Hostname: page-component-7bb8b95d7b-l4ctd Total loading time: 0 Render date: 2024-09-16T11:40:44.790Z Has data issue: false hasContentIssue false
  • English
  • Français

The Rise of China as an Economic Power

Published online by Cambridge University Press:  26 March 2020

C. Goodhart  and
C. Xu
Get access Rights & Permissions [Opens in a new window]

Abstract

In the twenty years since the Cultural Revolution, China has maintained fast real growth. This occurred despite China having similar problems to other transitional economies, e.g. loss-making State Owned Enterprises (SOEs), eroding fiscal revenues and inflation, (Section 3).

Although China initially adopted the Soviet central planning model, after the 1950s break Chinese planning changed towards a regionally-based system with local planning (Section 2). In contrast to the centrally-based, functionally-specialised (U-form or unitary structure) Soviet model, the Chinese economy is organised on a multi-layer-multi-regional (M-form) basis. This encour aged development of small size township and village enterprises (TVEs), the main engine of Chinese growth.

Power and control remained with the Party and the State, but was diffused much more widely, regionally and locally. This allowed initiatives at lower (political) levels to establish institutions, both in agriculture (the ‘household responsibility system’) and industry (TVEs), without state protection. Even among regionally controlled SOEs, ‘tournament rivalry’ between regions, etc., and between SOEs and TVEs provided competition.

Type
Articles
Information
National Institute Economic Review , Volume 155 , February 1996 , pp. 56 - 80
Copyright
Copyright © 1996 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

We are grateful for research assistance by Mr J. Chen of STICERD at LSE, for detailed editorial help from Peter Oppenheimer, and for comments from other members of the Group.

