On March 18, 2010 (February 3, 2010 in the lunar calendar), North Korean Finance Minister Park Nam Ki was executed for failure in currency reform. According to a report by Yonhap News Agency on March 18, 2010, Park Nam Ki, former Minister of Planning and Finance of the Workers 'Party of Korea, was executed in Pyongyang last week for failing currency reform. The report also quoted sources as saying that the North Korean authorities charged Park Nam Ki with "sneaking into the revolutionary ranks as the son of a big landlord and deliberately killing the country's economy." So far, the currency reforms implemented by North Korea since November 2009 have failed completely. China and North Korea are only separated by water, and the two countries have deep ties. The most significant difference between China and North Korea's economies is that China's market-oriented reforms have been successful, but North Korea is still a planned economy country with the government dominating everything. Whenever China's reforms are in danger of hitting rocks, those who reminisce about the planned economy era often cite North Korea as a guideline. However, what are the motivations for North Korea's currency reform? Why did it fail? What warnings does this brief reform bring to us? First of all, the motives for North Korea's currency reform are clear to anyone. We can use North Korea as a blueprint to review history and understand whether the government-led planned economy is a dead economic system: North Korea is still economically backward, has food shortages, and has closed its doors to prevent its citizens from knowing about changes in the world beyond its borders. North Korea's socialist system moved from a certain degree of flexibility to dogmatism. When the will of the country was forcibly injected into almost all fields, socialism fulfilled Hayek's prediction and embarked on the road of slavery. Economic backwardness forced North Korea to implement limited reforms in 2002. As a result, it caused a polarization between rich and poor and ensuing corruption. However, North Korea's central institutions, which emphasized class struggle, were helpless against inflation. In response to these sudden problems, North Korea is still trying to resolve them in accordance with planned economic countermeasures, such as limiting the goods sold on the market to agricultural products, meat and clothing produced by individuals, while other industrial products and imported goods must be sold in state-owned stores; stipulating that only women over the age of 50 can set up stalls in the market, while young and middle-aged people must engage in the "150-day production battle" and so on. But they have had little effect. In the end, they had to take measures from the bottom of the bridge and use the worst policy of currency reform: from November 30 to December 6, 2009, the government restricted North Korean people to go to banks to exchange old Korean currency for new Korean currency at a ratio of 100:1, with a maximum of 100,000 old Korean currency for each family. This is the fifth currency change in North Korea since the founding of the People's Republic of China. The purpose of this reform is to eliminate the gap between rich and poor and bury the problems exposed after the loosening of the economic system under the iceberg. Second, the failure of North Korea's currency reform was an expected outcome. At first, the economic purpose of North Korea's currency reform could be said to kill two birds with one stone: first, to withdraw money, reduce liquidity, and curb inflation; second, to impose a maximum limit to suddenly evaporate the wealth increased through the market, and to use reforms to deprive private monetary property that exceeded the average level to slow down the trend of polarization. However, under the premise that the central bank cannot be independent of finance and cannot effectively control the amount of money in circulation, the direct consequence of North Korea's currency reform is to destroy the credit of the country's currency. More importantly, the currency reform did not really touch the interests of the powerful and powerful who held large amounts of assets and foreign currencies. Instead, it caused disaster to the hard-working and rich North Korean civilians. The exchange limit of 100,000 old North Korean coins turned personal wealth accumulated under the loosening of the economic system into waste paper overnight. Therefore, we can fully expect that what will happen immediately after the currency reform will inevitably be a market reaction. Prices surge and market freezing will follow. North Korea has to ban the country's major markets in response to the crisis, and the country will fall into chaos. In December 2009, the cold wave hit North Korea one after another. The market mechanism failed, coal supply was interrupted, and the central agencies had no choice but to use Park Nam Ki, who presided over currency reform, as a scapegoat. Finally, what warning can North Korea's failed currency reform give to China? We have seen that one of the motivations for North Korea's reform is to eliminate the gap between rich and poor, and the polarization in the field of income distribution in China over the past 30 years of reform and opening up is also obvious to all. Li Shiqi, director of the Center for Income Distribution and Poverty Research at Beijing Normal University, conducted four nationwide household income surveys in 1988, 1995, 2002 and 2007. The results found that from 1988 to 2007, The income gap between the top 10% and the bottom 10% has increased from 7.3 times to 23 times. The problem of corruption, which is coexisting with the gap between rich and poor, has temporarily become the focus of social conflicts. How to divide the big cake of social wealth is already related to the government's conscience. The unfairness of social distribution and the unfairness of systems such as the household registration system, urban-rural dual system, and industry monopoly have combined, making the call for achieving social fairness and justice louder and louder. China has been on the road of marketization for nearly 30 years. At first, it crossed the river on stones. Now it has regained its confidence as a big country, striding high, and imposing. But why are there still people who continue to question the direction of reform and even miss the era of planned economy? Deng Xiaoping said that "poverty is not socialism", but why does the gap between rich and poor under the conditions of a socialist market economy ultimately tarnish the superiority of socialism? The author believes that all problems can be attributed to the incomplete market-oriented reform. The private economic model that started with the trial of township enterprises has gone into decline, and the commanding heights of most industries have returned to the hands of state-owned enterprises. The reform of state-owned enterprises has stopped in 2004, and since then, a large-scale "national advancement and private retreat" trend has been set off every year. To this day, it has formed a national capitalist model similar to North Korea's highly centralized planned economic system. For this reason, we inevitably have questions: Will currency reform be the only way left in China in the future?