China's Economic Future—Challenges to U.S. Policy (review)

154 China Review International: Vol. 6, No. ?, Spring 1999© 1999 by University ofHawai'i Press formation and additional sources. They amplify and enrich the letters so that in tandem they give us a rare glimpse of China on the eve ofthe Pacific War. Phyllis Zimmerman Phyllis Zimmerman is an associateprofessor ofhistory atBall State University specializing in U.S. Military History. Joint Economic Committee, Congress ofthe United States, editor. China's Economic Future—Challenges to U.S. Policy. Armonk, New York: M. E. Sharpe, 1997. xvii, 545 pp. Hardcover $68.95, 1SBN 0-7656-0126-5. Paperback $29.95, isbn 0-7656-0127-3. This reviewer's first exposure to a study ofthe Chinese economy compiled under the auspices of the JEC was as a student in Carl Riskin's Chinese Economy class at Columbia in 1983. Riskin adopted the most recent volume at that time as one of the assigned course texts. It was an excellent introduction to the early reforms, their recent historical context, and varying assessments oftheir direction. Since that first exposure, I have looked forward to the publication ofperiodic successor volumes as concise, comprehensive analyses ofthe current state of China's political economy. Having just used China's Economic Future as one of the required texts in a class that I teach on Doing Business with China at the University of Kansas, I am happy to report that this most recent entry in the series accomplishes the same purposes in excellent fashion. The Committee chair's letter of transmittal identifies the volume's target audience as "the JEC, Congress, and the public." It goes on to characterize the present as "an important time in the history ofUS-China relations" and expresses the hope that the study "will provide to the U.S. Congress and other interested parties a useful tool in guiding foreign and economic policy toward China." In view ofthe wealth ofinformation contained in this volume, one hopes that more than a few members of Congress will read it. The design and organization of the study are the handiwork ofthe Congressional Research Service, and the more than five hundred pages of text embody the thinking ofAmerica's leading China specialists in each of the areas surveyed. The executive overview penned by John P. Hardt and Robert Motrice lays out the key themes ranging across a spectrum from "optimistic projections" on the one hand to the "formidable constraints" to progress on the other. They note the stimula- Reviews 155 tion ofgrowth in domestic output and commerce occasioned by China's "significant integration into Asian trade and investment . . . and increasing commercial relations with the global market system." But they also identify the key problem sectors: "agricultural productivity and marketing, large scale industry, all elements ofinfrastructure outside die special coastal areas, and sectors ofthe economy unable to compete in the global market widiout subsidies, protection and reliance on very low wages." Early on, they note a key tension (which resonates throughout the volume) between economic improvement as a basis for political legitimacy and continued reliance on populist authoritarian solutions to maintain political stability and popular support. The authors' contributions are organized under four headings: (1) key themes ofthe context for assessing China into the twenty-first century; (2) domestic economic modernization and reform (constituting the bulk ofthe volume); (3) external economic relations; and (4) Sino-U.S. economic relations into the twenty-first century. The two lead authors, Barry Naughton and Kenneth Lieberthal, summarize key themes from their recent book-length studies ofChinese economics and politics. Naughton identifies a number ofrespects in which China's approach to reform has differed from other countries' transitional strategies. In contrast to the "rationalizing reforms" tried in Eastern Europe during the 1960s, China's reforms have "involved the injection ofmarket forces and market prices into the economy from the earliest stages." Key to China's approach has been a "dual track" system in which a traditional plan and a market channel have coexisted for the allocation ofgiven goods, with economic growth concentrated in the latter. Successive sectors of the economy have been separated from the planned core, not through an intentional strategy, but by virtue ofthe nature ofChina's policy process. The process...