References

Byrd, W. and Lin, Q. (1990), China's Rural Industry: Structure, Development and Reform, Oxford University Press.Google Scholar
Chandler, A.D. (1962), Strategy and Structure: Chapters in the History of the American Industrial Enterprise, Cambridge (Mass) : SAGE Publications.Google Scholar
Chen, Y. (1989), ‘tongyi sixiang jiji tiaozheng, cujin xiangzhen qiye chixu xietiao jiankang fazhan’, Chinese Township -Village Enterprise (Zhongguo xiangzhen qiye), 9:pp. 1–8, September.Google Scholar
CS First Boston (1995), A Guide to Russian Debt Markets, December, London: CS First Boston.Google Scholar
de Jonquières, G. and Dawkins, W. (1995), ‘China Plans Reforms to Break Trade Stalemate’, Financial Times, p. 1, November 20th.Google Scholar
Eberstadt, N. (1994), ‘Demographic shocks after Communism: Eastern Germany, 1989-93’, Population and Development Review, 20, (1), (March), pp. 137–152.CrossRefGoogle Scholar
Ebrill, L.P., et al, (1994), ‘Poland-the path to a market economy’, IMF Occasional Papers, no. 113, October, Washington DC. Economic Commission for Europe (1995), Economic Survey of Europe in 1994-95, Geneva: United Nations.Google Scholar
Ellman, M. (1994), ‘The increase in death and disease under ‘katastroika “, Cambridge Journal of Economics, 18:pp. 329–355.CrossRefGoogle Scholar
Flemming, J. and Matthews, R. (1994), ‘Reform in Russia’, National Institute Economic Review, no. 149, (August), pp. 65–82.CrossRefGoogle Scholar
Groves, T., Hong, Y., McMillan, J., and Naughton, B. (1994), ‘Autonomy and incentives in Chinese state enterprises’, Quarterly Journal of Economics, 109 (1).CrossRefGoogle Scholar
Howes, S. (1993), ‘Income inequality in urban China in the 1980's: level, trends and determinants’, London School of Economics Suntory-Toyota International Centre for Economics and Related Disciplines Working Paper: EF/3, July.Google Scholar
Huang, G. and Wong, C. (1995), ‘Unification of China's foreign exchange rates’, Department of Economics and Finance, City University of Hong Kong, Working Paper no. 64, (March).Google Scholar
Huang, Y. (1994), ‘Information, bureaucracy and economic reforms in China and in the former Soviet Union’, World Politics 47 (October), pp. 102–34.CrossRefGoogle Scholar
Hussain, A., Lanjouw, P. and Stern, N. (1994), ‘Income inequalities in China: evidence from household survey data’, World Development, 22(12):pp. 1947–57, December.Google Scholar
International Monetary Fund, International Financial Statistics, various years. Washington DC: International Monetary Fund.Google Scholar
Jefferson, G. and Rawski, T. (1994), ‘Enterprise reform in Chinese industry’, Journal of Economic Perspectives, 8 (2).CrossRefGoogle Scholar
Li, X. and Ma, Y. (1994), ‘Fiscal decentralisation, financial reform and macroeconomic control in China: the implications for European Monetary Union’, International Centre for Macroeconomic Modelling, University of Strathcylde, Discussion Paper Series no. 28, (October).Google Scholar
Lund, J. (1995), ‘China: statistical haze hides growth path’, Asian Monetary Monitor, 19, 3, (May-June), pp. 13–23.Google Scholar
Maskin, E., Qian, Y., and Xu, C. (1995), ‘Incentives and information in M-form and U-form organizations: theory and evidence’, mimeo, Harvard University, Stanford University, and London School of Economics.Google Scholar
McKinnon, R. (1993), ‘Financial growth and macroeconomic stability in China, 1978-92: Implications for Russia and Eastern Europe’, paper presented at the Conference on Transition of the Communist Countries in Pacific Asia, Asia Foundation, San Francisco, May 6-8.CrossRefGoogle Scholar
McMillan, J. and Naughton, B. (1992), ‘How to reform a planned economy: lessons from China’, Oxford Review of Economic Policy, 8(1), Spring 1992, pp. 130–43.CrossRefGoogle Scholar
Münchau, W. (1995), ‘Cultural wall falls to DM's incursion: a report on German investment in China’, Financial Times, p. 15, July 27th.Google Scholar
National Bank of Hungary, The Annual Reports of the National Bank of Hungary, National Bank of Hungary.Google Scholar
Nove, A. (1983), The Economics of Feasible Socialism, London: George, Allen and Unwin.Google Scholar
People's Daily (Overseas Edition), 20 October 1995.Google Scholar
Perkins, D. (1988), ‘Reforming China's economic system’, Journal of Economic Literature, 26 (2).Google Scholar
Perkins, D. (1994), ‘Completing China's move to the market’, Journal of Economic Perspectives, 8 (2).CrossRefGoogle Scholar
Putterman, L. (1993), Continuity And Change In China's Rural Development: Collective And Reform Eras In Perspective. Oxford: Oxford University Press.CrossRefGoogle Scholar
Qian, Y. and Xu, C. (1993a), ‘The M-form hierarchy and China's economic reform’, European Economic Review, April.CrossRefGoogle Scholar
Qian, Y. and Xu, C. (1993b), ‘Why China's economic reforms differ: the M-form hierarchy and entry/expansion of the non-state sector’, Economics of Transition, 1 (2).CrossRefGoogle Scholar
Sachs, J. and Woo, W.T. (1994), ‘Factors in the economic reforms of China, Eastern Europe, and the former Soviet Union’, Economic Policy: A European Forum, 9 (18).CrossRefGoogle Scholar
Salomon Brothers (1995), ‘The PRC - Progress Report on Reforms, Part I’, Weekly Pacific Perspectives, Asia-Pacific Equity Research, 7th August, pp. 10–12.Google Scholar
Sheng, A. (1995), ‘Financial developments in China and implications for Hong Kong’, paper presented at Conference on ‘China's Economy 2000, and its Influence on Hong Kong, Macau and Taiwan’, University of East Asia, Macau, April 28/29. Sone, Y., (1995), ‘China in the post-Deng era’, Nomura Research Institute Quarterly, 4, (2), (Summer), pp. 86-107.Google Scholar
Summers, R. and Heston, A. (1991), ‘The Penn world table (mark 5): an expanded set of international comparisons, 1950-1988’, Quarterly Journal of Economics, 106 (2), May, pp. 327–368.CrossRefGoogle Scholar
State Statistic Bureau (1985), Almanac of Population, Beijing: China Statistical Press.Google Scholar
State Statistic Bureau, Statistical Yearbook of China (Chinese edition), 1986, 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, Beijing: China Statistical Press.Google Scholar
State Statistic Bureau (1993), Statistical Materials of China by Region, Beijing: China Statistical Press.Google Scholar
United Nations (1994), Human Development Report, (published for the UN Development Programme, Oxford University Press, Oxford, UK).Google Scholar
Wang, D. (1995), ‘Is there any trade-off between anti-inflation and anti-unemployment for Chinese macroeconomic policy?’, The People's Bank of China, unpublished paper, (September).Google Scholar
Wang, H. (1986), Economic History of New China's Industry, Beijing: Economic Management Press.Google Scholar
Wang, H. and Chen, X. (eds.) (1991), Chanye zuzhi ji youxiao jingzheng - zhongguo chanye zuzhi de chubu yanjiou (Industrial Organization and Effective Competition - A Preliminary Study of Chinese Industrial Organization) Beijing: China Economy Press.Google Scholar
Wang, S. (1995), ‘Regional disparities and central government intervention’, Journal of Social Sciences, July, Hong Kong.Google Scholar
Wei, S. and Lian, P. (1994), ‘Love and hate: state and non-state firms in transition economies’, mimeo, Harvard University.Google Scholar
Weitzman, M., and Xu, C. (1994), ‘Chinese township-village enterprise as vaguely defined cooperatives’, Journal of Comparative Economics, 18 (2).CrossRefGoogle Scholar
Williamson, O. (1975), Markets and Hierarchies, New York: Free Press.Google Scholar
Wolf, M. (1995), ‘Mixed record on tax reform’, p II in the Special Issue on China, Financial Times, November 20th.Google Scholar
World Bank (1993), Global Economic Prospects and the Developing Countries, Washington, D.C. : the World Bank.Google Scholar
World Bank (1994), Socio-Economic Time-Series Access and Retrieval System, (July), Washington, D.C.: the World Bank. World Bank (1993, 1994), Trends in developing economies 1994, Washington, D.C.: the World Bank.Google Scholar
World Bank (1995), World Bank Atlas, Washington, D.C.: the World Bank.Google Scholar
Xu, C. (1995), A Different Transition Path: Ownership, Performance, and Influence of Chinese Rural Industrial Enterprises New York: Garland Publishing, Inc.Google Scholar
Yusuf, S. (1994), ‘China's macroeconomic performance and management during transition’, Journal of Economic Perspectives, 8 (2), Spring 1994, pp. 71–92.CrossRefGoogle Scholar
Zhou, T.H. (ed.) (1984), Dangdai Zhongguo de Jingji Tizhi Gaige (Economic System Reform of Contemporary China) Beijing: China Social Sience Press.Google Scholar
Zhu, R. (ed.) (1985), Dangdai Zhongguo de Jingji Guanli (The Economic Management of Contemporary China) Beijing: Chinese Social Science Press.Google Scholar