Dilemmas of Reform in Jiang Zemin's China

Dilemmas of Reform in Jiang Zemin's China

Dilemmas of Reform in Jiang Zemin's China

Dilemmas of Reform in Jiang Zemin's China

Synopsis

As China enters a stage of economic reform more challenging and risky than any that has gone before, the pressure of political liberalization grows apace. This volume explores the dilemmas of this phase of complex change.

Excerpt

China's economic reforms since 1978 have led to economic, political, social, and cultural changes. Economic reform originated in the agricultural sector with the elimination of the people's commune and establishment of the household responsibility system. This stimulated the enthusiasm of farmers and led to a rapid increase of agricultural production. The rise of township and village enterprises successfully absorbed more than 120 million surplus laborers in the countryside. The initial success of economic reform in the rural areas led to urban reforms. Over 100 million laborers released from the agricultural sector accelerated the movement of laborers that sped up the development of a nonstate economy. Now, private enterprises exceed the performance of the state-owned enterprises (SOEs) by contributing more than 70 percent of the gross national production. At the same time, SOEs began to carry out ownership reforms, introducing shareholding and cooperative shareholding.

Economic reform has led to the transformation of a predominantly state-owned and centrally planned economy to a market economy. A stock market, real estate market, and labor market have emerged, and all the crucial elements for a market economy have come into being. Pushed by economic freedom and the market economy, the government has begun to recognize the legitimacy of private ownership and freedom of choice in the economy. The development of a market economy has become irreversible.

The rise of a market economy has led to political changes. As the central government reduced the size of its bureaucracy and curtailed its own authority, local governments strengthened their power in finance, banking, and personnel management. With the emergence of local economies, relations between the central and local governments have become increasingly tense, and local authorities are able to influence and restrain the central government in policymaking and implementation. As a result, the centralized leadership of the Chinese Communist Party (CCP) faces an unprecedented challenge. Additionally, the rise of localism has accelerated the . . .

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