Socialist Markets or Free Markets? The Changing Political Economy of China
Joel Campbell, Miyazaki International College
1990s have brought about a restructuring of the international political
economy, and globalization of production and finance determine both
economic choices and political alliances. China's recent quasi-capitalist economic development, one of the
most important contemporary cases of transition from state-led to
capitalist economies, illustrates the promise and pitfalls of developing
nations joining the world economic system; it also demands a balanced
examination of both the
development of domestic industries, and growth of international ties.
The proposed panel will analyze the current political economy of
China. Campbell, as
chair, will seek to stimulate audience participation in the panel by
beginning the session with a brief paper that lays out key political
economic issues that need to be addressed by Chinese leadership. Other paper presenters will address two key aspects of
emerging political economy: contradictions
within China's "socialist market economy," and the political
conflicts and constraints that hinder economic growth. First, Hashida will take up the
political and economic aspects of China's recent industrial
growth, focusing on development of the high tech industries. Asano will compare the political and economic management problems
of China and Taiwan. Islamov
will introduce the nascent trade relations between China and the nations
in transition in Central Asia. Then,
Hsu will examine China's developmental problems in the context of
central-local conflicts over taxation, and the implications for future
considers the beginnings of a welfare state in Taiwan. Finally, Warries will discuss general themes among the papers (in
line with the lead-in paper), and ask both the audience and panelists to
comment on those themes. Campbell
will reserve one-quarter of the panel time for audience questions and
Joel Campbell, Miyazaki International College:
"The Dragon Shudders:
Political Economic Issues Facing China on the End of the Century"
China's major political economic issues today are inter-linked. They include the following: 1) inflation and macroeconomic management, which will be shaped by 2) restructuring of state-owned enterprises (SOEs), and related to this, 3) growing unemployment, which touches on 4) increasing urbanization and the floating poor, which makes worse 5) air and water pollution, and other environmental problems, which threaten 6) foreign investment, which depend on 7) the legal system and protection of intellectual property rights, which is determined by 8) the authoritarian economic and political decision making process. Politics and economics combine in China in a way that is nearly inconceivable in Western countries or Japan. China's future economic viability will depend on its management of this political Gordian knot, and its ability to manage simultaneous domestic and international pressures for greater liberalization and democratization, while maintaining a developmentally-oriented authoritarian socialist state.
Hashida Tan, Tokyo International University:
"No Flash in the Pan:
Political Economy of China's High Tech Industries"
study focuses on the development of China's high tech industries. These industries abandoned their self-reliant development in the
1980s, and aggressively pushed technological upgrading, based on
inducement of foreign technology, combined with use of local capital and
brainpower. While many
Western companies have established high tech manufacturing joint ventures
in China, the Japanese have been more cautious. Many major Japanese high tech companies were exporting
products to China, they were choosy about investments and transfers of
technology, since they perceived China's as not sufficiently developed
to become functional adjuncts to Japanese high tech industries. Thus, Chinese producers had to turn to Western producers for
know-how or technologies, or to develop new technologies on their own.
This paper examines the different uses of the high tech industries
as tools of national policy by the Chinese state, and their contribution
to China's technological and industrial development, based on data
concerning production, investment and patents. It also addresses the role of international players, and assesses
the consequences of high tech industrialization for national and regional
development. Like many new
industries, the high tech industries have made major inroads in Guangdong,
Shanghai, Manchuria, and other fast-growth areas. Understanding of these important industries yields a clearer
picture of China's current and future growth patterns.
