The political economy of reforms and the present Chinese transition

ABSTRACT The main aim of this paper is to demonstrate, through a review of China’s economic reforms, that the emergence of a large private sector and the increased sophistication and diversification of industry has required the continual reorganization of activities between the state and private sectors of the economy. We argue in this paper that the state began to play a major role in important industries and in big finance, as well as in the coordination and socialization of investment, such as economic policy (monetary and fiscal), foreign trade and, especially, the launch of new and higher forms of economic planning.