China Economic reform timeline
First cut at a timeline (for a talk on china’s IT industry) - need to add FiveYyear plans the the shift to an innovation focus in the last five years or so.Normal 0 false false false MicrosoftInternetExplorer4
Economic Reform - Socialism with Chinese Characteristics
The Central Committee decides to substantially increase the role of market mechanisms in the system and reducing (but not eliminating) government planning and direct control. The first reforms consisted of opening trade with the outside world, instituting the household responsibility system in agriculture, by which farmers could sell their surplus crops on the open market, and the establishment of Town Village Enterprises (TVE).
Duel Track System
China opens up to foreign trade establishing the Yuan as its foreign trade currency and the renmenbi as its domestic currency. PRC sets up one price for State Owned Enterprises (SOEs) and another price for private sector goods with SOEs enjoying lower prices than the private sector.
Law on Sino-Foreign Equity Joint Ventures
Marked the official welcoming of foreign investment in China
Deng lays out the Four Cardinal Principles upholding the socialist road, the people’s democratic dictatorship, the leadership of the CCP, and Maxis-Leninist-Maoist Thought. Deng states that these are essential to China’s advance, to achieving the Four Modernizations and reasserts legitimacy of the CCP
PRC becomes member of the International Monetary Fund
PRC becomes member of World Bank
Creation of the four special economic zones in Zhuhai, Xiamen, Shenzhen, and Shantou in order to increase Foreign Direct Investment (FDI)
1980 - 1990
TVEs become the most vibrant part of the economy and experience significant expansion throughout the decade
Household Responsibility Reform: Farmers can retain surpluses from their individual plots of land rather than surrendering them to the collective. Increases efficiency.
Drafting completed on the 6th Five-Year Plan. this is the first plan put forth under full leadership of Deng Xiaoping, Hu Yaobang, and Zhao Ziyang. Premised on progress towards a market economy, sustaining economic growth.
Policy to open 14 coastal cities and three regions as “open areas” for foreign investment. These regions enjoyed less “red tape” and tax benefits to further attract FDI.
General Principles of Civil Law Passed, providing the basic legal principles for the operation of a market economy.
Thirteenth Congress of the Chinese Communist Party recognizes the private sector as a necessary supplement to the state sector.
1987 - 1994
Coastal Development Strategy to overcome China’s overvalued exchange rate and the semi-reformed character of domestic prices.
Provisional Regulations on Private Enterprises:These regulations, still in effect today, legitimize sole proprietorships, partnerships, and limited liability corporations.
Tiananmen Square Massacre
Stock Markets open in Shanghai and Shenzhen
Fourteenth Congress of the CCP: Officially endorses, “socialist market economy” as the goal of reform.
Banking Reform- The economy begins to overheat with high inflation and the CCP reacts by controlling lending and restructuring bad loads allowing China to weather the 1997 financial crisis
Official renminbi exchange rate starts a market-based, but managed floating rate system.
China and ASEAN
Establishment of the ASEAN-China Joint Committee on Economic and Trade Cooperation and the ASEAN-China Joint Committee on Science and Technology in July 1994
Tax Reform - A comprehensive management system is set up to coordinate tax service and auditing operations and unifying taxes paid by local and international firms. Tax revenue grows as a result.
Nation-Wide Liberalization- the CCP permits all of China, not just coastal regions, to attract FDI, private business, etc
1995 - 1996
30% of TVEs go bankrupt-Sparks massive push towards privatization
Daily price-limit regulation
Reforms in response to the Asian Financial Crisis
China provides Thailand and other Asian nations with over $4 billion (US) in aid.
China decides not to devaluate Renminbi to maintaining stability and development.
President Jiang Zemin adopts a policy that attempts to boost domestic demand and stimulate economic growth.
Price Law passed -prices wil lbe set by the market, but CCP retains right to intervene.
Implementation of new PRC Securities Law
China and the U.S. start to reach a bilateral agreement on China’s accession to the WTO
Removal of trading restrictions- allowing domestic residents to trade B-share stocks.
Jiang Zemin announces that private entrepreneurs can become party members.
China becomes a member of the WTO and is forced to revise existing laws and enact new legislation in compliance with the WTO.
- Eliminate price controls to protect domestic industry
- Eliminate export subsidies on agricultural products.
Opening A-share markets to foreign investors
Constitution amended to provide rhetorical support for the protection of private property
China reaches open-market agreement with 10 Southeast Asian nations
ASEASN reached a consensus on an “ASEAN+3″ (China, Japan, South Korea) trade framework.
First Sino-US Strategic Economic Dialogue (SED) in Beijing
Bush and Hu Jintao establish Cabinet-level forum in order to develop strategies to reach shared long-term objectives while managing short-term challenges in the US-China economic relationship.
Wen Jiabao admits faults in Chinese economic growth: “China’s economic growth is unsteady, unbalanced, uncoordinated, and unsustainable.”-Annual meeting of China’s legislature (March 2007).
May: Second SED -Both countries agree to increase market access, open financial sector, foster energy security, protect the environment, and strengthen the rule of law.
Dec: Third SED -Both countries agree to a ten-year cooperation on environmental sustainability, climate chance, and energy security.
June: Fourth SED -Both countries sign 10 year Energy and Environmental Cooperation Framework, laying out concrete steps to address environmental sustainability climate chance, and energy security.
Chinese Stimulus Package
China plans to invest $586 billion in infrastructure and social welfare by the end of 2010. The stimulus package will be focus on key areas such as housing, rural infrastructure, transportation, health and education, environment, industry, disaster rebuilding, income-building, tax cuts, and finance.