Question

What was the purpose of introducing dual pricing in China's economic reforms?

Options

• To reduce foreign direct investment

• To allow part of output at government-fixed prices and remaining at market prices

• To increase taxes on private enterprises

• To eliminate all government price controls immediately

Answer 1

China introduced dual pricing, where part of output was sold at government-fixed prices and the remaining at market prices. This gradual approach allowed the economy to transition towards market mechanisms while maintaining some government control, eventually increasing the share of market transactions.