reforms, China's GDP rose from some US$150 billion in 1978 to more than $1.6 trillion in 2004, with an annual increase of 9.4 percent. Analysis Some scholars have described China's economic system as a form of state capitalism, particularly after the industrial reforms of the 1980s and 1990s, noting that while the Chinese economy maintains a large state sector, the state-owned enterprises operate like private-sector firms and retain all profits without remitting them to the government to benefit the entire population. This model brings into question the rationale for widespread public ownership as well as the applicability of the descriptor "socialist", and has led to concern and debate regarding the distribution of state profits. Others have labeled it "party-state capitalism." Starting in 2017 as part of its state-owned enterprise reform program, the central government began to encourage state-owned enterprises to start paying dividends to the government. Other reforms have transferred state-owned assets to social-security funds to help finance pensions, and the Shenzhen municipal government has proposed using their state-owned enterprises to finance a social dividend-type of system for its residents. Chinese economist Cui Zhiyuan argues that James Meade's model of liberal socialism is similar to China's socialist market economy and can be used to make sense of the model. Meade's model of market socialism involved public ownership of firms with independent management - with the state acting as a residual claimant to the profits generated by its enterprises, but without exercising control rights over the management and operations of its firms. This model has the advantage that the state would have a source of income independent of taxation and debt, enabling a reduction of the tax burden on individual incomes and the private sector while promoting greater equality. Cui points to the Chongqing experience with municipal state-owned enterprises enabling high social expenditure alongside low taxes and extremely high rates of growth as validation of the socialist market economy model. The Chongqing model used state enterprise profits to fund public services (including housing), providing the main source of public finance and enabling Chongqing to lower its corporate tax rate (15% compared to the 33% national corporate tax rate) to attract foreign investment. Julan Du and Chenggang Xu analyzed the Chinese model in a 2005 paper to assess whether it represents a type of market socialism or capitalism. They concluded that China's contemporary economic system represents a form of capitalism rather than