An undeniable fact is that China practices macro-control more frequently than countries with a developed market economy. Since the country began to adopt the policy of reform and opening up in 1978, the Central Government has launched five adjustments to cool down the economy. Professor Li Yiping at the School of Economics, the Renmin University of China, attributes the frequent control practices to the immature economic system.

Frequent macro-controls are a reflection of an immature economy. A developed market economy is able to exercise self-regulation that shows the following characteristics: If the market is profitable, major players will enter the market and they will retreat when it's no longer profitable; all the players have a strong impulse for industrial upgrading, as only early industrial upgrading can bring them big profits; businesses have a strong sense of social responsibility, seeking the harmonious coexistence between businesses, society and environment; the government acts to produce products that have a positive impact on the public and contribute toward a harmonious environment.

However, the fact that the transition from a planned economy to a market-oriented one cannot be completed overnight has led to China's current immature economy. The immaturity is reflected in the lack of property rights constraints on state-owned enterprises and frequent interferences by local governments in corporate operations. As a matter of fact, local governments and some state-owned enterprises not only seek blind expansion, but are incapable of responding quickly to various macro-control signals. As long as there is no mature market economy, such impulses resulting from the loose restraints of property rights will remain. This is the reason for repeated overheatings, despite the country' best efforts to regulate it.

As a result, the Central Government has no other choice but to practice frequent macro-controls. In the immediate future, China's economy can only develop along a "tight-rope walking" way, meaning cooling the economy when it is overheated and boosting it when it's too cool, so that the economy will eventually stabilize, in conjunction with the maturation of the economic system.

Methods of macro-control also depend. For example, under the planned economy, administrative means play a major role, while under the market economy, economic means are more effective. At the current stage, the Chinese Government mainly employs economic and legal means in macro-control, but it still cannot exclude administrative means, because of the economy's transition. Some market players, such as state-owned enterprises and local governments, are still unable to react quickly to economic signals. Due to property rights anomalies, they are still unqualified to take responsibility for the negative results of excess investment. Thus, there must be supporting administrative means. As for such problems as environmental pollution, resource wastage and rocketing housing prices, an accountability system is necessary. Anyone who speaks highly of economic means and opposes administrative means has little understanding of China's national conditions.

Though administrative means are necessary at a certain level, it must be stressed that the final goal of the ongoing reform is for this to gradually fade out, to facilitate the establishment of a mature market economy that is capable of self-regulation. Control is important but reform more important.