# Table A2.3. Chronology of Economic Reforms in China

|Trade and i<br>"Opening up|nvestment r<br>" (very su|eforms<br>ccessful)|Fiscal decentraliza<br>with mixed results|tion and<br>)|tax reform|s (on-going|
|---|---|---|---|---|---|---|
|continued<br>opening up, both<br>export and import<br>increase|decentralize<br>export<br>rights.<br>experiment<br>on SEZs and<br>open cities|Opening to<br>foreign<br>investment, FDI<br>soared,<br>technology has<br>been flowing in.|"Revenue<br>Revenue<br>sharing"<br>sharing syst<br>system<br>were revised<br>experiment<br>and made<br>ed since<br>national in<br>1980<br>1988|Problems<br>em<br>with<br> <br>declining<br>revenue<br>/GDPrat|<br>Tax and e<br>system im<br> <br>1994. pen<br>and imple<br>io|xpenditure assignment<br>plemented since<br>sion reforms designed<br>mented partially.|
||Price and|exchange rat|e reforms: (succes|sful)|||
|Raising prices<br>for agricultural<br>products|Prices were allo<br>many products i<br>quota.<br>Dual exchange r|wed to float for<br>n excess of planned<br>ate allowed|The scope of plan has<br> <br>been reduced gradually<br> <br>Foreign exchange swap<br> <br>markets allowed<br> <br>|Exchange<br>rates were<br>merged at<br>the market<br>by 1/1/94|90% of<br> <br>prices<br><br>liberalized<br> <br>|Current account<br>convertibility<br>achieved smoothly in<br>Dec 1996|
|Rural reform|s (success|ful)|Reforms of SOEs|(slow and|unfinishe|d)|
|Local<br>experiments on<br>rural household<br>responsibility<br>system (HRS)|Experiments<br>with HRS<br>successful.<br>Implemented<br>to the whole<br>nation|Benefit the poor<br>greatly and<br>reinforce the<br>determination<br>for reforms|Experiments on<br>Bankr<br>managerial<br>passe<br>responsibility<br>starte<br>systems with<br>cases<br>some efficiency<br>gains|uptcy law<br>d and<br>d. 100+<br>each year|More bankruptc<br>in1996). more m<br>acquisitions, ex<br>corporatization<br>privatization. 1<br>workers were m|ies (6.232 cases<br>ergers and<br>periments on sales,<br>and small<br>2 million state<br>ade redundant.|
||||Reform of Bankin<br>capital markets (s|g systems<br>low and u|, and deve<br>nfinished)|lopment of|
||||Corporatization<br>Two<br>started. foreign<br>stock<br>advice sought<br>exchan-<br>on both<br>ges<br>banking and<br>opened<br>capital market|More<br>regulatio-ns<br>passed;<br>more<br>companies<br>listed on<br>stock<br>exchanges<br>(800+ by<br>1998)|Leaming and<br>training on<br>open market<br>operations.<br>Laws on<br>banking<br>passed.<br>Some state<br>banks are<br>insolvent.|<br>Central bank<br>started open<br>market operations.<br>Some foreign<br>banks allowed to<br>conduct RMB<br>business.<br>Competition was<br>introduced. But<br>some state banks<br>remain insolvent.|
|1978|1980|1983|1984--<br>1990|1993|1995|1996-present|

## **References:**

Lin, Justin Yifu, Fang Cai and Zhou Li, 1996. The China Miracle: Development Strategy and Economic reform. The University of Hong Kong.

Ma, Jun. 1996. Intergovernmental Relations and Economic Management in China. MacMillan.

World Bank. China 2020: Development Challenges in the New Century. The World Bank, Washington DC.

### World Bank. China: Country Brief.

Xu, Xiaonian, and Yan Wang, 1996. "Ownership Structure, Corporate Governance, and Corporate Performance, The case of Chinese Stock Companies." World Bank Policy Research Working Paper no. 1794. Washington, DC.

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