"Capitalist-Roaders" In China
February 21, 1997
China-watchers say the late Deng Xiaoping had a magical touch in leading his country's economy from communism to a sort of capitalism. But they question whether his successors have the will and means to carry the transition further.
- China's economy grew nearly 10 percent in 1996, saving rates are high and labor remains cheap.
- Foreign direct investment in China has gone from nearly nil in 1982 to over $35 billion in 1995.
- But some analysts say the country must improve its public works and legal systems for progress to continue -- and certainly turn around its deplorable human rights record.
Observers say Deng had the influence to override those who thought economic modernization should proceed at a slower clip. And he had sufficient vision to embrace some painful, but necessary, economic reforms.
- He began to allow companies to lay off workers and gingerly began to accept the concept that companies could go bankrupt.
- Part of his legacy is that economic restructuring is no longer an ideological concept, but a technical one.
- When the Chinese leadership debates how to introduce capital markets or dissolve inefficiencies in the state sector the debate is no longer over whether these steps are allowable -- but about the concrete processes of how to orchestrate the change.
Some economists say there may be possibilities for faster and more substantial progress if younger, well-informed technocrats replace the ideological old guard and are allowed to proceed with restructuring and reforms.
Source: Sheryl WuDunn, "Can Deng's Heirs Finish the Long March to Capitalism?" New York Times, February 21, 1997.
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