Andrzej Bolesta

China: Economic Reforms, Development Policy and Political System

Contrary to many Eastern European countries whose economies contracted significantly having embarked on the transformation path after the year 1989, for the last twenty seven years China has been rapidly developing. It has multiplied its GDP, and has become an important member of the global economy and of the international political scene. What is the secret of a dynamic socio-economic development in the post-socialist transitional period? What did China do that other countries did not? The lecture tries to answer the above questions.

There are undoubtedly many factors which influenced China's results. However, there seem to be some major mechanisms, which I believe should be considered to have a decisive impact on the current situation, which are consequently analysed.

Accepting the fact that systemic reforms and development policy are two different processes and therefore two different sets of instruments should be utilitised in their implementation, seems to be the first step towards smoother transition. One needs however proper co-ordination between these two processes and the very act of co-ordination in all probability matters more than the two processes separately. Consequently certain instruments need to be implemented in order to navigate the development policy aimed at increasing the speed of the fair socio-economic development, and the systemic reforms being the processes which transform the centrally planned economy into a free market economy.

Appropriate co-ordination between systemic reforms and development policy does not suffice. In order to realise and implement instruments which propel a smooth transition and allow dynamic socio-economic development, one must have an adequate political environment created by both: the political system (legal and administrative frames) and the political power centre which will be able to implement the socio-economic changes and enable the system to operate.