From: joe@astro.as.utexas.edu (Joe Wang)
Newsgroups: soc.culture.china,soc.culture.hongkong
Subject: Re: Fundamental problem of China (Was Re: after 1997...)
Date: 23 Jul 92 03:57:50 GMT
Followup-To: soc.culture.china,soc.culture.hongkong
Organization: McDonald Observatory, University of Texas @ Austin

In article <1992Jul21.031938.28689@oracle.us.oracle.com> kwee@oracle.uucp (Karl Wee) writes:
>Private citizens and groups tend to own "end user"
>types of products and services  [...]
>while the govt still owns the vast majority of the "utility" kinds of
>products and services [...]

Good point. 

>However, as for industries in which the govt holds a monopoly, I
>don't know if it has the political will or even the wish to get out. 

Even in the industries where the PRC pretty much owns a monopoly
(steel for example), it wants to get out.  The problem is that even
with a monopoly, the state-owned factories are so inefficient that the
factories are losing money.

There isn't a lot of political "will" to do this.  The problem, again,
is that the government would rather not deal with the prospect of
millions of angry unemployed workers.

>(Actually I suspect that "approvals" are an artificially created
>"necessary raw material" of production for the empowerment of officials.)

True.  The fact that you have to get dozens of approvals in India to do
any business is what has killed the economy there.

>By controlling certain key points in the economy, the CCP is still by and 
>large controlling and stifling it without looking like they're doing it.

On the other hand even the CCP is finding it difficult to try and
stifile the economy.  In late-1989, the Central Government tried to
roll back some of the economic reforms, ostensibly to control
inflation.  The provincial governors, led by Guangdong, practically
revolted at the idea of increasing state interference, and the central
government had to back down.

>I don't have good information about this, but sometimes I wonder if the 
>current "boom" of the economy is mostly created by speculations plus the
>growth of certain narrow segments before they reach another plateau due to
>being stifled by the govt.

The current "boom" in the economy of mainland China is due to real
growth as one can see by looking at the standard of living there and 
by the balance of trade with the United States.

>(Which was pretty good, don't get me wrong, but the economy can't hope to "fly"
>like the West did and like the "4 Tigers(Dragons?)" are doing.  There is a
>qualitative, not quantitative, difference in the kind of society and way
>of life that results.)

Two of the four tigers (Taiwan and South Korea) had heavy government
involvement in industry, including ownership by either the state
directly (as in Taiwan) or though control by a state-business elite
(South Korea).

So a mixed economy is not necessary incompatible with economic growth.

I'm a bit more optimistic that the CCP won't intentionally stifle the
economy than you seem to be.  The reason is that the CCP seems well
aware that its survival depends on a booming economy.  "Communist" is
just a name.  These people are just a bunch of old people who think
they know best what's good for China and who want to stay in power to
execute their program.

They've seen the Communist Party in the ex-Soviet Union and the KMT in
Taiwan.  They can figure out what they have to do to keep power.




Newsgroups: soc.culture.china