Constructing the foundations of microeconomic analysis of Chinese economics: based on the theory of classified reform of state-owned enterprise

Abstract

PurposeSince the core issue of Chinese economics is to elucidate the logical relationship between socialism and the market economy, it necessitates a robust foundation for microeconomic analysis to uncover the behavioral patterns and characteristics of microeconomic agents in a socialist market economy and identify the conditions and methods for the functioning of market mechanisms.Design/methodology/approachThe core issue of microeconomics with Chinese characteristics is to identify the economic logic of how market mechanisms play a decisive role in resource allocation under the basic socialist economic system based on China's reform.FindingsThe core issue in building the foundation of microeconomic analysis of Chinese economics is addressing the compatibility issue between SOEs and a market economy.Originality/valueIn the author’s view, this can be achieved under the logic of classified reform so as to build the microeconomic foundation for the effective functioning of a socialist market economy.