative levels. This difference, Sheng Hong developed his idea, becomes a" share "of administrative bodies in their subordinate enterprises and turns these bodies from "planning managers" into "market participants". At the same time, he stressed: "the key system condition for monetization [of planned rights and obligations] is the openness of the market. The main meaning of [open market] is that all purchase and sale procedures, pricing, quantitative and qualitative indicators are open." [Junguo dae..., 2006, p. 25].

Zhang Jun's objections were that in a planned or" two-track "economy, the " rights and obligations" of both administrative and economic entities are "legally defined" (read: embedded in a "Leninist - type"political system). At the same time, both types of subjects have a certain amount of informal opportunities. The resource obtained thanks to these opportunities will never be sold on the "free market", but will be used for speculative purposes to expand their informal opportunities within this "legal certainty" [Zhang Jun, 2006, pp. 231-233]. Zhang Jun implicitly concludes that a real transition to market pricing is possible only if there are changes in this "certainty".

I think that each of the participants in this discussion was, as they say, "right in its own way." Sheng Hong's calculations shed considerable light on the internal mechanics of price fragmentation processes that began after the failure of the" counter - reforms "of 1989-1990.A system - wide transaction in the form of monetization of" planned rights and obligations " during the redistribution of powers to control pricing mechanisms (in essence, to restructure rights to withdraw rent) took place. It is not without reason that the economist himself believes that monetization was most active in 1991-1994 [Sheng Hong, 1996, pp. 74-75]. Zhang Jun, in fact, points out that this monetization could not and did not lead to the transition to "free market prices", because it did not change the nature of the "legal certainty" of relations between the elements of the "vertical". In other words, the supporting structure of the "multi-track model" is still the party state of the "Leninist type ". It is the political and administrative divisions of this state, although decentralized, that retain in their hands the mechanism of control over the "planned-market frontier" in "multi-track" pricing, i.e., ultimately determine the conditions for "entering the market" of the main economic entities. Empirical evidence suggests that the monetization of the "rights and obligations" of administrative and economic entities described by Sheng Hong was completely opaque, and there could be no question of "market openness" as a "key condition" here11. Deal

¹¹ It is characteristic that neither Sheng Hong nor any other economist dealing with this issue anywhere cites specific examples from the practice of enterprises and organizations in their works. Some information, however, can be gleaned from the Chinese business press, but I will discuss this later.

the monetization campaign was clearly speculative for all its participants. The closed nature and speculative nature of monetization in general seem to have led to the regeneration of the" legal certainty " of the party state. These circumstances also determined the main structural characteristic of the "multi-track" pricing model, which consists in an undivided, unregulated and opaque "symbiosis of the plan and the market". This feature was fully inherited by the" multi-track "model from the" two-track "model of the 80's of the XX century. Moreover, the" plan "here is organically connected with" legal certainty", i.e. with the party-state, and the" market " is a speculative practice of production - obtaining and distributing resources and rent. At the same time, the described system-wide transaction created additional incentives for a number of elements of the system, primarily for business entities-enterprises, to break through beyond "legal certainty" to "the market as a system". Such a desire was especially strong among enterprises of non-state ownership. From my point of view, it is the dynamic correlation between the scale of regeneration of the party state and the desire of a number of subjects of the system to go beyond the "multi-track agreements", i.e. beyond the framework of this state, at all system levels that is the basic dynamic characteristic of the "multi-track" model. Changing the dynamics of this ratio is crucial for determining the future of "multi-track" pricing.

THE "MULTI-TRACK" MODEL IN ACTION, OR EXAMPLES FROM THE PRACTICE OF THE CHINESE "ECONOMIC MIRACLE" ¹²

A vivid and informative illustration of how "multi-track" pricing works in practice is the annual "spring exacerbation" of the price confrontation between coal miners and electric power companies in China. Coal prices are officially "released", i.e. they can theoretically be determined by the producers themselves. Electricity prices are still subject to directives from Beijing. Both coal and electric power holdings are majority owned by the state, but in the first case - in the person of local (provincial) governments, and in the second case - in the person of companies formed under the State Council of the People's Republic of China. The "aggravation" usually begins with the fact that somewhere in January-March prices for coal for power plants rise significantly. In February 2009, the one-time increase, for example, exceeded 40% (amounting to 385 yuan per ton). The increase is initiated by the governments of the coal-mining provinces of Shaanxi, Shanxi, Hebei and Shandong. The initiative takes the form of an" urgent notice of coal price adjustment " issued by the departments of Industry and Information of provincial governments. At the same time, governments appeal directly to the management of mines and power plants to "agree on a new long-term price for coal as soon as possible", emphasizing that "until the producers themselves agree, the new price specified in the government notification will apply."

