Modern China

"Economic Survey of China“(2005)
"Economic growth about 9.5 percent over 20 years and likely to continue at that pace for some time.“
China "represents one of the most balanced and rapid economic transformations seen in the world economy in the past 50 years”
YET state-owned companies "are in dire need of restructuring“
STILL "Further development of the capital markets will help to lower enterprise debt loads, reduce the exposure of the banking sector to commercial risks, and improve market discipline over business behavior"

How miracle works
Freedom of enterprise gives freedom of market
Lightly controlled open prices
Delegation of power
Focus on people
Co-existence of opposites
Cheap labor from rural sector

Paper dragon
Growing gap between rich and poor
Dependence from West
Focus on loss making state-enterprises
Little or no technological development
Growing demand for higher wages

China in 1980es. Economy
10% annual growth in light industry and agriculture
23% of agricultural output – rural industries
14 SEZ created

Economy. Industry and technology
In 1985 light industry occupied 17% of workforce yet its output to national economy was 46%
Most enterprises even though state controlled operated by local forces and taxes are paid to province rather then center
Rapid growth of townership enterprises

Economy. Industry and technology
New technology mainly assimilated
Own scientific research had low industry value until mid 80es
From 1986 great effort focused on connecting science and industry.

Economical planning
During 1980es state role in planning economy was slowly reducing
More impact on province and local authorities
Dual pricing was introduced in mid 1980es ( much alike as in perestroika’s russia)

Comparision to perestroika
Compare economical output? Why do you think its so different?
the initial stages of reform were planned so that there were only winners and no losers
The market economy was added to the pre-reform central economy rather than replacing it
the focus in China involved creation of new systems rather than the replacement of old
while allowing for economic reform, the Communist Party of China was intent on maintaining political control.

Social output
Poverty reduction – from 54% in mid 1970es to 6% in 2001
Wealth disparity - only 3.5% of the 1.3 billion people in China who earned more than ¥20,000 annually (approximately $2,500), while 50% of the 1.3 billion population earned less than ¥2,000 annually (approximately $250)
Inflation due to controlled prices

Politics
Unlike USSR PRC strongly maintained censorship and political control
Some chinese students was inspired by glasnost and political reforms in Eastern Europe

Protest movements
Students argued for speedy reforms pace
For more openness toward west, specifically western music
For less control from party officials

Tiananmen square protests of 1989
On 15th April 1989 some students gathered on main square to mourn death of right-wing reformist Hu Yaobang
In 3 days over 3000 people gathered in protest for more reform and political meltdown.
At the end of month number of protesters reached 100,000

Tiananmen square protests of 1989
Main demands – freedom of speech, reduced bureaucracy
During may, movement had spread nationwide. Protesters began hunger strikes.
20th of may marital law was conducted nationwide and on 3-4th of june protesters were dissolved using Army
We still can’t say number of victims – est. 1-5 000 dead and 15-25 000 injured