The structural reforms that have taken in the PRC since 1978

China has been experiencing great and historic change since the early 1980s. China’s economy, the world’s second-largest (measured at purchasing-power parity), has been gradually opening up.1 In order to keep pace with the rapid and expanding social, cultural, economic, and political developments, the Chinese Government has launched a series of remarkable reforms in its government institutions, designed to promote economic development and social progress.

During 1978-1996, real GDP grew on average by over 9% a year, contributing to a near quadrupling of per capita income. These reforms have dramatically reduced the number of people below the poverty line from more than 200 million in 1981 to about 70 million in 1995. 2 The country’s gross domestic product (GDP) in 2001 reached 9.6 trillion yuan, or US$1.16 trillion, the sixth largest in the world. 3 Today, China is also the sixth biggest trading nation in the world, with imports and exports total ofUS$509.8 billion in 2001, about 24 times more than the total in 1978 when implementation of the open and reform policies began.

In the late 1970s, the Chinese government adopted two major policies of historic significance: to open the country to the outside world and to carry out economic reforms. The year of 1978 proved a crucial one for the reformers. Four modernization marked a significant shift of direction in its historical development. Four modernizatons were formulated by Chairman Mao Zedong and Premier Zhou Enlai, but owing to the interference of the Gang of Four ( Jiang Qing, Yao Wenyuan, Wang Honwen and Zhang Chunqiao ) , they could not actually implement them. After Mao’s death in 1976, his most supporters of Gang of Four are arrested by Hua Guofeng (Mao’s successor). 6 He brought about reform that are carried further by Deng Xiaoping, who gradually gains power. Rehabilitations of Deng’s associates and others sympathetic to his reform plans were stepped up. Not only were many of those purged during the Cultural Revolution returned to power, but individuals who had fallen from favor as early as the mid-1950s were rehabilitated.

The culmination of Deng Xiaoping’s re-ascent to power and the start in earnest of political, economic, social, and cultural reforms were achieved at the Third Plenum of the Eleventh National Party Congress Central Committee in December 1978. 7 The Third Plenum is considered a major turning point in modern Chinese political history. The main engine behind the reforms in China since 1978 has been Deng Xiaoping. Deng believed the only solution to the problems that China faced in the late 1970’s was to liberalise the economy. This was a means rather than an end though.

He noticed the way China’s neighbouring countries had benefited from allowing inward investment specifically and foreign trade in general. And he thought that PRC is necessary to catch up with the world industrially and economically so some liberalization is needed. For China to prosper in the global economy it must increase its economic strength. One of these key elements is to be the development of the countries infrastructure. As China develops it urban centres, new factories, offices and homes along with it push into the modern world, it has created an increase in the countries power demand.

This was his programme of reform, using capitalist economics to increase production in China. Deng carried out reform and liberation rapidly and the Four are agriculture, industry, science/technology and defense. In the early 1980s it dismantled collective farming and allowed private enterprise again. expanding rural income and incentives, encouraging experiments in enterprise autonomy, reducing central planning, and establishing direct foreign investment in China. After 1982, the pursuit of ‘socialist modernization’ has been referred to as ‘building socialism with Chinese characteristics.

He started in the field of agriculture first. In a rural district, a household contract responsibility system was introduced. Peasants were benefited to it and become wealthier. Their standard living were improved and allowed to farm the lands freely. Given government contracts, many peasants worked harder than before and more incentive to work in their farms. Consequently in 1984, it exceeded four hundred tons in production. 9 However, the Mao’s “People’s Commune” was dissolved. In the countryside, a more capitalist attitude took place. Townership village enterprises (TVE’s) was set up and non agricultural production was encouraged.

After 20 years reform and open door policy, today’s China has reached a new historical stage. Characterised by its socialist market economy, Chinese culture, and huge disparity of resources allocation and income distribution, China is now a place full of opportunities, challenges, puzzles, and problems, especially after its entry to WTO which is a real test of China’s strength in deepening its internal reform and in coping with the world trade regime. China has already been on the road of modernization and this tendency is never-returning. China’s integration into the world economy will bring out more opportunities and benefits.

In the late 1970s, the PRC opened its doors to the world to become a full-fledged participant to the global economy. This has had a tremendous impact on globalizing the nation’s agricultural techno science community within a short period of time on the one hand. The role of farmers and non-techno scientists on technological development has become marginalized on the other. Moreover, as political authority is decentralized, a success and failure in a given technical change has increasingly come to depend on persuasion, coercions and negotiations among actors within a given commodity sub sector.