Manufacturers, meanwhile, are in no hurry to reach a long-term price agreement, because in the context of the general situation, it makes little sense. Both the "provincial" miners and the" Beijing " power engineers are well aware that in order to get things moving, it is not they who should negotiate with each other, but the central and local governments that keep producers on different leashes of the same party-state vertical. Holding companies do not have shareholder councils,

¹² This section of the article is based on publications in the Chinese business weekly Zhong Guo Jingying Bao (Business China) and Jingji Guancha bao (Economic Review), as well as materials from the journal Jiage Lilun yu Shijian (Theory and Practice of Pricing) for 2005-2006 and 2008-2010.

only the boards of directors, whose chairmen are simultaneously secretaries of the CPC party organizations in these holdings and high-ranking employees of the local government offices (in the case of coal miners) or the State Council of the People's Republic of China (in the case of electric power companies). The provinces and Beijing each play their own game. Local governments insist on a new increased price for coal, and central electric holdings form a "union of coal buyers", prohibit their power plants from buying coal at new prices and appeal to the state-patriotic consciousness of provincial governments. The key problem, however, is that both coal miners and electric utilities are "in debt like silk." Another price increase only adds to the losses and debt that were formed at the previous price level.

By mid-summer 2009, the total debt owed by power plants to coal miners in Shaanxi Province, for example, exceeded $ 1 billion. RMB. The losses of coal miners are estimated at hundreds of millions of yuan, which leads to the accumulation of an impressive debt on taxes and other payments to the local government. The provincial government is the main founder, investor and in many cases the last lender of most large and medium-sized enterprises of local subordination. Money in the provincial government's budget is the main catalyst for economic growth. In China as a whole, domestic demand accounts for less than a third of the growth rate, while the rest is government investment and exports..., 2009, p. 58] In 2008, the GDP of Shaanxi Province grew by 15%. The volume of coal production exceeded the 2007 figures by 30%. Target figures agreed with Beijing for 2009-2010 (considering the global crisis) - 13%. However, in order to meet these targets, the volume of coal production in 2009 had to be increased by at least the same 30%. Ensuring high growth rates, especially in the context of a global downturn, is a key socio - political task, for which the local party and state leadership bears administrative, disciplinary and other responsibility to Beijing. At the same time, it is investment and growth rates in the PRC (primarily in the areas of capital construction, real estate, and exports) that create the main sources of bureaucratic rent.

Under these circumstances, the governments of the coal-mining provinces made calculations and came to the conclusion that if the "new" coal price is lower than 385 yuan per ton, then with the existing debt volumes and the level of financial discipline, coal companies simply will not be able to pay the required taxes and payments to local budgets. Consequently, the implementation of plans for growth rates (agreed with Beijing) and plans for investment and the formation of a "rental base "(purely local, agreed within the provincial political, administrative and economic elites) under a big question. It is characteristic that the State Council of the People's Republic of China eventually, in fact, sided with the provincial governments, obliging "their" power plants to buy coal from local miners at new increased prices. Growth rates are above all else! One can only guess what happens to the volume of total debts and, de facto, the consolidated budget deficit (both in the center and in the regions). This systematic example clearly shows that the pricing mechanism is in the hands of party and state bodies at various levels. However, it is subject to both market factors (monetization of the economy, assessment of tax revenues and potential investments, debt and the level of financial discipline, etc.) and non-market circumstances (party-state responsibility for ensuring economic growth). In the case of heavy industry and extractive industries, non-market circumstances ultimately still prevail in the pricing mechanism.

Another relatively "more market-oriented" example is from the fuel production and trade sector in the capital of the southern Guangdong province, Guanzhou. Managing the price tag-

city government officials calculate the" average price " for fuel oil based on the contract price for its import and the price in the domestic market, which is determined by the provincial government. If within 10 days this "average price" changes in one direction or another by more than 10%, then local fuel producers have the right to submit an application to the pricing department of the city government with a proposal to review the prices of their products.

