r SP: Many-to-many word alignment exists.
7. Conclusions
Big industrial layout and heavy plants were the common sites of industrialisation across the world in the twentieth century and China was not left out of the rush for these plants, especially with soviet support which was critical in the First Five Year Plan discussed earlier. This continued throughout the last part of the last millennium, but the first decade of this century has witnessed the change from “the bigger-is-better” concept of industrialisation and the drive for science and technology intensive industry. Naughton (2005) observed that “the 11th Five Year Plan (2006 – 2010) lays emphasis on human resources technology development and scientific approach to development”. This position has signaled Chinese desire to transform the economy from the low cost exported machine to a highly technological hub capable of delivering the best in the competitive global economy. Already development in the Information Technology Sector is moving towards the achievement of this goal as state dominance of the industrial sector is highly skewed toward natural resources and utilities sectors; while
“hybrid mixture of ownership and corporate governance patterns has been combined with aggressive policies to foster alliances with global leaders in industry and research facilitating the speedy “development of management and innovation capabilities” (Ernst and Naughton, 2008).
The Central Government using legend computer (now Lenovo) has evolved Management Buy-Out (MBO) as a strategy for the privatisation of the hi-tech sector which involve the licensing of innovation made in government owned institutions to pioneer researchers and managers as a
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way of encouraging innovation and setting up private individual on sound footing to run the IT Industry. Thus today, Chinese Industrial Sector has the hierarchy of the central government at the top running important and large state owned firms, while at the bottom lies most of the Town and Village Enterprises (TVE); initial commune structures and the small State Owned Enterprises (SOEs) converted to private owners through the MBO policy which has ensure orderly transition of these firms from public to private ownership.
Again, the government control firms in the critical sectors were committed to the newly (2002) established state – Owned Assets Supervision and Administration Commission (SASAC), whose responsibility amongst others is to ensure the focus of individual firm on
“core competencies” to ensure profit maximisation. Understandably, Government firms are not waste pipe through which public funds are wasted but they are restructured and mandated to make profit like any other private business entity, hence they remain the veritable instruments of state capitalism in the communist state: a paradox indeed.
All told, China has the largest continuous national history (about 400 years) and was politically, militarily and economically dominant in its region for most of that period. After the liberalisation reforms and neo-Confucian cultural revolution in the late 1970s, China began to make appreciable progress. Massive external (manufacturing) investment was first attracted based on education and cheap skilled labour while equally massive internal investment has been mobilised in modern infrastructure and urban facilities. A key feature of China’s rapid growth is seen to have been its ability to reform its economy very quickly to become more efficient. Indeed, China has huge human resources and potential markets. It has a high class education system. Past obstacles have been successfully navigated. All these have positioned China, formally regarded as a sleeping giant to awaken and play an increasingly active role on the global stage.
SELF-ASSESSMENT EXERCISE
i. Highlight trade and investment reform in Post Mao China.
ii. Identify and discuss the paradox of state capitalism in the communist China.
iii. Identify the contributions Mao Zedong in the foundation of modern China.
iv. Identify the restructuring strategies of Chinese industrial sector in the 21st century.
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4.0 CONCLUSION
China in modern history emerged into the cold war environment at independence, but successfully adapted herself to the task of national building. The consciousness of self- sufficiency and export- driven strategy given her superior balance of trade and payment at all time, making it the fastest growing economy despite the global economic recession of 2008. Chinese ingenuity in adapting to changes in the global economy and the effectiveness of these strategies remain a source of discourse in years to come.
5.0 SUMMARY
The People Republic of China was founded on the communist ideology but has successfully practiced state capitalism which encourages export and discourages import as well as copy technologies and adapts them to the environment with high level of innovation of managing the economy in the ever changing world.
6.0 TUTOR-MARKED ASSIGNMENT
Identify and discuss the paradox of state capitalism in communist China
7.0 REFERENCES/FURTHER READING
Ernst, D. & Naughton, B. (2008). “China’s Emerging Industrial Economy: Insights from the IT Industry.” In: Christopher McNally (Ed.). China’s Emergent Political Economy: Capitalism in the Dragon’s Lair. London: Routledge.
Gao, M. (2008). The Battle for China Past. London: Pluto Press.
Lardy, N. (1992). Foreign Trade and Economic Reform in China 1978 – 1990. New York: Cambridge University Press.
Naughton, B. (2005). The New Common Economic Programme: China’s Eleventh Five Year Plan and What it Means. China Leadership Monitor (16).
Nnoli, O. (1986). Introduction to Politics. Ikeja: Longman.
Steinfield, E. (1998). Forging Reform in China: The Fate of State – Owned Industry. New York: Cambridge University Press.
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