China`s Administrative Reform: Constructing a New Model for a Market Economy

Abstract

Since the early 1980s, the Chinese authorities have tried to overhaul the country’s obsolete command economy but have achieved only marginal results. In 1992, a new round of administrative reform was launched, based on ownership reform of the state sector and entailing a substantial restructuring of the government economic bodies. Gradually a new model for China’s market economy has emerged: the state’s economic management will be centered on property operation and sectoral guidance, and administrative ties between state agencies and enterprises will be severed. As a result, most industrial ministries at the center and regional bureaus will be either transformed or removed. However the struggle for control over state-owned enterprises continues to intensify between state cadres and firm managers. Whether the blueprint for the new model can be successfully translated into reality remains to be seen.