Suchergebnisse

China has introduced a diverging set of policy measures to its state-owned enterprises (SOEs) since the reform began. Two key themes run through the whole process: expanding decision autonomy for enterprises and increasing the role of the market (Byrd 1991). It has been argued that these are also the two most important factors contributing to the success of reform in the state sector (Rawski 1994; Groves et al. 1994; Naughton 1995). In the literature, however, the success of China's SOE reform remains a controversial issue and the exact mechanisms through which the reforms have impacted on enterprise performance need to be explored (Sachs and Woo 1997; Huang and Duncan 1997a, 1998). Enterprise reform does not seem to have fully achieved the original objective of 'transforming the SOEs into efficient economic identities'. Inefficiency in the state sector is still one of the major problems facing the Chinese economy today. While it is accepted that comprehensive intervention is detrimental to enterprise performance, we argue that autonomy can deliver better efficiency only when the behaviour of firms or their managers are properly disciplined. These disciplines can be implemented either through direct government regulation or through the functioning of market mechanisms. Autonomy and discipline are the two most important elements of any successful liberalisation program for enterprises in transitional economies.

This volume is a report by leading international economic experts on China's economic priorities in the coming years. From various aspects of the domestic and foreign situation, China has now reached a critical juncture in its economic development. Unless China is able to overcome the difficulties in undertaking further reforms in the next ten years, China would be caught in the middle-income trap and be unable to become a modern country. The future course of China's economic development is also of great concern to the rest of the world because the socio-political-economic conditions in China will have significant impact on global economic prosperity and on global political harmony. The book is a product of close collaboration between the School of Economics at Fudan University and the Earth Institute at Columbia University. They cover a new paradigm for growth, short-term demand management, institutional reforms for middle-term growth, and strengthening the fundamentals for long-term growth

We assess the prospects of China's future growth performance in two steps. The first step is to project the potential growth path by determining whether past successes were generated by economic experimentation that produced non-capitalist institutional innovations (e.g. incentive contracts to state enterprises, profit-oriented supervision by state industrial bureaux, collectively-owned rural enterprises), or by institutional convergence toward the advanced WTO economies like France, Japan and the United States - two interpretations known respectively as the experimentalist school and the convergence school. Because WTO membership would harmonise China's economic institutions with those of capitalist economies and reduce the scope for experimentation, the experimentalist school would project a lower potential growth path than the convergence school. The fact that China has sought WTO membership voluntarily and with great tenacity is recognition of the correctness of the convergence interpretation. The second step in assessing China's growth prospects is to project the extent and duration that actual growth would deviate from potential growth. We assess the possibility of a WTO-induced macroeconomic shock that would generate such great political turmoil that prolonged economic stagnation would result. This macroeconomic shock could take two forms: a flood of imports that would cause widespread unemployment; and the entry of foreign banks that would bankrupt the domestic banks, and hence shut down the national credit system, crippling production economy-wide. Our main conclusions are that the government has the technical means to avert such this WTO-induced macroeconomic shock, and that the real threat to macroeconomic stability is China's weak fiscal position.

We identify the Asian financial crisis to be the result of the instabilities of short-term capital flows, inadequate prudential supervision in the financial markets of the developing countries, mistaken commitments to the fixed exchange rate regime, lack of international coordination in the regulation of international financial markets, absence of an international mechanism for the orderly working out of international debt, and inappropriate "rescue" packages imposed by the IMF. We recommend 30 policy reforms to make the international economy more resilient to financial turmoil, and to reduce the costs of such turmoil. We conclude that there is little particularly "Asian" about the Asian financial crisis. Even though official Washington, led by the IMF, proclaimed the crisis to be one of Asian capitalism, the more generic character of the crisis became all too clear during 1998, as the crisis spread to Russia, South Africa, and Brazil. Rather than an Asian crisis, the world is experiencing a type of global crisis that reflects the rapid arrival of global capitalism, in a world economy not yet used to the integration of the advanced and developing countries. Because we see no justification for the monopoly position of the IMF as the sole international institution on monetary affairs, we advocate the formation of regional monetary bodies to provide mutual support in the event of a financial crisis hitting one or another member country. We also advocate that an international bankruptcy system be established in order to accelerate an orderly workout of international debts when a developing country falls into an extreme indebtedness crisis. Existing key international organisations like the IMF have performed poorly, and they must be reformed to render them more transparent in their operations, and more democratic in their governance. Developing countries must have a greater role in designing future rescue packages extended to financially distressed countries so that rescue packages will no longer be biased toward the interests of the creditor countries. The new global financial architecture should have generalised floating of currencies as its mainstay. The bad debts of the financial and corporate sectors in Pacific Asia to be quickly resolved by the infusion of public money, and the takeover of some large domestic banks by foreign banks. Furthermore, the revival of the corporate sectors in Asia requires international creditors to write-down the value of their loans, and to convert part of their loans into equity participation. There is a serious mismatch in Pacific Asia, particularly in most of southeast Asia, between investment in physical hardware - factories and machinery - and investment in the social software - scientific research centers, administrative and judiciary systems, and growth of civil society. In a world of growing international competitiveness, when foreign direct investors are courted not just by Asia but Central Europe and Latin America, the concerns over governance are bound to grow, and to weigh increasingly heavily on the unreformed countries of Asia. The long-term competitiveness of Asia rests as much on "getting its institutions right" as on "getting the prices right."

Broadly speaking, two schools of thought have emerged to interpret China's rapid growth since 1978: the experimentalist school and the convergence school. The experimentalist school attributes China's successes to the evolutionary, experimental, and incremental nature of China's reforms. Specifically, the resulting non-capitalist institutions are claimed to be successful in (a) agriculture where land is not owned by the farmers; (b) township and village enterprises (TVEs) which are owned collectively by rural communities; and (c) state owned enterprises (SOEs) where increased competition and increased wage incentive, but not privatization, have been emphasized. The convergence school holds that China's successes are the consequences of its institutions being allowed to converge with those of non-socialist market economies, and that China's economic structure at the start of reforms is a major explanation for the rapid growth. China had a high population density heavily concentrated in low-wage agriculture, a condition that was favorable for labor-intensive export-led growth in other parts of East Asia. The convergence school also holds that China's gradualism results primarily from a lack of consensus over the proper course, with power still divided between market reformers and old-style socialists; and that the "innovative" non-capitalist institutions are responses to China's political circumstances and not to its economic circumstances. Perhaps the best test of the two approaches is whether China's policy choices are in fact leading to institutions harmonized with normal market economies or to more distinctive innovations. In this regard, the recent policy trend has been towards institutional harmonization rather than institutional innovation, suggesting that the government accepts that the ingredients for a dynamic market economy are already well-known.