China's Open Door Policy: The Quest for Foreign Technology and Capital: a Study of China's Special Trade

China's Open Door Policy: The Quest for Foreign Technology and Capital: a Study of China's Special Trade

China's Open Door Policy: The Quest for Foreign Technology and Capital: a Study of China's Special Trade

China's Open Door Policy: The Quest for Foreign Technology and Capital: a Study of China's Special Trade


The Open Door has become an integral part of China's economic development strategy since the late 1970's, and, not surprisingly, it has aroused considerable interest in developed countries. This book gives a sympathetic but critical survey of this policy, with particular attention to the problems that have prevented the Open Door from being implemented as rapidly as first intended. Placing the open door policy within a larger policy context, the authors focus on debates within China over such key issues as the choice of a management system, the choice between balanced and unbalanced growth, and between various patterns of income distribution. They deal with institutional mechanisms recently established to attract foreign technology and capital and to encourage a more flexible Chinese response to increased inter- dependence with capitalist economies. Based on a variety of published sources and on extensive interviews conducted in China, this book is an important contribution to the growing body of literature on the Chinese economy and will prove a valuable reference for foreign exporters, investors, policy makers and China specialists.


The open door policy that has evolved in China over the past several years is one of the most significant policy changes that has occurred since 1949. the political ramifications of this new policy, both internationally and domestically, form a complex and fascinating topic of inquiry in their own right. the focus of this monograph, however, is on the economic facets of the Open Door. Whenever possible, we have tried to offer quantitative measures of the changes that have occurred, but it must be noted at the outset that the qualitative changes that have taken place (in attitudes and in institutions) are at least equally important.

The essence of the Open Door is a quest for accelerated economic development through the adaptation and diffusion of foreign technology. a strategy of importing technology -- en capitalist technology -- is not new in China, however. What distinguishes the Open Door from the earlier waves of technology import since 1949 is the recent willingness to use foreign capital as well as foreign technology. This explains why the open door policy is also referred to as "special trade" -- thereby distinguishing it from the arm's-length transactions that characterized earlier dealings with the West. Even in the period of the Open Door, a substantial amount of technology transfer has occurred by means of these more traditional arm's-length mechanisms, and the importance of these transactions should not be underestimated, but the discussion in this monograph focuses on the innovations that collectively are called "special trade."

Generally speaking, our discussion takes account of developments up to October 1983. the discussion of equity joint ventures in Chapter 4 analyses the environment that existed from I July 1979 to 30 June 1983. in August and September 1983, the Chinese changed this environment in some minor ways; these changes are described in Chapter 7. Thus, Chapter 7 should be read in conjunction with Chapter 4.

In part, this monograph is based on a variety of published sources, as indicated in the footnotes and bibliography. More importantly, however, this monograph derives from an extensive series of interviews, most of which were conducted in China during May-July 1982. We recognize all too well the dangers of generalizing from a small number of examples, but we hope that our readers will find these case studies as interesting and illuminating as we did. During our trip we were the guests of the Chinese Academy of Social Sciences (CASS), and we benefited . . .

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