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In the early stages of the shift from the planned economy to the market economy, China primarily relied on administrative management to realize macro control. This was followed by the gradual introduction of market-oriented practices on the basis of overall planning. Now, China has established an indirect regulatory system in which macro control is achieved through the application of modern monetary policy tools. At each of these different stages, the evolution of monetary policy and the development of the market economy have not only been dependent on one another, but have also spurred each other forward.
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