-----Original Message-----
From: Emma Holland, Centre for East Asian Studies [mailto:[log in to unmask]]
Sent: 05 January 2010 13:21
To: [log in to unmask]
Subject: CEAS Seminar 18th January 2010
CAN CHINA STABILISE IT'S ECONOMIC DEVELOPMENT?
by Professor Lina Song, Leverhulme Centre for Globalisation and Economic
Policy, University of Nottingham
Date: 18th January 2010
Time: 4.00pm-5.30pm
Venue: Drawing Room, Royal Fort House, University of Bristol, Tyndall Avenue
Map: <http://www.bris.ac.uk/university/maps/precinct.html> (building 30)
Synopsis:
Drawing from several empirical analyses of the latest available national
household surveys and enterprise surveys of China, I argue that the
economic policies the Chinese government adopted before and during the
current 'economic slow-down' are the products of political confusions. I
examine whether opportunities to meet challenges over present and future
economic problems are effectively acted upon.
It is true China is hit less seriously by this financial crisis. However
this should not be credited to the Government's 'good' economic policy
choices. To examine carefully, we find that this is actually due to China's
lesser degree of marketisation. This is to say, China has not been hit
badly simply because it has not yet grown into that phase. Therefore our
question is whether China should remain stunted or grow into the maturity
facing the challenges as a great nation.
Those who celebrate China's lucky escape tend to believe that China's
current State monopoly over the capital market has protected the economy
from exposure to danger and at the same time could promote healthy growth
without further marketisation. Through our analysis, we find the opposite
is true. The past decades' rapid growth is a mixed picture of State
mobilisation of resources with a door left ajar for market competition. The
current economic structure in terms of asset ownership and industrial
sectoral balance may not advance growth without the establishment of a full
market system. In particular, what is required is a full banking system
allowing private borrowing based on credit-worthiness; the creation of a
business environment which allows the private sector to grow; and a process
of urbanisation which encourages a large number of Chinese peasant workers
to be settled in urban centres.
China's State Sector is declining in terms of the size of employment but
has become a vigorous force for market monopoly. This has led to a more
powerful Party-State under which revenue does not effectively and
efficiently benefit the nation, and which is distributed without the
consensus of citizens. The financial constraints upon private firms,
identified in research on all China's large and medium size firms, has
indicated a bottleneck for a healthy development of the sector. Without
consistent fiscal policies allowing finance to go to private firms, the
private sector will not be able to smooth the economy during crisis, and
the large number of workers engaged in this sector will not be stabilised
during fluctuations in demand for their products. The short-term contracts
between private firms and their employees demonstrated a missing link
between workers' job security and safety nets.
If China is to go down the road of its market development, protectionism
over its core industries through State monopoly or oligopoly would not
work. More progressive economic policies should be considered, tried and
implemented. China needs a further open-door policy to welcome a market
system which promotes the private sector and allows it to compete with
their State counterparts at the level ground. Avoidance of crisis this time
does not indicate a permanent immunity from future troubles.
All Welcome.
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Felicity Gaskin
Centre for East Asian Studies
University of Bristol
Room 1.10, 4 Priory Road
Bristol BS8 1TY
T: +44 0117 3318008
Office hours: Mon 9.30-4.30, Tues & Wed 9.30-2.30
The University of Aberdeen is a charity registered in Scotland, No SC013683.
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