STUDENT NOTES CHINA 4

1. STUDENT NOTES CHINA 4

2. V. Political Economy and Development • China is noted for its impressive strides in economic growth and in improving the lives of its citizens since the revolution and especially since the market reforms of the 1970s. • During Mao Zedong’s rules, immediately following the revolution of 1949, China was a command economy, with most productive assets controlled by the state • Deng Xiaoping unleashed a series of economic reforms beginning in 1979, which gradually reduced the role of government, introduced profit motive, prices set by supply and demand, a degree is decentralization • LEGITIMACY: Communist Party believes continued strong economic performance will buy it legitimacy and keep citizens out of national politics.

4. V. Political Economy and Development • Socialist Market Economy - mix of state control (socialism) and market forces (capitalism) that China is now following in its quest for economic development. The implication is that socialism will promote equality, while the market (especially the profit motive) will encourage people to work hard and foreign companies to invest • Household Responsibility System • Replaced communes • After paying taxes/contract fees to govt, families may consume/sell what they produce • More Economic Liberalization • Special Economic Zones (SEZs) • Promote foreign investment • regions in which foreign investors were given preferential tax rates and other incentives • Township and Village Enterprises (TVEs)

5. V. Political Economy and Development • Economic Success: • Fastest-growing major economy in the world for more than two decades • GDP per capita grew at avg rate of a little over 9% per year from 1990-2009 • Economic Problems: • No more “iron rice bowl” – cradle to grave benefits • Unemployment • Inequality • Private entrepreneurship allowed; no longer provides universal health care or guaranteed employment; disparity between the haves and have-nots. • Floating Population – urban migration

6. V. Political Economy and Development • Economic reform changed social welfare system. • Iron rice bowl—provided guarantees of lifetime employment, income, and basic cradle-to-grave benefits to most urban and rural workers. • Breaking of iron rice bowl • Reformers believed that such guarantees were costly and poor motivators and so income and employment are no longer guaranteed. • Public health system, once a model, now in shambles

7. V. Political Economy and Development • Market reforms opened cities to rural immigrants • MASSIVE URBANIZATION MOVEMENT • Floating population of migrant workers is filling important role but burdening housing and social services. • Market reforms and economic boom created inequalities between urban and rural areas.

8. V. Political Economy and Development • The ultimate goal of the government’s modernization plan is to fully integrate 70 percent of the country’s population, or roughly 900 million people, into city living by 2025 • GOAL: move away from export driven economy and more toward domestic demand

11. VI. PUBLIC POLICY • Political corruption, rural unrest, a growing wealth gap, and severe pollution—all related to economic successes of last 20 years • Chinese leaders agree to be judged on their ability to foster economic growth and deliver a better material life for citizens. • Social safety net gone • “iron rice bowl” gone • Full employment is no longer guaranteed • China is member of WTO, which encourages capitalistic reforms • “some get rich first”, current government policy • wealth is becoming more visible • Corruption is pervasive, public health poor, no social security system. • Villagers rise up against abuses of power

12. VI. PUBLIC POLICY • Environmental Degradation • Economic growth = serious environmental damage • Water and air pollution, urban sprawl, land contamination • Health and productivity costs • “first development, then environment” • Low regulation teamed with expansion of industry • EPBs local environmental protection bureaus • State Environmental Protection Agency (SEPA) • Underfunded

13. VI. PUBLIC POLICY • While economic liberalization has taken place, the government has firmly suppressed organized challenges to the Communist Party • Handful of leaders at the top monopolize the authority to choose what inputs from what groups are acceptable • The rules of the game are not transparent • Hong Kong—clashes over western oriented population who have enjoyed political rights • Taiwan—political unification • Non-Han minorities, such as the Tibetans, challenge Chinese nationalism

14. VI. PUBLIC POLICY • Population Control • Little regulation during Maoist years; 1978 population close to a billion • One-child family policy • State-sponsored family planning added to the constitution • Ideal family had one child • Most couples required to stop childbearing after one or two births • Married couples in urban areas restricted to one child • In rural areas, married couples are subject to rules that differ across provinces. In some, two children permitted. In others, only one child permitted; in most provinces, a second child is permitted only if the first is a girl. • Difficult to implement; many sons ideal: a married daughter joins the household of her husband, while a married son remains in the household to support aging parents. • Perverse outcomes • Shortage of girls • Sex-selective abortions

15. VI. PUBLIC POLICY • One-child policy • Positive incentive: More farmland or preferred housing for one-child households • Negative: Fines and loss of jobs; forced abortion, sterilization, female infanticide and abandonment of female babies (to make sure their one child is a son and heir) • 120:100 males to females

16. II. SOVEREIGNTY, AUTHORITY & POWER • Discussion Question: Classify the following as ideas under Mao Zedong (MZ) or Deng Xiaoping (DX) or Both (B): • Allowed foreign investment • Iron Rice Bowl • Communes • Open Door trade policy • Education limited to elementary school • No private property allowed • Household Responsibility System • Egalitarianism pursued • Market socialism • Believed Communist Party leadership should not be challenged

17. Hong Kong • 1842 and 1860, the island of Hong Kong, and adjacent territory on the Chinese mainland, were ceded by treaty to the British in perpetuity. • Due to result of wars fought to impose trade on China • For nearly a century, China was a British colony. • 1984, the Chinese communist authorities elaborated the principle of “one country, two systems” applicable to Hong Kong after 1997 • Hong Kong reverted to Chinese sovereignty in 1997 but would continue to enjoy a “high degree of autonomy.” • Chinese authorities hope the outcome will woo Taiwan back to the PRC, too.

18. Taiwan • Governed by the Nationalists as the Republic of China since 1945 • 100 miles off the east coast of the Chinese mainland. • Communist “liberation” of Taiwan • Korean war; American interests in the security of Taiwan • Two major events affected Taiwan’s status • Lost its membership in the U.N. and its seat on the Security Council to China in 1971 • U.S. recognized China diplomatically, downgrading the relationship with Taiwan to one of unofficial liaison • Today fewer than 30 countries recognize Taiwan. • Taiwan’s public does not support unification.