Redesigning the Dragon Financial Reform in the Peoples Republic of China

Категория реферата: Рефераты по экономической теории
Теги реферата: оформление доклада титульный лист, реферат на тему технология
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Conclusions

In comparison with other countries undergoing transition from centrally-planned economic systems, China had the luxury of initiating its reforms at a time when it faced no macroeconomic or serious political crisis. It was able to adopt a two-track approach to economic reform:
China continued state control of existing enterprises while loosening economic controls enough to permit growth of a new, nonstate sector. This was possible in part because the inefficient state sector was a small share of the economy, compared to most socialist nations.

China’s reform experience thus far has been one of “enabling” reform, allowing “marketization” instead of forcing “privatization,” getting government to “step out of the way” of the flows of commerce. The results have been good to excellent in the productive sectors, but the reform has not yet succeeded in the fiscal and monetary sectors, which are the domains of government. Here the government can’t step out of the way; it must build the proper tools and structures to manage these sectors.[39] It is in these areas, and in the efforts to reduce administration, dismantle
SOEs, and provide an adequate social insurance system for displaced workers and affected citizens that China faces its true reform challenges.

To further evaluate how far China has come down the path of economic transition, we look to a definition of transition used by the World Bank, which describes these three components:
Liberalization: freeing prices, trade and entry to markets from state controls, while stabilizing the economy. Stabilization is an essential component to liberalization.
Clarifying property rights and privatizing them where necessary. Requires re-creating the institutions that support market exchange and shape ownership, and especially the rule of law.
Reshaping social services and the social safety net to ease the pain of transition while propelling the reform process forward.

Examination of the Chinese experience shows that liberalization has taken place to some degree, though much reform of prices, trade and markets is still to be done. However, privatization and the assignment of property rights are still very undeveloped, and the most difficult parts of transition ahead are dependent on a still-unachieved transfer of the social safety net from enterprise-based to government control.[40]

Were China to continue to grow at the rates of the last two decades, it would surpass the United States as the world’s largest economy in less than twenty years. Though some tapering off in the growth rate is expected, China, with its sheer size and dynamism, is emerging as one of the world’s economic powers. The reform policy choices it makes during this period of transition thus have not only domestic but international significance, as China’s domestic economic and social stability will be felt internationally. The rest of the world has ample reason for assisting
China in seeing these reforms through peacefully. Opening of economic activity within China and with the rest of the world will assist the process of political liberalization within the country, and will provide enhanced regional and global security.

Table 3. The Fiscal Situation in the Reform Period

Source: Wong, Christine P.W., Christopher Heady, and Wing T. Woo. Fiscal
Management and Economic Reform in the People’s Republic of China. Oxford
University Press. Hong Kong: 1995, p.24.
Table 5. Government Budgetary Expenditures

Source: Wong, Christine
P.W., Christopher Heady, and Wing T. Woo. Fiscal

Management and Economic Reform in the People’s
Republic of China. Oxford
University Press. Hong Kong: 1995, p.24.

Table 6. Composition of Tax Revenues

Source: Wong, Christine P.W., Christopher Heady, and Wing T. Woo. Fiscal
Management and Economic Reform in the People’s Republic of China. Oxford
University Press. Hong Kong: 1995, p.24.

Table 7. Changing Role of the State

Source: Harrold, Peter. China’s Reform Experience to Date. World Bank
Discussion Papers #180. The World Bank:Washington, DC. 1992.

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