During the 1980s, the PRC Government launched two major administrative initiatives. In the period of year 1982-85, government organization was restructuring and the l988 central government administrative restructuring. 10 In December 1981, the State Council had over 100 organs, the greatest number since the founding of the People’s Republic. 11 To arrest and diminish this growing number, the Government decided to initiate a top-down organizational reform. This programme lasted three years and was a relatively large, objective-driven effort.

Quotas were set for the senior posts on down and requirements were written that would consider a staff member’s knowledge, skills and age. The results were extremely constructive, as the number of top posts at the ministerial and departmental level were dramatically cut. The provincial, county and municipal levels were also significantly downsized with reductions affecting the governor and vice-governor posts, the mayor and vice mayor, and the magistrate and vice-magistrate respectively.

In streamlining government organs, the total number of ministries or commissions of the state council, agencies directly under the state council and state council’s working agencies were cut from 100 to 61; departments of provincial governments were reduced from the 50-60 range to 30-40; municipalities directly administered under the central government had slightly more working organs than the provinces did; city government’s organs were cut from 40 to 20 and the number of county organs and agencies was reduced from 40 to 25. 2 With respect to staff, the state councils were reduced from 51,000 to 30,000, provincial level staff were cut from 180,000 to 120,000, there was a 20% cut for the staff at city and county levels, and there were even more cuts at prefecture level. 13 The 1982 organizational reform also made an effort to reduce specific economic management departments and strengthen comprehensive departments such as coordination, statistics, supervision, and law-enforcement. 14 Carried out in the context of political, economic and social reform, the 1982 initiative was essentially the foundation-building stage for subsequent reform measures.

As such it could not be very thorough. Analyzing results generated from research on political reforms conducted during the latter half of 1986, the Chinese Government set up a special unit to evaluate and plan for the next phase of reforms. 15 In March, 1988 the State Council Reform Plan was approved at the first session of the 7th National People’s Congress. However, a series of economic obstacles including excessive inflation, delayed implementation by a year until 1989. 16 This initiative made “function-transformation” its centre-piece.

It emphasized restructuring the economic management departments. The plan’s long term objective was to establish an administrative system which incorporated the qualities of modern management, but retained traditional Chinese characteristics, including comprehensive functions, rational structure, smooth operations, flexibility, and efficiency. Its short- term goal was to balance relationships, transform functions, streamline staff, raise efficiency, overcome bureaucratism, and increase vitality.

The Government wanted to create conditions that would gradually harmonize the relationships between government and enterprises, government and institutions, government and social organizations, central and local governments, and at the same time relationships among internal government departments. Although this reform achieved some success, it could not resolve some fundamental problems. In October 1992 the Chinese Communist Party held its 14th congress, where it decided to implement a socialist market economy and to push forward administrative and institutional reform. 7 In March, 1993 the 1st session of the 8th National People’s Congress approved the state council reform plan. 18 Thus, a new round administrative reform began in full step with the first phase of the programme to develop a socialist market economy. At the same time facilitate the advancement of its new economic policies. With a series of laws formulated, and policies implemented, the progress achieved in enacting this reform was universally acknowledged throughout China. Such wide acceptance facilitated further modernization and reform.

For over four decades, under a state planned and state run economic system, the Government intervened too intimately in minor details of social and economic activities. Government departments were established to micro-manage productivity, resulting in a proliferation of agencies and bureaus, each with its own narrow jurisdiction. The result was a steady growth of agencies, generally charged with responsibility to oversee the production or control of one commodity, rather than manage an entire sector of the economy. By 1991, there were 86 departments in the central government dealing with economic issues. 9 At the provincial level the average was 55 departments, depending on the cycles of productivity, and 37 existed at the county level. 20 There were also a great number of non-government organizations supporting economic activity. Over the past decade the introduction of a market economic system has been predominantly responsible for the dramatic transformation of social and economic activity within the PRC. Yet despite the incremental reforms executed by the Government at the institutional level, the mechanisms, methodologies and practices of government organizations lag far behind the curve of reform.