Bakhtior Islamov, Hitotsubashi University / Tashkent University: "The Ties that Bind: The
Development of Economic Relations between China and the Newly-independent
States of Central Asia"
growth is steadily linking China with the newly-independent states of
Central Asia. Asian nations' share of trade and foreign investment in the region has grown
rapidly, and (along with Japanese, Korean and other Asian firms), Chinese
companies are taking advantage of the many business opportunities in the
area. These include natural
resources development, commodity trade, tourism, and cultural exchanges. Cross-border trade (most notably at Kashgar) has grown
significantly, especially through an extensive railroad network, which
brings Chinese ports much closer than Russian or Turkish counterparts to
landlocked Central Asian traders, and allows creation of a modern "Silk
Road" across the Asian land bridge, from China to Turkey. Establishment of direct air links and building of better transport
facilities on both sides of the China border, along with projected plans
for oil and gas pipelines from Kazakhstan to the east coast of Asia, will
also bind China and Central Asia together.
While relations between China and Central Asia have generally been
cordial, potential problems also need to be dealt with:
possible joint development of cross-border resources, common
economic development issues on both sides of the China border, latent
geopolitical conflicts in Central Asia, and Uighur minority issues in
Xinjiang. This paper measures
the degree of economic integration between China and the five Central
Asian republics, and suggests possible future directions for development
of economic and political relations. It also compares China-Central Asia trade to Chinese trade with
Philip Hsu, National Chengchi University (Taiwan): "Local
States and Fiscal Extraction: A
New View of Central-Local Relations in Contemporary China"
Key changes in China's central-local relations in the 1990s have unfolded quite differently from the seemingly unidirectional course of the 1980s. Except for the ephemeral post-Tiananmen recentralization backlash, the entire period of the 1980s was marked by increasing decentralization of both power and resources from the center to the sub-national party-state apparatus, and this went hand-in-hand with the overall reform process. In the second decade of China's reform era, however, such decentralization has bifurcated. On the one hand, local states have continued acquiring greater decision-making powers during successive rounds of reform initiatives, such as the landmark1992 package, in the wake of the 14th Party Congress, and the simultaneous restructuring of foreign trade and banking systems in 1994. On the other hand, recentralization has taken place in the fiscal area. The central state has taken decisive actions to capture a greater share of fiscal revenues—a key economic resource—at the cost of local states' fiscal claims; this was clearly evident in the 1994 Tax Assignment (fenshuizhi) Reform.
To be sure, such complexity had been obscured by the uniformity of
changes in resources and power during the 1980s. The new reality of bifurcation shows that the undifferentiated
conceptualization of decentralization as a one-dimensional process in the
post-Mao China misses its multifarious characteristics. Analytic emphasis has been placed upon central-local resource
allocation and distribution, particularly in fiscal management. The arguments of this fiscal approach revolve around the
rationales, processes, and consequences of adjustments in central-local
fiscal relations. Positing
that the center's loss of fiscal resources to localities leads to its
waning control over a wide variety of policy issues, this approach seeks
to link restructuring in
arrangements for distributing fiscal revenues between the center and
localities to the change in overall relative power between the two. To the extent that the fiscal dimension played an unprecedented key
role in decentralization during the 1980s, this approach deserves a
greater analytic attention.
Chen-Wei Lin, University of Tokyo "Building a Welfare State: The
Politics of Social Security in Taiwan"
examination of the politics of social security in Taiwan, this paper is a
first step in achieving two objectives. One is to provide an alternative approach to the concept of
state-society relations in Taiwan. The
other is to contribute to ongoing welfare state debates. Although social security schemes in Taiwan were initially at best
minor instruments of political co-optation, they began to take hold with
the KMT's Taiwanization efforts. Analysis
of Taiwan's social security schemes reveals a complex process in which
institutions and societal forces also served as determinants in shaping
relevant policies. This
differs from the discussions in the existing "developmental state"
literature, in which state actors simply dominate.
This state-initiated, but society-captured process also
demonstrates the possibility of a different path to the welfare state. Rather than assessing the relative strength of social democrats and
labor, vs. the conservative coalition, the conservative welfare state of
Taiwan was brought about by a socially-embedded state and a partially
fragmented structure of interest aggregation.
Warries, Kitakyushu University