China’s Transition to a Market Economy: How Far across the River?

Yingyi Qian
Department of Economics
University of Maryland
Jinglian Wu
Development Research Center
The State Council of the People’s Republic of China


China's economic reform

China’s economic reform








































a recent editorial in China Newsweekly magazine by Wu Jinglian (吴敬琏),


China’s Caijing magazine has long been known as one of China’s few hard-hitting journalistic organizations. Although it is subject to official censorship on any issue deemed politically sensitive, it nonetheless maintains editorial standards of, as far as possible, giving accurate and unbiased reporting.

That’s why its highly pessimistic analyses of China’s economic and social situation, and the challenges facing the new generation of Chinese leaders being named in October, has many observers taking note. The most recent issue of the magazine devoted its cover feature to an interview with leading economic analyst Wu Jinglian—and his diagnosis of China’s current state was not positive.

Wu Jinglian said conflicts in China’s economy and society have reached a critical juncture, as clashes intensify with the growing shortage of domestic resources, environmental destruction, corruption and the widening rich-poor gap.

According to Wu, the majority of these problems are caused by failed implementation of economic reforms, lagging political reform, intensified repression of administrative power and officials’ market intervention. China’s top priority now should be to restart reforms in the economy and politics.

Most Chinese economists tend to wholly separate economic reform from political reform, especially given that comments on the latter topic are often censored or punished by Party authorities.

In his Caijing feature, which has gone viral on the Chinese internet, Wu states that China’s new leaders have only two choices going forward: either establish a “market economy under the rule of law” or deliberately continue in the direction of “state capitalism”.

Wu later clarifies that he means the state-owned enterprise model whereby officials and their families dominate markets to their own benefit. This kind of so-called “crony capitalism” is a key factor in the current troubles facing China, from corruption to widening class resentment.

Beijing-based lawyer Xiao Guozhen says that China will be a very dangerous place if there are not sincere efforts to realize the rule of law.

[Xiao Guozhen, Beijing-Based Lawyer]:
“The free economy under the rule of law is the only way out for China. I don’t see any other option. If the economy lacks rule of law it cannot be sustainable, and could even see a terrible crash. All sectors in China have great potential if the rule of law really improves.”

This is Caijing’s third article in as many years about economists’ appeals to reinitiate reforms. Yet, according to most observers, serious and comprehensive political or economic reform has long been put on hold by Communist leaders.

For more news and videos visit ☛
Follow us on Twitter ☛
Add us on Facebook ☛



Sociologist Hu Xingdou says urbanization is needed, but should be more balanced

Sociologist Hu Xingdou says urbanization is needed, but should be more balanced












Follow us on TWITTER:
Like us on FACEBOOK:

CCP mouthpiece Xinhua News Agency reported, a total of
more than 660,000 corrupt officials in China have been checked for violating the law
and discipline since the 17th Communist Party Congress
in 2007, including Bo Xilai, Liu Zhijun, Xu Zongheng and other major cases.
However, scholars said that, after taking power,
the CCP helped the ruling class benefit to help the continuation of the one party dictatorship.

On Oct. 15th, Xinhua News Agency cited statistics
from the Ministry of Supervision of the CCP Discipline
Inspection Commission:
from November 2007 to June 2012,
discipline inspection and supervision organs received
6,600,006 thousand reported cases.
They filed 640,003 thousand cases, closed 6329,000 cases
and punished more than 668,000 people by CCP discipline.
It was reported that, the Ministry of Supervision of the CCP
Discipline Inspection Commission seriously dealt with Bo Xilai,
Liu Zhijun, Xu Zongheng and other major cases, including

Kang Rixin, Huang Yao, Wang Yi, Zhang Jiameng,
Liu Zhuozhi, Huang Sheng and other senior officials.

Zhao Yuanming, expert of law and Chinese Studies
pointed out, Bo Xilai is special and top-notch among more than 600,000 corrupt officials.
According to the disclosures from overseas media, the amount
of money Bo Xilai transferred abroad is about $ 6 billion USD,
and he played with more than 100 women,
20-30 of whom are public figures.
He also planned to win over the military, the foreign media,
as well as some of the writers to get Xi Jinping down in the 18th CCP National Congress.
Zhao Yuanming: “He focused on money and also on power.

He used the dirty money to build connections with armies
and find supporters.
It is possible for him to get the support
of the army for taking his position.”
Before this news, Xinhua News Agency also reported that
He Guoqiang, member of the Standing Committee of the
Politburo and also the head of CCP Discipline Inspection
Commission announced at the 22nd meeting of the Central Anti-Corruption Coordination Group,
from November 2011 to June 2012, there were more than
660,000 people punished by the inspection organs with so-called “party discipline”,
and more than 24,000 were transferred to judicial organs for
suspicion of having committed crimes.

Why is the number of people punished by party discipline
much more than the number of people brought to justice?
The outside world wants to explore the reasons.

Liu Yinquan, the host of the Central Committee of the Chinese
Social Democratic Party: “Some people should be sentenced,
but they are protected by his/her faction and finally
exempted from criminal punishment.
The offences of Bo Xilai include live organ harvesting,
corpse processing plants, murders and large-scale corruption.
Therefore, Bo Xilai should be sentenced to death with
immediate enforcement. But he may just be sentenced to death with reprieve.”

Liu Yinquan also pointed out, in the case of one-party rule,
court, procuratorate, public security bureau are led by the party,
and a lot of punishments are just specified decisions
made by the Politics and Law Committee.
Besides, CCP officials like to hold each other into a group,
then they may protect others from being punished with just sentencing in law.
Hu Xingdou, a professor at Beijing Institute of Technology
once calculated that, probably less than one percent of the Chinese corrupt officials were investigated.
He said to Voice of America, officials who were brought
to justice may be marginalized people
or those who failed to get protection from the power
safety net protecting those at higher level.

Zhao Yuanming thought, after the CCP took power,
it took the continuation of dictatorship as being of primary importance.
Therefore, the CCP just provides benefits for
the ruling class and leaves a trend of corruption.
Zhao Yuanming: “CCP just uses the anti-corruption
banner to confuse people and get their support.
Besides, the CCP can also kick out corrupt officials
who are less obedient or of low competence by using the anti-corruption banner.”

Hu Xingdou said, the investigation intensity of the CCP
Discipline Inspection Commission lags far behind the growing rate of corruption cases.
Fundamental problems cannot be solved by inner-party
institutions, if the social system does not change.
However, the website of People’s Bank of China cited the
research data of Chinese Academy of Social Sciences last
June and mentioned, since the mid-1990s, there have been
16000-18000 officials who have absconded,
and what they carried amounted to 800 billion RMB-
an average of fifty million RMB each.

However, no one can provide a figure for the amount of
dirty money handled by corrupt CCP officials.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s