The administrative system has not yet adapted to the demands and subtleties of the socialist market economic system. Experts concede that social and economic advancements have been considerably impeded by the over-staffed and inefficient administrative systems. Since 1978 China has seen huge social and economic changes. Twenty years ago, there were an estimated 71% of Chinese were rural farmers. 21 That figure is now down to 51%, reflecting both urbanisation and growth of industry in the rural areas. 22 Another key shift has been from a command economy, under tight government control, to a more liberalised, market-based economy.

In the past farmers were grouped into communes, to which land and quotas for grain production were assigned. The grain was bought by the government at low prices in order to continue the supply of cheap food to the urban population. While the Chinese government has kept self-sufficiency in grain as a strong guiding principle, control of that production has been increasingly decentralised. Land is now assigned to households for fixed periods, such as fifteen years. Quotas have come down, and households are able to sell surplus grain at market prices.

There has also been encouragement for local marketing and inter-provincial trade. Some regions have become pilots for further reforms; in Zheijang province, eastern China, farmers are now free to choose what they grow, and many are turning away from grain to more profitable vegetable and fish production. Farmers in this region have indicated that they would rather buy good quality rice from other parts of the country than depend on their local varieties, that have a short growing season, and are consequently less tasty. It is likely that some coastal provinces will be following the same path.

The reforms centered on improving labor productivity as well. New material incentives and bonus systems were introduced. Rural markets selling peasants’ homegrown products and the surplus products of communes were revived. Not only did rural markets increase agricultural output, they stimulated industrial development as well. With peasants able to sell surplus agricultural yields on the open market, domestic consumption stimulated industrialization as well, and also created political support for more difficult economic reforms Highlights the most significant experiences /events in PRC’s reform.

On the social and cultural side of the issue in the last two decades, it indicated a high degree of fascination and admiration for ancient and modern European civilization, the history, philosophy, science and technology, literature and art, architecture, landscape, living, housing, education, transportation, health care, and social welfare. In the last fifteen years, more than ten thousand young Chinese students on average have gone to the USA for college and graduate study each year, and 25% of the 2000 freshmen entering Peking University each year will leave for America within the four years before graduation. 3 Such a pattern of popularity towards the US in current China, in contrast to a sense of loss toward Europe, will probably not change in the foreseeable future.

Though many Chinese youngsters express their willingness to immigrate to any of European countries if possible, more and more Chinese are aware of the problems that industrialization has brought about in European countries, and worried about the potential threat China will face in future as well, such as a high rate of unemployment, divorce, pollution, environmental deterioration, drug addition, the spread of AIDS, racial discrimination, and ageing population, etc. 4 China is more than likely to enlarge the degree and range of its participation in international activities. Its pursuit of economic modernization and regional stability will incline China toward greater cooperation on security matters and increasing economic and cultural exchanges. However, the rate of economic change, however, hasn’t been matched by political reform, with the Communist Party retaining its monopoly on power and maintaining strict control over the people. The authorities still crack down on any signs of opposition and send outspoken dissidents to labor camps.

As the economic reforms on the mainland spread, the question of political reform started to come to the surface, propelled by events in the Soviet Union and Eastern Europe. This came to a head in Tiananmen Square in May, 1989. The 1989 Tiananmen Square student protests, which were ruthlessly suppressed. The leaders of the Communist Party saw this as an attack on their power, and proceeded to destroy it. Officially, 200 unarmed demonstrators died. 25 Conclusion Since economic development and instituting the reform and opening programme in December 1978, China has embarked on a fresh new road of development.

It proved that this road is correct and suitable to China’s real conditions. In 1998, China’s GDP has increased by 6. 38 times since 1978, an annual growth of 9. 7% on average. 39 The total economic strength has moved from the rear of the world to the 7 th place. 40 The annual output of many industrial products such as steel, coal, cement and television sets are the highest in the world. Grain output increased by almost 10 million tons each year on average in the past two decades. 41 China is finally able to provide adequate food and clothing for its people, 22% of the world’s population, with 7% of arable land of the world’s total.

We bid fair-well forever the grain coupons which lived with us for about 40 years. In 1978, China’s foreign trade ranked 32nd among the world trading nations, and in 1998, China became the 9th largest exporter and the 11th largest importer in the world. 43 At the same time, people’s life has improved remarkably. The per capita net income of rural dwellers increased by 4. 6 times since 1978, and the disposable personal income of urban residents grew by 3. 3 times. 44 Great progresses have also made in science and technology, telecommunication, transport, education, public health, culture, environ- ment protection and other fields.