Current Political Economy Regime in Chinas Mainland

1
Current Political Economy Regime in Chinas
Mainland

• Combination of liberalization and authoritarianism

2
Political economy regime

• Combination of economic liberalization and
  political authoritarianism
• regime of political economy
• public policy profile
• market-oriented reforms and political grip
• political and economic institutions
• strong reformist state retreats from economy
• socioeconomic coalition base
• co-optation of newly-emerged social sectors

3
Reforms opening up

• Deng Xiaopings reforms since 1978
• economic liberalization
• break the monopoly of state sector
• socialist market economy
• political authoritarianism
• the four basic principles
• last one is the key leadership of the CCP
• allow no organized opposition to the party

4
Dengs handpicked successors

• First two
• were selected as economic reformers
• were purged for political liberalization
• Hu Yaobang
• CCP General Secretary from 1978-87
• Zhao Ziyang
• CCP General Secretary from 1987-89

5
Dengs handpicked successors

• Last two
• were selected as technocrats
• politically reliable
• economic reformers
• Jiang Zemin
• CCP General Secretary from 1989
• Hu Jintao
• CCP General Secretary since 2002

6
From Jiang Zemin to Hu Jintao

• CCP General Secretary (2002)
• 16th National Party Congress
• Hu Jintao replaced Jiang Zemin
• PRC State President (2003)
• 10th National Peoples Congress
• Hu Jintao replace Jiang Zemin
• the first peaceful and orderly leadership
  succession in PRC history

7
Crack down political dissidents

• CCP has allowed no organized opposition to the
  Party leadership
• Three waves of pro-democracy movements
• late 1970s democracy wall movement
• late 1980s Tiananmen Square protests
• late 1990s China Democracy Party
• each followed immediately by suppression

8
Broader programs of reform

• Separate Party from government
• halted after 1989 Tiananmen
• Separate state from economy
• market mechanism and de facto privatization
• Separate government from enterprises
• reinforced after 2001 WTO
• introduce competition and deregulate industries
• increase role for law
• limit corruption

9
Price adjusted by market

• Economic liberalization accelerated since 1990s
• in 2001, prices of another 107 kinds of
  commodities and service were deregulated

10
State management of economy

• break down bureaucratic interests that have
  fostered economic paternalism
• 1998 industrial ministries were reorganized as
  bureaus
• 2000 industrial bureaus were eliminated
• 2003 State Development Planning Commission was
  reorganized as the State Development and Reforms
  Commission

11
State management of economy

• Further restructuring of state institutions
• 2003 State Economic and Trade Commission was
  eliminated
• 2003 the Ministry of Foreign Trade and Economic
  Cooperation and the Ministry of Internal Trade
  were merged into the new Ministry of Commerce
• foster professionalism within government

12
Competition and deregulation

• Introduction of competition into formerly
  monopolized industries
• telecommunications industry
• electric power industry
• railway industry
• airline industry
• break down bureaucratic interests that have
  fostered economic paternalism

13
State retreats from economy

• State sector continues to shrink
• downsized, privatized, or go bankrupt
• non-state sector continues to grow

14
Potential challenges

• Potential challenges to the current regime of
  political economy
• globalization
• demographic changes
• political instability

15
China Joined WTO in 2001

• Culmination of 15 years of the PRC governments
  efforts

16
Impact of WTO

• Expansion of trade foreign investment
• trade volume 0.6 trillion for 2002
• 22 increase from 2001
• direct investment US55 billion for 2002
• 13 increase from 2001
• Economists estimate WTO membership will add 1.5
  to Chinas annual growth rate after 5 years

17
Impact on WTO

• weed out inefficient SOEs
• erode local protectionism
• curtail industrial monopolies
• urban-rural divide
• regional differences
• unemployment
• social unrest

18
International Covenants

• In October 1997, PRC government signed the
  International Covenant on Economic Social and
  Cultural Rights
• In October 1998, PRC government signed the
  International Covenant on Civil and Political
  Rights