The Economic Development of China: A Comparison with the Japanese Experience.

• Author: Khactu, Dominique N.

The book addresses a topic of growing importance in today changing international political and economic landscape: the emerging global power of the People Republic of China, and the present and future prospects of its economic development. No study of the economic performance of the Third World, and no assessment of economic growth in East Asia would be complete without consideration of China's current transformation and performance. Presently, China is Asia's second largest economy, after modern Japan, in terms of GNP. As Asia's largest country with nearly a quarter of world population, what happens in China will not only influence the development of Asia as a whole, but will also affect the world economy at large.

Ryoshin Minami, a professor of economics at the Institute of Economics Research, Hitotsubashi University, Tokyo, offers a comprehensive analysis of China's economy since 1949, but with a particular emphasis on the recent period under Deng Xiaoping's gradualist approach to economic liberalization (1978-1990). The main questions Ryoshin Minami attempts to answer are: What are China's current economic problems and their causes? What are the difficulties regarding China's economic reforms? Where should China's economy go from here? Thus, the author provides information about several important aspects of the Chinese economy. He identifies the problems that China must face to develop its economy and elucidates the structural deficiencies which lay behind these problems. If China is to have some lasting economic prosperity and growth, it must, as the author suggests, continue and expand the reform of its economic and financial structure, a reform that was initiated in 1978.

First, the author recommends a vigorous continuation and expansion of rural and urban reforms. Rural reforms began in the agricultural sector when the people's commune system was abolished and farmers became responsible for their own profits and losses. Urban reforms began in 1984, stimulated the China's economy by increasing individuals' incentive to work. Today, the inefficiency of the old Chinese planned economic system, which China imported from the former Soviet Union during the 1950s, has become apparent to everyone. To make the operating process of the Chinese economy more effective, the above reforms must be continued.

Second, China should develop its basic markets - financial and labor markets. An efficient operation of capital and credit flows will be...