All sorts of coefficients and " arithmetic averages "are widely used in" multi-track " pricing, in particular when resolving price contradictions between coal miners and thermal power companies. In a number of provinces in the north of the country, if fluctuations in the difference between the price of coal (supply price) and the price of heat (according to the last correction) exceed 6%, then heat producers have the right to apply to the relevant authorities of local governments with proposals for correcting the price level.

Everywhere, however, the calculation of coefficients remains the prerogative of government services, and manufacturers send their proposals for "price correction"to the government services.

conclusion. PORTRAIT OF A "MULTI-TRACK" MODEL

The price reform in China is a key subject for understanding the logic, sequence and dynamics of the "Chinese way" of transformation of the Maoist model of state socialism. The decentralized hierarchy of party-state power that existed in the pre-reform period in the PRC to extract and accumulate resources, the social and demographic situation in the country, the economic structure, historically established practices to combat shortages in the domestic market, the ideological and political mythology of the CPC government, together with the values of traditional political culture, determined the priority and "two-track" nature of pricing reform. "Two-track" here should be understood in two ways. On the one hand, it is a multidimensional and opaque combination of" sector "and" proportional "options for the ratio of" planned "and" unscheduled " prices. On the other hand, this is a very tough, both open and "behind-the-scenes" struggle between central and regional party-state bodies for preferential rights to regulate the "planned-market frontier" in pricing. Economic entities, regardless of the form of ownership, also actively lobbied for their " place in the sun "in this" planned-market " price dichotomy. By the early 1990s, the "battlefield" remained largely in the hands of regional party-state bodies and related economic lobbies. The central government, which consciously pursued a policy of "delegating power downwards" during the reforms and was weakened by the socio-political and macroeconomic crisis of 1989, failed in its counter-reformist attempt to restore centralized pricing in a number of industries. The processes of regionalization and fragmentation of pricing mechanisms have accelerated dramatically. At the same time, the center retained political and administrative control over property and pricing in the areas of natural monopolies and key infrastructure projects. The formation of what I propose to call a "multi-track" model has begun.

Fragmentation and regionalization of pricing mechanisms did not lead to fundamental price liberalization. The claims of some Chinese economists that "most prices have already been released" or that "the main role in pricing is now played by producers themselves" are not fully supported by empirical evidence. Using Sheng Hong's categories, "monetization of planned rights and planned responsibilities" both in the center and in the field took place according to absolutely opaque criteria.

schemes. In fact, a multi-level and multi-channel system-wide transaction took place with the participation of the central government, regional authorities and related business entities of all forms of ownership to buy out "planned rights" and sell "planned responsibilities". The price of this transaction was based on the difference between "planned" and "unscheduled" prices that actually existed in the country's economy. However, this difference fluctuated very much by industry and region and inevitably became a subject of bargaining between participants in the "exchange of rights and obligations". In other words, the regional authorities, behind closed doors and in a tough, sometimes ultimatum struggle, agreed with the central authorities to "buy out" the expanded scope of powers in the areas of property management and pricing. The center thus "sold" its "responsibilities", and the seats "bought" their new extended "rights". The amount of the buyout was invariably the subject of bargaining, was tied to the difference between "planned" and "unscheduled" prices, and took into account the real and potential amounts of bureaucratic rent for each of the parties participating in the contract in the future, the term of which, apparently, was also negotiated during the auction. In addition, the volume of repurchases necessarily took into account the task of maintaining the pace of economic growth as the main factor creating the "rent and resource base".

