Tian, Guoqiang (1996): China's Economic Reform and Smooth Institutional Transition-A Three-Stage Economic Reform Method. Published in: In Search of A Chinese Road Towards Modernization (1996): pp. 22-46.
Download (1MB) | Preview
This paper addresses the methods of state-owned enterprises’ ownership reform and the smooth institutional transition of the economic system in China. By using the theory of endogenous ownership arrangements developed in Tian (1995), a three stage method of China’s economic reform will be provided. It will be shown that a smooth institutional transition to a market economy needs to go through three stages: (1) economic liberalization; (2) marketization; and (3) privatization. In the first stage, the entry and competition of enterprises of all kinds of ownership make the non-state owned sector of the economy develop quickly. In the second stage, competition among enterprises of all kinds of ownership, and the introduction and development of the market system lead to a reduction of state-owned enterprises. In the third stage, state-owned enterprises will face large scale bankruptcy and privatization. The first stage began with rural economic reform in China in 1979. The second stage began in 1992. The third stage has not begun and should not be expected to begin too soon. It is preferable that the third stage does not start taking place for about 5-10 years until the non-state owned economy has become a large proportion of the economy, say above 80 percent of GNP, and the social security network is almost completed.
|Item Type:||MPRA Paper|
|Original Title:||China's Economic Reform and Smooth Institutional Transition-A Three-Stage Economic Reform Method|
|Keywords:||Economic Reform; Smooth Institutional Transition; China|
|Subjects:||P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P21 - Planning, Coordination, and Reform|
|Depositing User:||Guoqiang Tian|
|Date Deposited:||15. Sep 2012 20:45|
|Last Modified:||19. Feb 2013 13:12|
A. Alchian and H. Demsetz, “The Production, Information Costs, and Economic Organization,” American Economic Review, 62 (1972), 777-795.
Blanchard, O. J., and Fischer, S., NBER Macroeconomics Annual, 1993, Cambridge: MIT Press, 1993.
R. H. Coase, “The Problem of Social Cost,” Journal of Law and Economics, 21 (1960), 1-44.
H. Demsetz, “Towards a Theory of Property Rights,” American Economic Review, 57(1972), 347-359.
E. G. Furubotn and S. Pejovich, “Introduction: The New Property Rights Literature,” In Erik G. Furubotn and Svetozar Pejovich, Eds. The Economics of Property Rights, Cambridge MA: Ballinger, 1974.
T. Groves and J. Ledyard, “Incentive Compatibility Since 1972,” Chapter 2 in: Information, Incentive, and Economic Mechanisms, ed. by T. Groves, R. Radner, and S. Reiter, (University of Minnesota Press), 1987.
L. Hurwicz, “On Informationally Decentralized Systems,” in Decision and Organization (Radner, R. and C. B. McGuire, Eds.), Volume in Honor of J. Marschak, North-Holland, 297-336, 1972.
L. Hurwicz, “On Informational Decentralization and Efficiency in Recourse Allocation Mechanism,” in Studies in Mathematical Economics, ed., by S. Reiter, Mathematical Association of America, 1986.
A. Hussain, “Social Security in Present-Day China and Its Reform,” The American Economic Review, 84 (1994), 276-280.
G. H. Jefferson and T. G. Rawski, “Enterprise Reform in Chinese Industry,” Journal of Economic Perspectives, 8 (1994), 47-70.
G. H. Jefferson, T. G. Rawski, and Y. Zheng, “Growth, Efficiency, and Convergence in China’s State and Collective Industry,” Economic Development and Cultural Change, 40(1992), 239-266.
J. S. Jordan, “The competitive Allocation Process in Informationally Efficient Uniquely,” Journal of Economic Theory, 28(1982), 1-18.
D. Perkins, “Completing China’s Move to the Market,” Journal of Economic Perspectives, 8(1994), 23-46.
T. G. Rawski, “Chinese Industrial Reform: Accomplishments, Prospects, and Implications,” The American Economic Review, 84(1994), 271-275.
G. Summerfield, “Economic Reform and the Employment of Chinese Women,” Journal of Economic Issues 28(1994), 715-732.