Transforming China: Globalization, Transition and Development (2004Anthem Studies in Political Economy and Globalization) - Hardcover

Nolan, Peter

Hardcover

ISBN 10: 1843311224 ISBN 13: 9781843311225

Verlag: Anthem Press, 2004

Inhaltsangabe

At the end of the 1970s, China was a poor country with a huge population, ruled by the Chinese Communist Party. The domestic economy was organized through direct administrative instructions and was isolated from the international economy. After a quarter of a century, China has been transformed beyond imagination. In the course of this transformation, China's policymakers have faced enormous challenges.

The essays in this book address different aspects of those challenges. The 'development' challenge involved devising policies that would raise the mass of the Chinese people out of poverty and avoid the disasters that had, in the worst cases, caused millions of deaths through famine. The 'transition' challenge involved, firstly, resolving the relationship between changes in the economic and political systems; and secondly, finding the correct sequence and nature of reforms necessary to improve economic performance. The 'globalization' challenge involved identifying the best way in which to integrate China’s economic system with the international economy at a time of revolutionary change in the global business system. These essays seek both to enhance understanding of China's immense success in meeting these challenges in the past and to provide an indication of the challenges that still lie ahead. China's system reforms have been described as 'groping for stones to cross the river'. The journey across the river is far from over, and the other bank is only dimly visible.

These essays both enhance an understanding of China's immense success in meeting these challenges in the past and provide an indication of the challenges that still lie ahead. China's system reforms have been described as 'groping for stones to cross the river'. The journey across the river is far from over, and the other bank is only dimly visible.

Über diesen Titel

Über die Autorin bzw. den Autor

Peter Nolan was a television news reporter whose career in Chicago at WMAQ-TV and WBBM-TV spanned the 1960's, 70's and 80's. He won three Emmy's and several journalism awards including Chicago Magazine's best TV reporter. He also worked as a broadcast journalist in Niagara Fall, New York and Youngstown, Ohio. Writing credits: Author of the critically praised CAMPAIGN! The 1983 Election that Rocked Chicago. (Amina Press 2012), Op Ed Chicago Sun Times 12/30/06, Op Ed Sun Times 1/8/2009.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

Tranforming China

Globalization, Transition and Development

By Peter Nolan

Wimbledon Publishing Company

Copyright © 2004 Peter Nolan
All rights reserved.

ISBN: 978-1-84331-122-5

Contents

Acknowledgements, vi, 
Introduction, 1, 
1. The Starting Point of Liberalization: China and the Former USSR on the Eve of Reform, 7, 
2. China's New Development Path: Towards Capitalist Markets, Market Socialism or Bureaucratic Market Muddle?, 45, 
3. Politics, Planning, and the Transition from Stalinism: The Case of China, 77, 
4. Democratization, Human Rights and Economic Reform: The Case of China and Russia, 103, 
5. Beyond Privatization: Institutional Innovation and Growth in China's Large State-Owned Enterprises (with Wang Xiaoqiang), 131, 
6. China and the Global Business Revolution, 185, 
7. The Challenge of Globalization for Large Chinese Firms (with Zhangjin), 233, 
8. The Causation and Prevention of Famines: A Critique of AK Sen, 297, 
Epilogue: Adam Smith and the contradictions of the Free Market Economy: a note, 325, 

CHAPTER 1

THE STARTING POINT OF LIBERALIZATION: CHINA AND THE FORMER USSR ON THE EVE OF REFORM

The contrast in performance of China and the former USSR under reform policies has been dramatic. In China there was explosive growth, a large reduction in poverty and a major improvement in most 'physical quality of life indicators' (Banister 1992, World Bank 1992a). The economy of the former USSR collapsed, alongside massive psychological disorientation and a large deterioration in physical quality of life indicators, including a huge rise in death rates (Ellman 1994). The contrast in reform paths is well known. China's approach to economic reform was experimental and evolutionary, under an authoritarian political system. The USSR followed the 'transition orthodoxy' of revolutionary political change under Gorbachev, followed by shock therapy and rapid privatization in the Russian Federation under Yeltsin.

Systematic comparison of the two countries' experience under reform is still limited (but see, for instance, Aslund 1989, Sachs and Woo 1994, Goldman 1994: chapter 9, Nolan 1994, 1995). Much the most influential proposition in this literature is the argument that the difference in results is explained not by the difference in reform policies but, rather, by the different starting-points:

It was neither gradualism nor experimentation, but rather China's economic structure, that proved so felicitous to reform. China began reform as a peasant agricultural society, EEFSU [Eastern Europe and the former Soviet Union] as urban and overindustrialised ... In Gerschenkron's famous phrase [China] had the 'advantage of backwardness' (Sachs and Woo 1994: 102-4).

