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Case studies of Chinese economic reform, Volume 22 by Timothy King, Jiping Zhang

By Timothy King, Jiping Zhang

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The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. A. The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list (with full ordering information) and indexes of subjects, authors, and countries and regions.

They do, however, provide glimpses of how Chinese reform is operating at a microeconomic level, and of the issues that Chinese teachers and officials regard as important. Although the current Chinese resistance to political change differentiates its reform from the transition to market economies in most other previously Communist countries, there remain of course substantial areas of similarity. The Case Studies One common characteristic of all socialist countries is that they have developed a structure of relative prices that is very different both from the underlying cost structure and from those generally prevailing on world markets.

To Western ears this may sound a rather startling objectiveindeed, the potentially conflicting objectives between the professional managers and long-term shareholders has at times been an area of concern in the West. In the Chinese context, however, the ultimate ownership of state enterprises by the "whole people" has to be taken as given, at least by participants in a discussion such as is reported here. What the reformers were seeking was to reduce government and Party interference with managerial decisions.

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