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Political Economy Perspective of China's Economic Transition

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  • Gang FAN

Abstract

This paper tries to understand the fundamental causes and caracteristics of China's gradual market-oriented reform strategy. This will be discussed from two points of view, the "acceptability" and the "faisability". The majority of the society and the leadership did not accept a more radical reform program because the Chinese economic situation in the late 1970s was "too good" for that. For the faisability, the hypothesis is that the lower the growth potential of old system, the less the interest in that old system and the stronger the incentives for reform and the stronger the willingness to pursue radical change. That's what happened with the "dual-track system".

Suggested Citation

  • Gang FAN, 1996. "Political Economy Perspective of China's Economic Transition," Working Papers 199606, CERDI.
    • Handle: RePEc:cdi:wpaper:9
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