This proposition has been absorbed rapidly into the mainstream of popular perception of the reasons for the difference in outcome from post-Stalinist reform in China and the former USSR.

This chapter examines the two systems of political economy on the eve of their respective system reforms in order to evaluate their respective possibilities for accelerated growth. It concludes that there were indeed large system differences. However, many of these were to China's disadvantage. It argues that despite the differences, the systems each possessed large possibilities for accelerated growth with the introduction of market forces in an incremental fashion, in a stable political environment with an effective state apparatus. These possibilities stemmed to a considerable degree from common features of the communist system. The chapter concludes that on the eve of reform China did not on balance possess greater possibilities for improved system performance than did the USSR. It argues that the main explanation for the differences in outcome must, therefore, be sought in the policies chosen, not in system differences. We begin by comparing both societies on the basis of economic factors crucial to the possibility of accelerated growth.

ECONOMIC FACTORS

Advantages of the Latecomer

There are three main 'advantages of the latecomer'. Firstly, it may be advantageous to have a large share of the population in agriculture, since a rural labour surplus provides the potentiality for rapid 'Lewis-type' growth in labour-intensive industries. Secondly, latecomers can draw upon a much greater pool of international savings than was available to the early starters. Thirdly, a latecomer can employ more advanced technology than was available to the early industrializers. However, there are many problems with these arguments as applied to the Sino-Soviet comparison.

Economic Structure

Industry In the early 1980s a reported 62 per cent of Soviet GDP came from the industrial sector, which is a higher share than even for the advanced industrial economies (Table 1.1). However, China also was hugely 'over-industrialized'. In China in the early 1980s, industry reportedly produced 47 per cent of GDP, ahead of even the advanced capitalist countries (Table 1.1). There were serious inefficiencies in both Chinese and Soviet industry, but 'over-industrialization' may have been an even greater burden for China than for the USSR, since in China's case the 'over-industrialization' was in a vastly poorer country, with a much lower income level from which to generate savings to finance investment.

In the USSR in the early 1980s the proportion reportedly employed in industry (around 45 per cent: Table 1.1) was higher than in the advanced economies. However, the difference was not large, and it stood at a similar figure in several of the advanced capitalist economies. Moreover, to some degree the relatively high proportion employed in industry reflected the high levels of over-manning in industry in all the communist countries. This was a form of 'disguised unemployment' (Arnot 1988). Suitable institutional reform could have raised labour productivity and encouraged state enterprise managers to release labour to be employed in other sectors.

Agriculture China's employment structure was close to that of a typical low-income country, with around three-quarters of the population still employed in agriculture. Although the USSR had a much lower proportion of the workforce employed in the farm sector, the share was still large compared to the advanced capitalist countries (Table 1.1) and was probably much higher than the usually reported figure (see Table 1.13 for a much higher estimate). There were large possibilities in Soviet agriculture, as in Soviet state industry, for releasing surplus labour to undertake useful work in other sectors.

Having a large proportion of national output and employment generated in agriculture is not necessarily an advantage for a reforming communist country. An important reason for the success of the East Asian Four Little Dragons was that each had a relatively small farm sector at the start of their phase of accelerated growth (Little 1979: 450). In a densely populated economy such as China's the capital needs for expanding agriculture are large. If a sufficient condition of rapid growth was having a large share of output and employment in the farm sector, impoverished countries would long ago have 'caught up'.

Services Both China and the USSR had a low proportion of employment in the service sector (Table 1.1). They each had large possibilities for improvements in welfare and for attracting surplus labour from industry, agriculture and from the state bureaucracy, simply by allowing people to set up service sector...

Details zur Ausgabe

• Verlag: Anthem Press
• Erscheinungsdatum: 2004
• Sprache: Englisch
• ISBN 10: 1843311224
• ISBN 13: 9781843311225
• Einband: Gebundene Ausgabe
• Auflage: 1
• Anzahl der Seiten: 344
• Kontakt zum Hersteller: preigu GmbH & Co. KG; mail@preigu.de; ; Lengericher Landstr. 19; Osnabrück; Niedersachsen; 49078; Deutschland