China's Economic Evolution (review)

Reviews 413© 1996 by University ofHawai'i Press Chia Ning is an assistantprofessor ofhistory specializing in studies ofChina's Inner Asian frontiers and minority nationalities. Piet Frantzen, editor. China's Economic Evolution. Brussels: VUB Press, 1993. 142 pp. Paperback $25.00, isbn 90-5487-055-9. This collection ofseven essays was put together in the context ofa visit to China in April 1993 by a delegation ofeconomics professors from the Belgium-China Cultural Center. The book's aim is to provide some background information and analysis on China's recent economic reforms bodi for potential foreign investors and for academics trying to understand economic change in China. The most interesting chapters are those by two Chinese academicians from the Chinese Academy of Social Sciences and by Sylvain Plasschaert from the University ofAntwerp. Liu Shijin from the Institute of Industrial Economics at CASS attempts to apply public-choice theory to an analysis ofthe process ofeconomic reform in China. By analyzing the main players in the reforms in the rural, urban non-state, state enterprise, and foreign-investment sectors, he shows what factors influence the "step-by-step" process of Chinese reforms, stressing in particular the different pattern and pace of reform in different sectors. While acknowledging the success of the process so far, he points to the big question over the reform of the state enterprises as a major issue for the future. His chapter provides an interesting insight into the reforms, though one cannot help but suspect that many of the same points have been made by others using a less specialized vocabulary. The second chapter, by Liu Yingqiu of the Institute of Economics, analyzes the behavioral characteristics of state and non-state enterprises in China. It is interesting that, while the first chapter makes use almost entirely of modern Western methods of analysis, it is felt necessary in chapter 2 to have an extended discussion (p. 33) ofwhether Marx and Engels advocated the elimination ofprivate ownership. After that, however, the author goes on to argue that the characteristics of neither the state nor private enterprises encourage long-term accumulation and that there is, therefore, a need for a move away from state ownership and for equal treatment of state and non-state enterprises. In the fifth chapter, Plasschaert analyzes the evolution ofChina's fiscal system in the direction of a modern tax system. This chapter starts with a general theoretical analysis of the revenue systems of market and centrally planned economies, and then analyzes the changes in China's fiscal system since 1978. It 414 China Review International: Vol. 3, No. 2, Fall 1996 characterizes the emerging system as a "quasi federal" one, but says diat the negative aspects of the rise of provincialism are more than balanced by the dynamism resulting from the freeing up oflocal economies. Three other chapters look at foreign investment in China, at the history of agricultural reforms (this is a quite useful survey, though there are many other similar surveys available), and at the banking system, and there is a very brief final article on the Shenzhen Stock Exchange by its general manager. These chapters are based mosdy on a limited range of sources and offer few new materials or ideas, at least for China scholars. Unfortunately the book is not edited as well as it might have been, with a lot of irritating little mistakes: the pinyin romanization is quite often wrong (e.g., "Guandong" and "Fujien"); Chinese authors are listed randomly under surname or given name; there are grammatical and a few spelling mistakes in English words; and details are too often open to question—such as the briefhistory of the Bank of China (p. 127), or the assertion that there is a lack of agricultural statistics for the period between 1987 and 1992 (p. 80). Overall the collection smacks a bit of a number of nonexperts writing about China on the basis of a little reading and a briefvisit—many ofthe chapters take official policies too much at face value, with insufficient stress on the very limited degree to which these policies are actually put into practice. Some of the articles provide useful material and ideas, but overall the book...