That is why China does not really "saw" investment budgets. Both central and local budgets are consolidated under defined and agreed growth benchmarks. "Sawing" such a budget means objectively reducing our own "rental and resource base". It is much more productive and safer to rigidly agree in advance on the volume of the "buyout" and its terms, and then "remove the foam" from the purchased powers, manipulating, say, pricing coefficients and exchange rates of controlled shares, selling real estate and stimulating the flow of "hot money"by exporting. Meanwhile, "Buyout" is being privatized by higher levels of party and state power. It is fundamentally important that the" ransom " was by no means a one-time act. These are, in fact, the terms of the term lease of the authority to create a "rental resource base" and withdraw rent. At the end of the agreed period, the higher-level party and state apparatus can "return", and the bargaining about the amount and terms of the" buyout " will resume under new conditions. Moreover, there are good reasons to believe that higher authorities seek to control, as far as possible, the amount of rent withdrawn at lower levels. Periodically pop-up high-profile anti-corruption cases are an example of this. Thus, the "upper classes" are trying to ensure the integrity of the decentralized vertical, guarantee the expansion of the" rent and resource base", and settle scores with their opponents.

Specific forms of payment of "ransom" are very different. Depending on the situation, we can talk about taxes, all kinds of "white", "gray" and "black" payments, about the agreed price level for a particular type of raw materials or finished products, about pricing mechanisms (coefficients), etc.

The" exchange of rights and obligations "between party-state bodies (governments) at all levels and economic entities (enterprises) located in their area of territorial and industrial responsibility was typologically similar to the" exchange " between political and administrative levels described above. In fact, it was a "buyout" by enterprises of the best possible conditions for entering the market in the sense of favorable pricing, "soft" credit conditions, the possibility of obtaining all sorts of subsidies, increasing administrative status, etc. The main motivation for the actions of enterprises (as well as most other participants in "contractual exchange" transactions) was the desire to maximize not profit, but income. This is one of the key points for understanding the overall political economy of the "multi-track" model. The basis of the transaction price at this level was again the difference between "planned" and "unplanned" prices, as well as the volume of real and potential rent (income) of bidders, taking into account the need to pay for the transaction.-

It is necessary to ensure certain parameters of economic growth. In one way or another, the described multi - level, multi-channel and non-transparent system-wide transaction, in my opinion, laid the structural foundations of the "multi-track" model and by the mid-second half of the 90s of the XX century.led to its relative consolidation.

The formation of the foundations of the "multi-track" model took place during the collapse of "two-track" pricing in the form in which it existed in the PRC in the 1980s. Therefore, initially a clearly expressed "multi-track" was manifested precisely in the field of pricing. However, then, throughout the 1990s, the principle of " multi-track "(i.e., multi-level and non-transparent" rent-resource " transactions) became decisive for many other areas of reform in the PRC. Mechanisms of corporatization of property, fragmented (and in fact - "multi-track") the structure of the Chinese stock market, the forms and nature of control over the turnover of shares, the practice of transferring shares of one type to another, including manipulations with controlling stakes of state-owned enterprises, transformations in the credit and banking sector-all this at the beginning of the XXI century began to function according to the logic and "laws" of the "multi-track" model.

The basic supporting structure of this model is still the ideological and political monopoly on the power of the Chinese Communist Party, organizationally and practically merged with its hitherto mostly direct monopoly control over the national financial and credit system and structurally forming financial flows. The party-state regulates the flow of capital in the national economy, the nature and price of property transactions. It still controls natural monopolies, key industries and infrastructure, acting as their "last creditor". Party and state bodies at all levels determine the forms and conditions for entering the market of key economic entities-enterprises, including both prices and pricing mechanisms in the area of territorial production responsibility under their control. The extreme diversity of the nature and conditions of intra-system contractual relations in the party-state bureaucracy and between it as a whole and economic entities of all forms of ownership on the issues of privatization of rent, income and profits, in my opinion, just makes it possible to call such a model "multi-track ".

The most important structural feature of the "multi-track" model is the opaque and undivided in practice "symbiosis of the plan and the market". Attempts by some economists in the PRC to rigidly contrast them within this model seem to be nothing more than speculative calculations. However, this model itself can and should be contrasted with a market (capitalist) economy in both the" liberal "and" Keynesian " sense. Those Chinese economists who pointed out in the mid - to second half of the 1880s that in such a model there is an unregulated intervention of the plan in the market, and the market modifies the plan, were profoundly right. At the same time, in a conditionally "market field", "it is impossible to spontaneously form a system of support for a market economy, and even more so... formation of the corresponding organizational structures" [Diao Xinshen, 1989, p. 14]. Of course, such a "symbiosis of plan and market" is by definition a more flexible structure than directive planning "in its pure form". Nevertheless, the described model of contractual relations under strict control and with the mediation of the political and financial monopoly of the party state of the "Leninist type "in each specific case sets the participants in this transaction quite clear limits to the"formation of market structures". The market here is not a "system", but a "practice", applied unevenly and without externally understandable regulations at different levels of a highly decentralized state of the "Leninist type", which is still just a"system". Will the participants in the transaction strive for these limits

to circumvent and, if so, how-this is a separate big question about the possibility of non-normative behavior of elements of the "multi-track" model and the potential consequences of such behavior for the system as a whole.

