Blockchain Papers

Xiaopei Yan

No abstract is available for this record.

Yingyi Qian, Chenggang Xu

China's thirteen years of economic reforms (1979-1991) have achieved an average GNP annual growth rate of 8.6%.What makes China's reforms differ from those of Eastern Europe and the Soviet Union is the sustained entry and expansion of the non-state sector.We argue that the organization structure of the economy matters.Unlike their unitary hierarchical structure based on functional or specialization principles (the Uform), China's hierarchical economy has been the multi-layer-multi-regional one mainly based on territorial principle (the deep M-form, or briefly, the M-form).Reforms have further decentralized the M-form economy along regional lines, which provided flexibility and opportunities for carrying out regional experiments, for the rise of nonstate enterprises, and for the emergence of markets.This is why China's non-state sector share of industrial output increased from 22% in 1978 to 47% in 1991 and its private sector's share from zero to about 10%, both being achieved without mass privatization and changes in the political system.2 Data sources in this paper are from Statistical Yearbook of China (various issues from 1985 to 1992), otherwise noted.3 Statistical Communique of the State Statistical Bureau on the 1992 National Economic and Social Development, February 18, 1992. 4 The export-GNP ratios are calculated based on the official exchange rate and are upward biased.But the dramatic increase of export share in GNP during the reform is unmistaken. 2 both before and after their radical transformations in 1989.It appears that China had no coherent reform programs, no commitment to private ownership, and no changes in the political system, and China's economy was still not fully liberalized.From both the theoretical and policy perspectives, China's different reform strategies and outstanding reform performances are particularly interesting and puzzling.The economic reforms in China formally started in 1979 following the Third Plenum of the Eleventh Congress of the Chinese Communist Party in December 1978.The starting time was later than that of Yugoslavia (1950) and Hungary ( 1968) and was about the same as for Poland (1980), and earlier than the Soviet Union (1986).Between 1979 and 1991, China's GNP grew at an average annual rate of 8.6%, or at 7.2% on the per capita basis. 2 In 1992, the growth of GNP reached 12.8%. 3Exports grew at a faster pace, so that China's export-GNP ratio increased from below 5% in 1978 to nearly 20% in 1991. 4 Also in this period, inflation was kept within a single-digit range except for three years (11.9% in 1985, 20.7% in 1988 and 16.3% in 1989); the household bank deposits to GNP ratio increased from 6% in 1978 to 46% in 1991; and the government budget deficit accounted for about 2-3% of GNP, about half of which was financed from bond issues (Table 1.1).Even more convincing evidence of the success of the reform is the increase in consumption and consumer durable goods by an average Chinese consumer in physical terms.For example, between 1978 and 1991, an average Chinese consumer increased his/her consumption about three times for edible vegetable oil, pork, and eggs (Table 1.2).In the rural areas, which account for about 75% of total population, the living space per person increased about 130% between 1978 and 1991 (Table 1.3).The 5 Data source for Hungary and Poland is from Table 9.1 of Kornai (1992).6 For example, Summers (1992) expressed this view when he highly praised China's reform performance.Sachs (1992) also expressed similar ideas during his interview with the Chinese Journal of Comparative Economic and Social Systems.

Christine Wong

Finding the proper balance between central control and local autonomy is a perennial problem in the Chinese economy, and the Chinese fiscal system has undergone numerous changes in central-provincial revenue-sharing arrangements since the 1950s. In the post-Mao period, fiscal decentralization began in 1980 under the slogan of “cooking in separate kitchens” ( fenzao chifan ), and a series of reforms was implemented to put local governments increasingly on a self-financing basis. However, this attempt to revamp the financial interaction between the central and provincial governments has been made immensely more complicated by rapid changes in the fiscal system and the shifting composition of revenues and expenditures brought by economic reform.

Jean C. Robinson

No abstract is available for this record.

Vivienne Shue

China's current reform program in agriculture is enormously ambitious in intent and highly significant for all aspects of future economic and political development. It represents a rejection of past policies of large-scale labor mobilization and communal self-reliance in favor of commercialization and individual incentives for peasants. Diversification of the rural economy, decentralization of farm management, production specialization, crop selection in accord with comparative advantage, expansion of free markets, release of labor from the land, and a shift toward household-based, rather than collective, cultivation have all been important elements of the new line. The resultant explosion of pent-up rural entrepreneurship, fueled also by marked state procurement price rises, produced dramatically positive effects on overall productivity, peasant incomes, and standards of living. These led to widespread introduction of even more radical reforms. The recent agricultural boom will be difficult to sustain, however, without worsening China's already serious budget and finance crisis. Today's leadership coalition also faces intrabureaucratic opposition from cadres at all levels who are threatened by the reorganizations, and widespread popular unease about new patterns of social inequality that may accompany greater reliance on market relations. Decentralized management, a wider role for the market, and the vigor of new commercial combines also appear to be hampering the ability of central planners to regulate the economy. Such factors are capable of producing their own political backlash. The new course is, therefore, still a risky gamble in search of a workable balance between plan and market, growth and equality, national priorities and local demands.