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Ch. 1. Introduction
- Hong Kong University Press, HKU
- Chapter
- Additional Information
CHAPTER ONE Clrina "as (J ri('lIl/rrlw.'oliral Irmlilion Introduction During 1978- 79 Deng Xiaoping became the paramollnt leader or tile People's Republic ofChirm (PRe) and launched China's economic reforms as a platform for lllodcmisalion. The last twenty years have seen dramatic changes as Chin.. moved from a centrally controlled communist slate towards a socialist market economy. While progress in the fir:.1 ten years was significant. the developments during the la~1 len years since the first edition of Ihis book have been nothing short of phenomenal. Yet it should not be forgotten Ihal China is one of the more ancient of human civilisations. wilh a recorded history of thousands of years. Politics and culture arc wclldeveloped and education continues to recei\C increased emphasis. Some parts of the technological base :Ire highly sophisticated. as evidenced by the ad\ llllced s:ltelli te programme. but many arc not and there arc great economic disparities between regions. The PRe is now irrevocably committed to continuing the economic refonn of the last two declIdes. In his keynote speech at the World BlInkllMF meeting in l'long Kong in Scptcmber 1997. Vice-Premier l im Rongji said the PRC"s refonllS were irrevcrsible and that the country would maintain its prescnt patlcm of high economic growth lind low inflation. In instituting the trllnsilion from a planned to a ·market economy with Chinesc characteristics'. China is on course to produc ing probably the most rema rka ble economic transfonnation in recorded history and is being \ie\\ed as the world 's next economic superpowcr. China has lIdopted a fundamentally different path in its process of transition to that of Russia and the eastern European countries. It has not rushed headlong to take on board western systems but has taken a gradual appro:lch to decent ralisation characterised by incremental, sequential and sometimes experimental reform procedures. Changes are taking place over a period of time against a background of stability and consistency. The seriousness of China's intentions can be seen from ils commitment to reform the state-owned enterprises. The restructuring will lead to redundancies of workers on a huge scale, estimated at between 15 and 20 million. Nevertheless Chinn is resolved to restnlcture these enterprises, many of which are loss-making, by mergers and closures in order to enhance productivity and profitability. Redeployment of labour will be possible through the growth in Ihe non-public sector which will be reinforced by further rcforms to the banking, finnnciai. forcign trade and other sectors of the economy. This restnleturing is a massive reversal of the policies of the previous regimes. The ' iron rice bowl' concept of guaranteed lifelong employment and cradle to grave welfare benefits was the keystone of the socialist state with its planned economy. At the 15th National Congress of the Communist Party of China in September 1997, Jiang Zemin, President of the PRe, explained that the policy of restnlcturing the state-owned enterprises is not intended to prejudice the mainstay status of the public sector of the economy but to strengthen and develop the establishment of the socialist market economy. As Zhu Rongji said at thc World Bank meeting, 'Afier years of reforms, we have formed a view about the reform and dcvelopment of state-owned enterprises and have identified a number of appropriate measures. What is urgent now is to sct up a new investment system in which the roles of thc government and of enterprises arc scparatcd: to rcform and improve the financial systcm to makc it modern: and to establish and improve a social security system. We will furthcr intcnsify our efforts in such refonn and strive to lead most loss-making entcrprises out of their present plight in three years.' A cornerstone of China's policy of economic reform and modernisation is to continue to nllract foreign investrncm, technology and expertise, through joint venture or other arrangements with foreign parties. As one of the greatest potential markets the world has known. China is in a good 2 [23.22.236.90] Project MUSE (2024-03-29 07:03 GMT)