1. The state is to guide the country's economic development by making broad decisions on economic priorities and policies, and
2. that the State Council, which exercises executive control, was to direct its subordinate bodies in preparing and implementing the national economic plan and the state budget.
Each significant economic sector is supervised by one or more of these organizations, which includes the People's Bank of China, National Development and Reform Commission, Ministry of Finance, and the ministries of agriculture; coal industry; commerce; communications; education; light industry; metallurgical industry; petroleum industry; railways; textile industry; and water resources and electric power.
Several aspects of the economy are administered by specialized departments under the State Council, including the National Bureau of Statistics, Civil Aviation Administration of China, and the tourism bureau.
Each of the economic organizations under the State Council directs the units under its jurisdiction through subordinate offices at the provincial and local levels.
Economic policies and decisions adopted by the National People's Congress and the State Council are to be passed on to the economic organizations under the State Council, which incorporates them into the plans for the various sectors of the economy.
Economic plans and policies are implemented by a variety of
1. direct control mechanism and
Direct control is exercised by designating specific physical output quotas and supply allocations for some goods and services.
2. indirect control mechanisms
Indirect instruments—also called "economic levers"—operate by affecting market incentives.
These included levying taxes, setting prices for products and supplies, allocating investment funds, monitoring and controlling financial transactions by the banking system, and controlling the allocation of key resources, such as skilled labor, electric power, transportation, steel, and chemicals (including fertilizers).