China's recent evolution is not only a story of extraordinary economic growth but also a story of great institutional change. Fan Zhang challenges traditional theory to explain the real origins of China's reform, the political and economic forces driving it, and the reasoning behind its stagnation. The institutional re-arrangement of government and market has been crucial in this marketization process. Using a wealth of documents and cases, Zhang provides a detailed analysis of China's institutional changes over the past 40 years, focusing on the government-market relationship. A theoretical framework is presented to explain the targets and incentives of government and business firms in a bureaucratic-market system, which promoted economic growth, but also fostered corruption and resulted in a re-centralisation of the system. Using an index of marketization in China since 1978, Zhang shows that overall, market expansion has continued but with diminishing marginal gains. The government control of financial resources that had previously been relaxed in the early years of reform has been enhanced to some extent as a result of the changing institutional environment. Policy makers dealing with China-related policies, researchers and postgraduate students in political science, economics and Chinese studies will find this book a compelling exploration of the current and constant cooperation and conflict between government and market.

This title was first published in 2000: This work provides a new insight into china's township and village enterprises (TVEs). It views the governance structure of TVEs as effectively combining the comparative advantage of local government officials in external management and of dual firm managers in internal management to overcome imperfections in both market and government during the transitional period. Through extensive field investigation analysis and case studies, this work shows that the governance structure of TVEs has been evolving during the past fifteen years. To adapt to the changing environment, TVEs have continuously innovated firm contractual form from a government official dominant fixed-wage form to a partnership style profit-sharing form, then to a privatization oriented fixed-rent form. This work develops a complete model to explain how the central government’s partial reform efforts in market liberalization have become the driving force to induce the contractual form innovation, and to explicate how heterogeneity in firms’ technical structures and in local economic settings may affect local government’s decisions regarding contractual form innovation. Using the author’s unique data set, the model simulations predict that the development in the whole market system will result in the diffusion of contractual form innovation and lead to an 'induced privatization’ in this sector. The following empirical studies show this to be a powerful prediction and the progress toward such ’induced privatization' can be expected in China in near future. This research work provides a rich empirical study on China’s institutional transition towards a market system. It explains how a bottom-up endogenous, instead of top-down exogenous, property rights reform can be realized in transitional economies. This work will serve as a valuable reference for researchers and students in economics, economic development and institutional economics - and especially for those interested in research.

This book examines the role of institutions in China’s recent large-scale economic, social and political transformation. Unlike existing literature, it offers perspectives from a variety of disciplines - including law, economics, politics, international relations and communication studies – to consider whether institutions form, evolve and change differently according to their historical or cultural environments and if their utilitarian functions can, and should be, observed, identified and measured in different ways.

As a vehicle to convey both the history of modern China and the complex forces still driving the nation’s economic success, rail has no equal. Railroads and the Transformation of China is the first comprehensive history, in any language, of railroad operation from the last decades of the Qing Empire to the present. China’s first fractured lines were built under semicolonial conditions by competing foreign investors. The national system that began taking shape in the 1910s suffered all the ills of the country at large: warlordism and Japanese invasion, Chinese partisan sabotage, the Great Leap Forward when lines suffered in the “battle for steel,” and the Cultural Revolution, during which Red Guards were granted free passage to “make revolution” across the country, nearly collapsing the system. Elisabeth Köll’s expansive study shows how railroads survived the rupture of the 1949 Communist revolution and became an enduring model of Chinese infrastructure expansion. The railroads persisted because they were exemplary bureaucratic institutions. Through detailed archival research and interviews, Köll builds case studies illuminating the strength of rail administration. Pragmatic management, combining central authority and local autonomy, sustained rail organizations amid shifting political and economic priorities. As Köll shows, rail provided a blueprint for the past forty years of ambitious, semipublic business development and remains an essential component of the PRC’s politically charged, technocratic economic model for China’s future.

China’s rise as an economic power has posed some challenging questions: how did China achieve GDP growth that was even faster than the Four Asian Tigers? Is the "Chinese model" superior? Why hasn’t the rapid economic growth lead to democracy in the country as many observers expected? And can China sustain its rapid economic growth with its existing social system? Institutions and Chinese Economic Development: A Comparative Historical Approach explores these questions by studying the historical relationship between institutions and economic development in China, drawing comparisons with England, Japan and other Asian economies as appropriate. The investigation focuses on several junctures in China’s economic development: the starting point of the divergence between China and the West; the externally-provoked industrial development in the late 19th century; and the contemporary Chinese Miracle. The analysis foregrounds the role played by Chinese institutions and examines their effects on both the country’s failure to industrialize in the past and its economic achievements in recent time. The book also asks whether, without reform to the existing state institutions, China might still be subject to the historical dynastic cycles today, despite its recent economic success. This work is of great interest to students and scholars of the Chinese economy, economic history and institutional economics, as well as comparative history and Chinese studies more broadly.

