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4. The Political Economy of Development in Communist China: China and the Market
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4 The Political Econom y o f Developmen t in Communist China : China an d the Marke t Jan S. Prybyl a 1. Argument an d Definition s Outline of Argument I will argu e tha t • i n orde r t o moderniz e an d prosper , th e economi c syste m Chin a adopted fro m th e Soviet s i n th e earl y 1950 s an d subsequentl y modified throug h spasmodic , ofte n spectacular , bu t structurall y minor polic y adjustments , ha s t o b e discarde d an d replace d b y the marke t system . Th e transformatio n mus t b e trul y intersys temic , that is , total; • complet e transitio n t o th e marke t system , althoug h bese t b y enormous difficultie s an d alway s subjec t t o politica l hazards , i s not onl y conceivabl e bu t likel y t o happen i n th e perhaps no t to o remote future ; • shoul d suc h transition , spreadin g a s i t doe s fro m th e south , b e prevented fro m materializin g i n th e whol e o f China, thos e part s of th e countr y wher e th e proces s o f marketizatio n i s presentl y the mos t dynami c an d advanced—th e souther n coasta l prov inces —may tr y t o find alternativ e way s of bringing abou t transi 61 62 JanS.Prybyl a tion by , for example , establishing som e form o f economic associ ation wit h Chines e marke t area s outsid e China , suc h a s Hon g Kong an d Taiwan . Wer e thi s t o occu r (an d th e attitud e o f th e People's Liberatio n Arm y wil l certainl y b e critica l i n thi s mat ter ), i t woul d hav e t o happe n befor e th e takeove r o f Hon g Kon g by Chin a i n 1997 . Tha t i s s o becaus e withi n a n economicall y unreformed o r half-reforme d an d politicall y left-reactionar y China, Hon g Kon g wil l withe r away . Suc h a n even t woul d al most certainl y releas e laten t centrifuga l politica l an d economi c forces i n China , an d lea d t o change s i n th e politica l makeu p o f the country a s presently constituted ; • transitio n t o a marke t syste m i n th e whol e o r part s o f Chin a requires a t som e poin t th e removal fro m monopol y powe r o f th e Communist party ; th e irreversibl e deca y o f th e plan , combine d with emergin g bu t a s o f no w unintegrate d o r partiall y linke d markets, wil l hav e a persuasiv e bu t no t determinin g influenc e on th e dissolution o f the Chinese communist regime ; • transitio n t o th e marke t syste m ha s t o fulfil l severa l conditions , which althoug h sociall y costl y i n th e shor t run , ca n b e me t in Chin a mor e easil y tha n i n som e othe r countries , notabl y i n the formerl y socialis t republic s tha t onc e mad e u p th e Sovie t Union. Some Definitions The followin g ar e th e meaning s I attac h t o term s critica l t o th e understanding o f the abov e argument . Economic System. A n economi c syste m i s a mechanis m mad e u p of integrated , compatible , internall y consistent , interrelated , an d interacting institution s (agreed-o n an d legall y protecte d way s o f doing things ) an d ideas , bot h positiv e (analytica l theories ) an d normative (economi c ethics) . It i s a livin g organism ; a n evolving , complex, extended socia l order . To...