Notes on the Methodology of China`s Economic Reforms

Abstract

Since 1979 the Chinese economy has sought to modernize, that is, grow efficiently, through systemic change. The methods used to bring this about have included pragmatic gradualism, partial marketization, diversification of properly rights, and partial opening to external trade and finance. First, marketization of the domestic incentive, information, and coordination mechanisms has been qualified by numerous formal and informal restrictions. Second, outright privatization has been avoided in favor of various forms of diversification of property rights. Third, with the exception of advanced technology-embodying capital, the door to external economic relations has been more open on the export than the import side. Despite occasional government protests to the contrary, the objective of the reforms is a transition toward a modern, information technology-driven market system.