Here we come directly to the last in my list of basic characteristics of the "multi - track" model-to the most important features of its internal dynamics. There are, in my opinion, two of them. The first is the constant striving and ability of the "system" in the face of the political and financial monopoly of the party state to regenerate and to expand reproduction. The ideas of supporters of the "two-track transition" about the gradual but steady reduction of the "old track" do not stand up to criticism, because they do not agree with reality. The second dynamic feature of the" multi-track " model is that various participants in contractual relations, mainly from among economic entities of different forms of ownership^{, 13} constantly seek to circumvent the restrictions imposed by the party-state on the "formation of market structures". Thus, they tend to leave the existing system field of contractual relations (go beyond the "multi-track" model) and break through to the "market as a system". In this case, the "system" represented by the party-state has three options: to put an end to the" renegades", to conclude a new rental agreement with them and thus return them to the bosom of the" multi-track "model, or, finally, to let them go"on free bread". Empirical evidence shows that, as a rule, they "end up" with small and medium-sized forms of non-state property, with representatives of the party and state bureaucracy who "violated the convention", and with outright political freethinkers. Vacation "on free bread" occurs mainly according to the concepts of the shadow or, in extreme cases, "gray" economy. In most cases, however, Sistema will, in principle, seek to renegotiate an opaque rental agreement. An intermediate option is also practiced: renegotiate the agreement in such a way that at the same time partially release it. Here everything depends on the potential of the renegade's formal and informal capabilities and his "subjective will to liberate".

In general, the dynamic correlation between the scale of regeneration of the party-state "system ", the desire of a number of participants in contractual relations to go beyond them to a full-fledged market, and the choice of the "system" option of how to deal with the "renegades" determines the dynamics of the existence and development of the "multi-track" model. We can say that the reproduction of the "multi-track" model is, in essence, the reproduction of a system-wide, multi-channel and non-transparent transaction for the "exchange of rights and obligations" in the process of creating and using the "rental resource base ". This reproduction, in turn, depends on the success of the economic growth model being implemented, i.e., to a large extent on the extent to which this growth - at a given level of aggregate costs - provides an expanded reproduction of the "rent and resource base" for both the "system" and other participants in "multi-track" contractual relations. The point, however, is that the focus on economic growth is not accompanied by adequate attention to calculating its financial and other costs. However, in the conditions of the predominant desire to maximize income (rent), and not profit, it can not be otherwise. Thus, the internal financial, economic, and socio-political problems of the"multi-track" model are typologically quite similar to those in classical systems of the "Lenin type" ¹⁴. The elements that undoubtedly exist in modern China are:

¹³ The most radical and consistent in this respect, for natural reasons, are enterprises of non-State forms of ownership.

¹⁴ These problems related to "soft budget constraints" in the economic and political-administrative spheres are described in detail in the works of the "Hungarian school of political economy of state socialism", in particular in the classical monographs of J. Kornai [Kornai, 1990; Kornai, 1992] and relatively recent works of M. Csanadi [Csanadi, 1998, Csanadi, 2006].

The "East Asian" model of the export economy, which is significantly integrated into global economic processes, cannot cancel this fact. Moreover, in a system-wide context, these "East Asian export" elements represent nothing more than one of the" tracks "(probably even a whole set of" tracks"!) of the" multi-track " model. Their activities are regulated by rent arrangements sanctioned by the "system", and export revenues are placed at the disposal of public finances and often go to the regeneration and expanded reproduction of the"system".

"Market transformation "in modern China does not mean a transition from a" plan "to a" market", but a transition from a" multi-track "model to a"market as a system". This transformation is unlikely to be linear and crisis-free, because it involves not just socio-economic restructuring, but a change in the format of modern Chinese statehood.

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