Mandatory and guidance planning
지령성 계획과 지도성 계획
The two concrete forms of planned economy distinguished by the CPC's 1984 Decision on the Reform of the Economic Structure. Mandatory planning had to be carried out and applied to important products vital to the national economy and people's livelihood that the state allocated, and to major economic activities affecting the whole. Guidance planning was realised mainly through economic levers such as prices, taxes and credit. Saying that planned economy did not mean the predominance of mandatory planning, the Decision set out to narrow mandatory planning step by step, widen guidance planning and leave the rest wholly to market regulation.
In depth
The Decision's provisions
As the third and fourth of the basic points of the planning system, section 4 of the Decision stated that practising planned economy did not mean the predominance of mandatory planning, mandatory and guidance planning both being concrete forms of planned economy. Guidance planning was realised mainly through economic levers; mandatory planning had to be carried out but also had to use the law of value. The scope of mandatory planning was therefore to be narrowed appropriately step by step and that of guidance planning widened. Mandatory planning applied to important products vital to the national economy and people's livelihood that the state had to allocate, and to major economic activities affecting the whole; for the great mass of other products and activities, guidance planning or full market regulation applied according to circumstances. The focus of planning was to shift to medium- and long-term plans, with simpler annual plans.
Significance
Commodity exchange and the price mechanism moved into the space mandatory planning gave up. The Decision widened the market but drew the line that labour power, land and state enterprises and resources were not commodities, a division that changed again with the move to the "socialist market economy" in 1992.