Cours 2 [Mode de compatibilité]

Economie de la Chine16 février Transition vversers l'économie de marché (1978-2005) et articulation rurale-urbaine Sandra PoncetEmail: sandra.poncet@univ-paris1.fr1Séance 2Transition vers l'économie de marché (1978-2005)Articulation rural-urbaine21Reforms (1978-2005)I-Situation before the reformsA-Mean featuresB-ProblemsII-ReformsA-Incentives for reformsB-Approach and startC-A two-phase framework1-Transition through 19922-1993-presentConclusion: Outcomes and Challenges3IntroductionThe choice of heavy industry oriented strategy to promote overallindustrialization and economic developmentHoffmann’s lawPolitical & military situations called for defense improvementConstraints of small market and inadequate demandThis choice was in direct conflict with China's resourceendowments and ability to mobilize resources: “anti-comparativeadvantage, leap forward development strategy” (Lin et al., 1996)Scarcity of capitalScarcity of foreign exchangeInability to mobilize funds42IntroductionResolution of the contradiction between the strategic goal and theeconomic realityNeed for macro-policy environment that would artificially reduce thecost of heavy industry development by providing:-cheap labor -cheap capital raw material -cheap imported equipment and technologyfor heavy industry projects.Market mechanism had to be rejected completely so that therelative prices of products and factors of production could beddietermined at will-low ...