This article maintains that the transformation process in the People's Republic of China is at the crossroads. Now that the foundations for a free enterprise system have been laid, the task for the coming years is to eliminate the regulatory fragmentation of the national economy in regions in which experiments with specific regulatory models have been conducted. Of all the various free enterprise systems, the model of a social market economy as originally conceived by L. Erhard and A.

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... ack could be taken as a guideline. First reports of mass worker unrest in China show all too clearly that economic and social reforms in China can only be successfully continued if the resulting social hardships can be cushioned by social policies. In order to implement the symbiosis in a social market economy between rapid economic growth and social equilibrium, far-reaching measures towards a workable system of competition law and a social insurance system based on the subsidiarity principle must be undertaken.