The book mainly uses the New Institutional Economics Approach (NIE) to examine the formation and development of industrial clusters in China through multiple case studies of textile and clothing clusters in the Zhejiang province. The micro case studies illustrate the interaction between institutional change and the industrial development of China in transition.It also attempts to fill the information gap through an analysis of the typical institutional factors leading to the development and upgrading of industrial clusters, and provides a better understanding of the changing nature of the public-private interface in the process of cluster development in China.

The relationship of China and the outside world for nearly a century is full of twists and turns and changes. For the Chinese nation, it's a memory with unforgettable sadness and happiness. As China developed from a semi-feudal, semi-colonial country to an independent socialist country and to a powerful big country in the world, the Western-dominated international system has had a dramatic change in their attitudes towards China, from contempt and exploitation to hostile confrontation and blockade, and to multiple and complex means including both cooperation, dialogue and pressure. Before the founding of New China, China's diplomacy was by no means a "e;blank area"e;. No matter the military contacts of Yanan revolutionaries led by Mao Zedong with relevant U.S. authorities, or Zhou Enlai's work towards the Western Leftist, or the complex learning process of CPC with the Communist International, or even China and Soviet's war against Japan and the multiple coordination in regaining the sovereign rights over the northeastern China, all share the nature of foreign affairs, an embryonic form of "e;international relations"e;. It was an important "e;pre-history"e; of the external relations for contemporary China, a period of preparation and adaptation for New China's foreign policy. Therefore, making analysis of New China's diplomatic orientation should not ignore reviewing this part of history. In Mao's era, earthshaking changes had taken place in China's foreign relations compared with the situation of Chiang Kai-shek regime. Chinese people stood up and this country will no longer be trampled upon and insulted at will. There were some important strategic initiatives and creations worth to be memorized and respected, such as the Five Principles of Peaceful Coexistence, the exchanges with the U.S., and the Three Worlds theory. However, due to the special situation both home and abroad, the Cold War pattern and the guideline to continue the revolution in particular, China's relations with the world were always in the state of tension and confrontation during the first thirty years after the founding; China was quite marginalized in the international system, with its international image more of a rebel than a constructor. Three decades since Deng Xiaoping launched the reform and opening up policy, China has become one of the most important beneficiaries of economic globalization and one of the most important engines for world economy. The guideline focused on domestic economic development and people's wellbeing also led to adjustments in China's foreign relations and entire international strategy. Chinese economy stepped away from the brink of collapse and developed at a high growth rate, filled with vitality; the majority of Chinese people got rid of poverty and backwardness that had long plagued them, and made a historical leap towards modest prosperity, with increasing awareness of autonomy and legal rights; Chinese diplomacy was no longer passive and contradictory as in the Cultural Revolution, but emerged with the momentum of a big power, firm, calm, targeted and imaginative. No matter how many problems and contradictions occurred in the running-in period, China's relationship with the world is advancing towards a positive and constructive direction. China and the world are more and more closely linked with each other, and the progress of China constitutes one of the most significant achievements of the international system. Domestic and foreign affairs are always closely related. For the past sixty years since the founding of New China, though subject to the changes of international pattern, Chinese diplomacy has been a direct continuation of domestic political guidelines and the overall situation, no matter problems or achievements. "e;If you want to work with iron, you must be tough yourself."e; The way China designs and shapes itself will fundamentally determine the Chinese view and responses to the outside world. China's progress itself directly affects the development and evolution of foreign relations. Based on the observation of China's development since the latter half of the 20th century, we have reason to be optimistic about the future of relations between China and the world.

China's transition from a planned economy to a market economy has succeeded in producing more than a decade of phenomenal growth. Whilst similar reforms in countries of Central and Eastern Europe and the former Soviet Union have seen an initial downturn in production, usually with a significant rise in unemployment, the success of the approach taken by China has been remarkable. However, China embarked upon the process, without a well-designed blueprint at the outset. The resulting piecemeal, partial, incremental, and often experimental approach has proved complicated to implement - requiring a complex melding of politics and economics, internal and foreign affairs, government and market. How the difficult task of balancing the diverse array of often competing concerns has been achieved is the subject of this book, which examines the dismantling of the centrally planned system and the mechanism of institutional change in Chinese transition.

By virtue of several theoretical models and hypotheses, this book is one of the earliest studies which systematically investigates the structure and changes of China’s financial institutions. To begin with, it examines the relation between state utility function and China’s economic growth, and reveals the formation and transition of China’s state-owned financial institutional arrangements. Based on this analysis, the author studies the influence of monetization on the arrangements, and the financial support to China’s gradual reform which have long been neglected by researchers. Also, the model of money demand that can explain the specific conditions of the gradual reform is built, as the neoclassical framework has been incapable of explaining China’s financial performance. In the last chapter, it discusses the dilemma of property rights under the state-owned financial system, with the establishment of the credit equilibrium model and the dual model of bad debts. With insightful theoretical analysis and empirical researches, this book will appeal to scholars and students in finance, economics and economic history.

A ground-breaking new study of China's development paradox - predicated on informal and ambiguous institutions - through property and resources.