1992 14 th party congress Deng criticises capitalism v socialism debate

1992 14 th party congress deng criticises capitalism

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Sept. 1992 – 14 th party congress Deng criticises capitalism v. socialism debate directing focus to “Carry[ing] out a reform so long as it is beneficial to the increase of social productivity, the country’s over-all strength, and the peoples’ living standards” Endorsement for “socialist market economy” = reform goal Nov. 1993 – The decision = Turning point Jiang Zemin worked with economics and finance leading group to prepare a strategy for transition to a market system Advances in areas of reform strategy, a rule-based system, building market- supporting institutions, property rights and ownership March 1999 – Constitutional Amendments Private ownership and the rule of law incorporated Major accomplishments in the first 5 years (1994-1998) - Series of reforms launched from Jan/1994 - Foreign Exchange reform o 1994 – liberalisation of foreign exchange markets followed a dual-track approach o 1994 – plan allocation of foreign exchange was completely abolished o Ability to convert currency for acquisition allowed China to weather AFC well o 1994-1998 – exchange rate = stable/appreciating, increase in foreign reserves - Tax and fiscal system reform o Jan 1994 – reform to bring tac and fiscal policy in line with international practices o National and local tax bureaus o 1995 – budget law prohibiting central govt. borrowing from central bank and deficit financing current expenditure, increase regulation on borrowing and bonds issued by regional governments - Monetary Reform o 1993 – CB centralised operations under Zhu Rongji (governor) o 1995 – Central bank had ability to control MP reduce local government independence and governments influence on MP and credit allocation decisions - Financial System Reform
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o AFC = prudential regulation o Commercial banking separate to investment banking, comm banks can’t hold shares, therefore 3 regulatory bodies governing; commercial banks, security firms and insurance companies o 1998 – multiple banks go bankrupt as government stop bailing them out discipline financial institutions - Government Reform o Reduce number of ministries in central government o Those who lost jobs in government were given somewhere to live and an undergraduate education - Privatisation and Restructuring of SOE’s o Layoffs and privatisation of SOE’s on large scale from 1995 o “grasping the large and releasing the small” – small SOE’s privatise o over 20million workers laid off in 1996 and 1997 from SOE’s alone Tracing the Roots: The evolution of the Chinese Planning System from 1958 to 1978 Official critiques of over-centralisation – 1957 - 1953 = 1 st 5 year plan - centred around projects - focus on industrialisation rather than on regions - mid-1950s = criticism over over-centralisation of planned economies re: incentives and efficiency - Mao focus on – mobilisation of people’s consciousness through political campaigns and decentralisation of government authority to local levels 1 st wave of administrative decentralisation – 1958 - Great Leap Forward called for high GDP growth -
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