Economic reform in China: Problems and future prospects

In 1978, C h i n a announced p l a n s -for econo m i c r e f o r m and open e d her door to the outer world.Today, ten ye a r s later, Ch i n a h a s e x p e r i e n c e d significant c h a n g e s in v a r i o u s areas under the w a v e s o f reform.T his paper introduces the Chinese model in a d e v e l o p i n g a "socialist economy."It briefly expl o r e s and a n a l y z e s the C h i n e s e model of a c entrally plan n e d economy, and the economic d e v e l o p m e n t f r o m 1949 to 1978.Then, the econo m i c ref o r m s s i n c e 1979, which include such internal and external environmental influences as the Cultural R e v o l u t i o n and the o p e n door policy, will be discussed.P r o g r e s s o f reform since 1979, w h i c h includes b u dg e t a r y devolution, r e f o r m o f the s t a t e economy, r e f o r m of the u r b a n c o l l e c t i v e and individual sector, as well as the c o m m u n e sector will b e explored.K e y p o i n t s of C h i n a 's economic a c h i e v e m e n t s since the e c o n o m i c r e f o r m of 1979 will b e d iscussed briefly.Finally, f u t u r e p r o s p e c t s for economic re f o r m are d i s c u s s e d in r e l a t i o n to the o b s t a c l e s to progress, since economic r e f o r m d e p e n d s o n the p r o g r e s s of political, social, and ideological reform.Con c e r n i n g the a b o v e issues, the paper r e v i e w s s o m e w o r k s by several economic exp e r t s o n China. 1 aspect in w h i c h C h i n a h a s b e e n less than a giant is e c o n o m i c .Another o b j e c t i v e of this paper * therefore? is to e x p l o r e the C h i n e s e model of e c o nomic d e v e l o p m e n t -a central plan n i n g system* which c a n in par t e x p l a i n the bac k w a r dness o f Chi n e s e economy.Ot&3&fcsar 1 1 tLS-ftcesraafauang BSggaigaa S i n c e 1978, w ith the o p e n door poli c y of China* m ore and m o r e W e s t e r n e c o n o m i c e x p e r t s h a v e s tarted to d i s c u s s the issues of the C h i n e s e eco n o m y and h a v e w r i t t e n a great m a n y articles and works.This c hapter r e v i e w s som e o f the c u r r e n t literature about the C h i n e s e economy.Peter Knight* a n economic expe r t f r o m the Wo r l d Bank*