The Chinese Economy in the 1990s

212 Pages·2000·3.233 MB·English

by  Jun Ma (auth.)

Studies on the Chinese Economy
General Editors: Peter Nolan, Sinyi Professor of Chinese Management, Judge
Institute of Management Studies, University of Cambridge, and Fellow of Jesus
College, Cambridge, England; and Dong Fureng, Professor, Chinese Academy of
Social Sciences, Beijing, China
This series analyses issues in China’s current economic development, and sheds
light upon that process by examining China’s economic history. It contains a
wide range of books on the Chinese economy, past and present, and includes
not only studies written by leading Western authorities but also translations of
the most important works on the Chinese economy produced within China. It
intends to make a major contribution towards understanding this immensely
important part of the world economy.
Titles include:
Thomas Chan, Noel Tracy and Zhu Wenhui
CHINA’S EXPORT MIRACLE
Xu Dixin and Wu Chengming (editors)
CHINESE CAPITALISM, 1522–1840
Christopher Findlay and Andrew Watson (editors)
FOOD SECURITY AND ECONOMIC REFORM
Samuel P. S. Ho and Y. Y. Kueh
SUSTAINABLE ECONOMIC DEVELOPMENT IN SOUTH CHINA
Kali P. Kalirajan and Yanrui Wu (editors)
PRODUCTIVITY AND GROWTH IN CHINESE AGRICULTURE
Bozhong Li
AGRICULTURAL DEVELOPMENT IN JIANGNAN, 1620–1850
Alfred H. Y. Lin
THE RURAL ECONOMY OF GUANGDONG, 1870–1937
Dic Lo
MARKET AND INSTITUTIONAL REGULATION IN CHINESE
INDUSTRIALIZATION
Jun Ma
THE CHINESE ECONOMY IN THE 1990S
Guo Rongxing
HOW THE CHINESE ECONOMY WORKS
Sally Sargeson
REWORKING CHINA’S PROLETARIAT
Ng Sek Hong and Malcolm Warner
CHINA’S TRADE UNIONS AND MANAGEMENT
Michael Twohey
AUTHORITY AND WELFARE IN CHINA
Wang Xiao-qiang
CHINA’S PRICE AND ENTERPRISE REFORM
Xiaoping Xu
CHINA’S FINANCIAL SYSTEM UNDER TRANSITION
Yanni Yan
INTERNATIONAL JOINT VENTURES IN CHINA
Wei-Wei Zhang
TRANSFORMING CHINA
Xiao-guang Zhang
CHINA’S TRADE PATTERNS AND INTERNATIONAL COMPARATIVE
ADVANTAGE
Studies on the Chinese Economy
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The Chinese Economy
in the 1990s
Jun Ma
Economist
International Monetary Fund
Washington, DC
First published in Great Britain 2000 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
Acatalogue record for this book is available from the British Library.
ISBN 978-1-349-41242-6 ISBN 978-0-230-28831-7 (eBook)
DOI 10.1057/9780230288317
First published in the United States of America 2000 by
ST. MARTIN’S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
Library of Congress Cataloging-in-Publication Data
Ma, Jun, 1964–
The Chinese economy in the 1990s / Jun Ma.
p. cm. — (Studies on the Chinese economy)
Includes bibliographical references and index.
1. China—Economic conditions—1976– I. Title. II. Series.
HC427.92.M323 1999
330.951'059—dc21 99–23358
CIP
©Jun Ma 2000
Softcover reprint of the hardcover 1st edition 2000 978-0-333-75134-3
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with written
permission or in accordance with the provisions of the Copyright, Designs and Patents Act
1988, or under the terms of any licence permitting limited copying issued by the Copyright
Licensing Agency, 90 Tottenham Court Road, London W1P0LP.
Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The author has asserted his right to be identified as the author of this work in accordance with
the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and sustained
forest sources.
10 9 8 7 6 5 4 3 2 1
09 08 07 06 05 04 03 02 01 00
To Ching and Albert
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Contents
List of Tables x
Acknowledgements xi
List of Abbreviations xiii
1 Introduction and Overview 1
Growth Performance and Changes in Economic Structure 2
Key Factors Contributing to China’s Growth Performance 4
Challenges to China’s Future Development 8
Organization of This Book 11
2 Fiscal Reform 15
Tax Reform 15
Expenditure Management 21
Central–Local Fiscal Relations 23
Social Security Reform 28
Remaining Problems 30
The Japanese Experience and the Reform of China’s
Central–Local Fiscal Relations 31
Local Borrowing 39
Conclusions 41
3 Monetary Reform 42
Introduction 42
Monetary Management before 1994 43
Monetary Reform during 1994–96 44
Monetary Reform since 1997 47
China’s Inflation Experience in the 1990s 49
Future Reforms 55
4 Banking Reform: From Administrative
Control to a Regulatory Framework 58
Introduction 58
Institutional Changes of China’s Banking System 59
From Liberalization to a Regulatory Framework 62
Conclusion 72
vii
viii Contents
5 Development of the Stock Markets 73
Introduction 73
A Brief History of China’s Stock Market Development 75
The Primary Market 78
The Secondary Market 80
The Regulatory Framework 83
Market Fluctuation 86
Issues and Prospects 87
6 State-owned Enterprise Reform 92
Introduction 92
SOE Reform from 1978 to the Early 1990s 94
The Shareholding Experiment and Modern
Enterprise System 96
A New Framework for SOE Reform 102
Conclusions 112
Appendix 6.1 TVEs and a Comparison with SOEs 114
7 Export Promotion Strategies 117
Introduction 117
China’s Trade Performance and Trade Policy 118
The Case of Guangdong: the Fastest Growing
Region in China 126
Concluding Remarks 132
8 Regional Policy under the Strategy
of Economic Opening 134
Introduction: Regional Policy in China 134
SEZs 136
14 Open Coastal Cities 138
Hainan Special Economic Zone 139
Pudong New Area 142
Inland Provinces 143
Industrial-tilt Policy versus Regional-tilt Policy 145
Extending Open Door Policy to Inland Areas 146
Levelling the Playing Field: Policy Changes since 1996 149
Concluding Remarks 150
9 Decentralization and Provinces’ Growth Performance 152
Introduction 152
Fiscal Decentralization 152
Contents ix
Evolution of Ownership Structure 156
Trade and Foreign Investment 159
Determinants of Provinces’ Growth Performance 164
Conclusions 171
Notes 174
Bibliography 183
Index 193