Policy Making and Political Economy Flashcards
What are the 10 most important facts to know concerning China’s one child policy ?
- Motive and Rationale: The policy was introduced to curb China’s rapid population growth, which was seen as a threat to the country’s economic development and resource sustainability.
- Limitation on Childbirth: Under the policy, most urban couples were restricted to having only one child. Rural couples were allowed to have a second child if their first child was a girl or if they were part of an ethnic minority.
- Enforcement and Penalties: The policy was enforced through a system of permits, and couples who violated the policy faced fines, loss of government benefits, and, in some cases, forced abortions or sterilizations.
- Exceptions and Variations: There were variations in the implementation of the policy across different regions of China. Some provinces had more relaxed rules, while others had stricter enforcement.
- Demographic Consequences: The policy led to a significant demographic shift, resulting in an aging population and a gender imbalance, as families preferred having male children. This has had long-term implications for China’s economy and social structure.
- Social and Psychological Impact: The policy had profound social and psychological effects on Chinese society. It altered traditional family structures, led to a generation of “only children,” and influenced cultural attitudes towards family and children.
- Relaxation and Reform: In the early 2010s, China began to relax the One Child Policy, allowing couples where at least one parent was an only child to have a second child. In 2016, the policy was officially replaced with a Two Child Policy.
- Implementation Challenges: The policy faced challenges in its implementation, including issues of corruption, forced sterilizations, and difficulties in accurately tracking the population.
- Legacy and Long-Term Effects: The long-term effects of the policy continue to be felt in China, with an aging population and a smaller workforce to support retirees. The government has since implemented policies to encourage childbirth.
- Global Significance: China’s One Child Policy remains a significant case study in population control and demographic policy. It has influenced discussions on population growth and policy implementation worldwide.
What are the 10 most important points from the “China’s Political Economy” reading by Arthur R. Kroeber ?
- Socialism with Chinese Characteristics (SWCC): Kroeber acknowledges SWCC as the guiding principle of China’s economic development. He emphasizes how this approach combines socialist ideology with pragmatic economic policies, allowing for both state intervention and market forces to coexist.
- State-Owned Enterprises (SOEs): Kroeber recognizes the pivotal role of SOEs in China’s political economy. He emphasizes that while they have undergone reforms to become more market-oriented, they still play a crucial role in key industries and remain an essential tool for the government to implement its policies.
- Market Socialism: Kroeber’s analysis aligns with the idea of China practicing market socialism. He underscores that while market forces play a significant role, the state maintains control over strategic sectors and continues to exert influence on economic outcomes.
- Dual-Track Pricing System: Kroeber discusses how China’s dual-track pricing system has evolved over time. He points out that it has been a means for the government to balance economic efficiency with social stability, particularly in sensitive sectors like energy and agriculture.
- Reform and Opening Up: Kroeber places great importance on the Reform and Opening Up policy. He highlights how this initiative transformed China from a centrally planned economy to a more market-oriented one, unleashing rapid economic growth and enabling China to become a global economic powerhouse.
- Huawei and Technonationalism: Kroeber acknowledges the rise of companies like Huawei as part of China’s broader strategy to promote domestic champions in critical industries. He explores how technonationalism serves as a driving force behind China’s push for self-reliance and technological innovation.
- One Belt, One Road Initiative (OBOR): Kroeber provides nuanced insights into the OBOR initiative, emphasizing its potential to reshape regional and global economic dynamics. He analyzes how OBOR reflects China’s ambition to enhance connectivity, trade, and geopolitical influence.
- Financial Repression: Kroeber delves into China’s financial repression policies, emphasizing their role in maintaining stability and managing risks. He discusses how the government’s control over the financial sector is a deliberate choice to mitigate potential financial vulnerabilities.
- Shadow Banking: Kroeber examines the role of shadow banking in China’s financial landscape. He highlights how it has been both a source of credit expansion and a concern for financial stability, offering a balanced perspective on its impact.
- State-Led Industrial Policy: Kroeber provides a comprehensive analysis of China’s state-led industrial policies. He assesses how initiatives like “Made in China 2025” fit into the broader framework of China’s economic development goals and their implications for global competition.
What is the first factor that explains China’s rapid economic growth ?
The East-Asian economic model (followed by Japan, South Korea, and Taiwan)
Through exportation, heavy state involvement and exchanges between public and private realm, China can uphold this quick development rate.
Another characteristic of this model is the highly educated workforce (almost 100% literacy rate)
however, labour rights and forming independent labour unions are heavily repressed, stripping them of autonomy - long hours, low benefits.
What is the second factor that explains China’s rapid economic growth ?
post communist transition
allow the markets to do more by loosening control
The strategy of having low economic control, but high political control.
