China

1
China

• Socialist Market Economy

2
Comparison

• Japan
• USSR
• Mao egalitarianism , self-sufficiency, cultural
  specificity
• Centrally planned communes replaced by TVE
  export oriented - 1990s SEZ socialist market
  economy
• New Traditionalist economy resurgence of
  Confucianism late 1970s
• Problems in Chinese development

3
Historical and cultural determination

• 3 Religions
• Social structure and land tenure
• Dynastic cycle sequence of dynasties , cyclical
  course of history
• 1911 End Qing dynasty Kuomintang 1921
  Communist Party
• European conquest technological backwardness
  Asian mode of production

4
Maoist Economic Policies

• Post WW1 transfer of territory to Japan
• Confucian land redistribution full collectivism
• Distinguish from Stalinism
• Social control established 1949 1957 gradual
  slow movement.
• GLF 1958 - 1961

5

• Adjustment 1962 1965
• GPCR 1966 1978
• Deng Xiaoping modernisation reforms
• Destructive impact of cultural revolution
• 1978 return to regional planning
• Third Front policies

6
Deng Era, post-1979

• Oscillation of reforms Timing of reforms
• 1979 gradualist reforms pragmatic policies
• 1981 attack intellectual liberation 1984
  enterprise reform
• 1988 Hu Yaubang ant-bourgeois reforms 1987 Zhao
  return to central planning
• 1989 Tiananmen Square
• 1994 farmer demonstrations 1997 15th CCP congress
• 2000 - WTO 2002 17th CCP congress Hu Jintao

7
Agricultural Reforms

• Deng Xiaoping - pragmatic approach
• Responsibility system
• Dramatic output improvement
• Incentives
• Plateau in performance improvements 1994
  protests Why?

8
SOE Reforms

• Pilot projects in Sichuan province
• Peoples Congress September 1980
• Elements of industrial reform
• Autonomy
• Responsibility contracts
• Markets
• Administrative streamlining
• Collective ownership enterprises

9

• 1981 Commission for Reconstruction of the
  Economy
• Price reform - dual price system replaced
• TVEs political interference, bankruptcy reform
  1993 alternative to privatisation
• Difference between agriculture and enterprise
  reform
• - privatisation not acceptable
• - sanctity of state control to bureaucrats
• - external factors
• - complex administration

10
SEZ

• Imperial practice
• Export performance 1978 7 of GDP
• JV legislation 1979 4 east coast cities
• Open Door Policy 1984
• Shenzen province
• FDI by whom?

11
Income Distribution

• Standard of Living improved gap
• Gini compared
• Maoist polices exacerbate inequality
• Overall SoL improved
• Explanation decline state sector
• - inflation
• -foreign trade
• -regressive rural social transfers
• - rent-seeking
• -urban subsidies reduced

12
Banking Reforms

• Market economy need modern banking sector
• Peoples Bank monobank 1983 Central Bank
• Specialised banks autonomy in credit
• PB more autonomy Nov 1993
• Commercial / specialised banks July 1995
• Difficult to change culture of banking

13
Energy and Environmental crisis

• Deforestisation
• Urban water supplies down
• Conflict with neighbours
• Comparison with Hong Kong and Taiwan.
• - Functions of HK for China
• - Taiwan land reform, forex reserves,1990 5Y
  plan for small enterprises