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ASCJ Executive Committee

Contact the organizers: Asian Studies Conference (ASCJ) c/o Institute of Asian Cultural Studies, International Christian University 3-10-2 Osawa, Mitaka-shi, Tokyo 181

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Summer 2000 ASCJ Conference Details

 21. Socialist Markets or Free Markets?  The Changing Political Economy of China

Chair and Organizer:  Joel Campbell, Miyazaki International College

 The 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 China's 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 development.  Lin 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 discussion.

 1)      Joel Campbell, Miyazaki International College:  "The Dragon Shudders:  Major 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.

 2)  Hashida Tan,  Tokyo International University:  "No Flash in the Pan:  The Political Economy of China's High Tech Industries"

 This 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.

 3)  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"

 Trade 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 other regions.

 4)  Szue-Chin 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.

 5)  Chen-Wei Lin, University of Tokyo "Building a Welfare State: The Politics of Social Security in Taiwan"

 Through 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.

Discussant:  Garth Warries, Kitakyushu University