Helps the state avoid distancing from the party, avoiding the fate of the USSR for example.
low wages in 1970s China gave them comparative advantage of labour costs to produce goods for a global market
What is the third factor that explains China’s rapid economic growth ?
China’s political structure.
centralised authoritarian party on top
+ Local authorities can experiment with lots of autonomy for economic policy makers. = guide the economy to state goals without micromanagement and inefficiency
lack of property rights - This allows for infrastructure such as highway to be built, though it also lacks systems to protect private property.
What is the fourth factor that explains China’s rapid economic growth ?
demographics
Through its baby boom (1960s) and then population control measure (one child policy) (1975-2015) China was able to maximize workers and minimize dependants.
However, now there is a downward pressure on growth, there is not enough youth to work and care for the aging population. The state has begun encouraging people to have more children.
What is the fifth factor that explains China’s rapid economic growth ?
Geographic location and luck.
China located in a neighbourhood of high growth rates and investors.
China opened its markets when the supply logistics changed world wide - cheaper to build parts for things in other places (ie China) - partially luck on their part (right time, right place)
Explain the basics of the Chinese institutional set up.
party sits on top of government to guide economic activity broader goals at top more specific at the bottom
bureaucracy is an important basic structure - works to implement state goals
- pay structure and incentives were aligned with achieving economic growth
- vested interest in spurring economic growth
- people are incentivised to work as salaries can be topped up accordingly
Indeed, provinces and below do not have any flexibility concerning tax policies, meaning they must find a different way to generate revenue.
Most of the companies are state owned (60 % of GBP and 80 % of the workforce) - the Chinese state owns 5 of the 25 most successful companies in the world.
The state also developed infrastructures to support these businesses and companies : state owned banks, give out loans (instead of having the companies turn to a private investor or stock market)
What is the process of the government to allocate funds and support the development of industries ?
The party’s central committee 5 year plan comes into play. The terms are quite vague, but get more specific as it trickles down the hierarchy (at the provincial or local level for example)
Then there are more details, though they still reflect the national plan. Through this the party decides what to prioritize and how to prioritize it.
how do privately owned companies play a role in the structure of economy while also working with the state?
play a massive role
privately owned companies account for 60% of GDP and 80% of employment in China
state also maintains lots of control over strategically important aspects
- 1990s policy of ‘grasping the large, letting go of the small’ (state owned enterprise reform)
- smaller enterprises were privatised, bigger strategically enterprises are state owned (oils, telecoms, banks, defence) - gain ownerships of commanding heights of the economy (maintain control)
- state owned assets supervision and administration commission - manage businesses and fund state projects
how are the state and party intertwined?
the state and party are intertwined with each other, wearing two hats - important state officials are party members
national advisory commission - new anti corruption body for the state
party body called central commission for discipline
supreme courts judges are selected by party
How does the National Security Commisson work ?
The National Security Commission also participates : this process in non-democratic, but takes feedback from within the system (lobbying the system)
State council who sits on top of the ministries and the National Peoples Congress pass the required legislation (no law has ever been voted down)
Members meet with state owned entreprises and other organs and make decisions concerning the content of the plan.
Public consultation for urban planning for example is taken into account.
Explore the concept of experimentation and what it means for Chinese economic development.
distinct feature of policy making in China
The party will try policies out in smaller areas before applying it to a national level.
- less labour mobilisation post Mao so more of a technocratic element (expertise based decision making)
-stylised cycle of policy experimentation - experiment, review, improve, roll out
This is what Deng Xiaoping did with the “liberal” and economic strategies in coastal cities during the 1980s.
showcases decentralised flexibility of policy making - (chinese paradox - centralised political system but lots of autonomy on local level for innovation)
explain the five year plans and their planning process
5 year plans - a series of social and economic development initiatives issued by the CCP (outline goals for 5 years)
the party central committee sets the planning agenda and the state implement those priorities (broad terms - reduce poverty eg)
then, the national development and reform commission fleshes out the plan by consulting variety of state and party actors
plan goes to leader of state council -> the party -> released to subnational bodies -> lobbying from key actors-> finalised and released to Xinhua media and party officials
policy plans require lots of input - ensures performance legitimacy - important cause the parties legitimacy is based on providing the public goods and services
- no democratic influence from citizen votes, but internal feedback from party committees
also lobbying from outside the political system - interest groups attempt personal influence
- the less political the more public consultation on policy (varies locally)
What does the current five-year plan look like ?
context - US China trade war (2018) increased external scepticism of China’s intentions by the west - stalled EU - Chinese investment talks
1 - dual circulation - Domestically oriented - reduces the reliance on foreign technologies and products, emphasises domestically oriented economy
2 - Prioritizes digitalization
3 - disregards sustainability and welfare services
