China Under Reform - 1980's Flashcards
Impetus for Reform
By the time Mao died in 1976, socialist construction had achieved significant economic growth but…
Growth paled in comparison with the Japanese Miracle or the EA NICs
Growth barely kept up with population growth.
Who takes over effective control of the government?
Deng Xiaoping
What did Deng do first?
Arrest Mao’s wife
Where China started in 1978?
Factors:
World’s Largest population…
China was in no position to export raw material
Facing an enormous education gap
- high schools and colleges closed from 1966 -1969
- when they reopened they emphasized political edu
Culture
Had undergone almost 30 years of constant pressure from the state for change
Institutions
Chinese corporate forms
-SOEoften saddled with huge workforce and welfare obligations
What were some problems with SOE’s?
often saddled with huge workforce and welfare obligations
many remain a drag on the economy
enormous layoffs began in the 1990’s - end of the “iron rice bowl”
Who specifically was also in tremendous trouble?
Banks
by 1995, 25% of bank loans were non-performing.
What did the Chinese gov do in response?
Chinese gov injected capital and moved some toxic assets to separate entities - combined cost of almost 40 billion USD
Then what?
Eventually sold small pieces of the state banks to foreign banks
important to know
The chinese communist party had become the protector of China’s capital class
Chinese corporate forms
usually emerged from the administrative divisions of the SOE system.
little understood
Township and Village Enterprises (TVE’s)
Source of both dynamism and wasted investment
Joint-stock corporations
Relatively late on the stage
companies like Haier prove taht not all Chinese companies are small, family firms
continued problems with transparency
