Friday, January 9, 2009

EPW contains eight articles on economy of China

Dear Friend,

Dec. 27, 2008 issue of EPW contains eight articles on economy of China. The editorial also focuses on this. Two out of these eight articles and the editorial are attached herewith. I'll attach the remaining six articles in subsequent two messages.


With regards,
S. Purkayastha.
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Sumitra Purkayastha
Bayesian and Interdisciplinary Research Unit
Indian Statistical Institute
203 B.T. Road. Kolkata 700 108. INDIA
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december 27, 2008Economic & Political WeeklyEPWdecember 27, 20085Where Is China Going?After 30 years of “reforms”, what has emerged in China is “capitalism with Chinese characteristics”.It is now 30 years since the Chinese Communist Party (CCP) under the leadership of Deng Xiaoping unleashed the transi-tion to capitalism in the People’s Republic of China (PRC). Thepivotal Third Plenum of the 11th Central Committee of the CCPheld in December 1978 marked the start of the process, and theend of the “Maoist” path of development in China.China’s“marketreforms”beganinagriculturewiththeprocess of de-collectivisation. The communes were dismantled and thepeasants exposed to market forces under the “household respon-sibility system”, this, despite the fact that 30% of the villagecommunes had proved that cooperation was a viable way of life.Industrial enterprises in the communes were turned into “townshipand village enterprises” (TVEs), which multiplied exponentially,from employing 17 million workers in 1978 to 85 million in 2006(149 million if one includes TVEs other than in industry alone).Equally significant, in 1979, the Deng view that the “four mod-ernisations” were not possible without an “open-door” policywon the day, resulting in dramatic increases in the flow of foreigntrade and foreign direct investment (FDI), and the developmentof special economic zones (SEZs), close to Hong Kong and Taiwanin Guangdong and Fujian provinces, respectively. Following theThird Plenum of the 12th Central Committee of the CCP in 1984,administered pricing gave way to market pricing, and the com-moditisation of labour services began to be universalised, a process that was hitherto limited to the private sector and the SEZs. From1987, “export-orientation” began to be extended to all of thecoastal areas, with FDI incentives being further liberalised, thecountry becoming the world’s second largest recipient of FDI. Fol-lowing the 14th Congress of the CCP in 1992, the mass privatisa-tion of state-owned enterprises got underway, and by the 16thParty Congress (2002), capitalists were eligible for membershipof the CCP. The characterising of the approach to the reforms inDeng Xiaoping’s now famous phrase, “mozhe shitou guo he” or“crossing the river by feeling for stones” is apt only if the processis compared with the “shock therapy” route in the transition of apost-revolutionary society to capitalism.The Chinese economy has grown at over 10% per annum since1978, the share of exports in GDP moving from less than 5% to35%. When measured on a purchasing power parity basis, theChinese economy is the world’s second largest (the world’s fourthlargest on a nominal GDP basis). The current account surplus inthe balance of payments, presently around 8.6% of GDP, is theresult of sustained trade surpluses. The huge foreign exchangereserves have provided a solid base for the internationalisation,indeed, the “transnationalisation” of Chinese capital. Not longago, financial analysts were predicting the collapse of Chinesebanks, but now China is being courted to inject funds into dis-tressed US financial institutions. Going by official indicators, theincidence of poverty in China has dramatically fallen over thepast three decades and the improvements in human developmentindices are unsurpassed in the developing world.However, the condition of wage labour (more than 350 millionworkers) is difficult – long work weeks, irregular employment,and low wage rates, especially among migrant workers. Peasantincomes have stagnated, fuelling a historically unprecedentedlyhuge migration into the cities – over the past 25 years, some 150to 200 million persons, including women, have migrated fromthe countryside to the urban areas in search of jobs. In this issue,Pun Ngai gives us a moving account of the plight of these migrantworkers, “caught in the grip of capital’s unscrupulous willingness to sacrifice anything in the pursuit of profit”. Moreover, with theprivatisation of healthcare, access has become a problem becausemost people cannot afford to pay for it. And, to compound matters,high growth accompanied by non-enforcement of environmentallaws has caused huge ecological and pollution problems.What China has witnessed over the last 30 years is the devel-opment of capitalism in the name of building “socialism withChinese characteristics”. Ching Kwan Lee and Mark Selden writeelsewhere in this issue with remarkable forthrightness and clarityof China’s recent development – “from one of the world’s mostegalitarian societies on the eve of reform in the 1970s to becom-ing, by 1995, one of the most unequal in Asia, and then, by theearly 2000s, in the world...” But, remarkably, the CCP seems tohave retained its legitimacy; more recently, the post-Deng, HuJintao-Wen Jibao leadership is seeking to contain various strug-gles and unrest with a “new project” for a “harmonious society”.China will be completing 60 years since the founding of thePRC in October 2009, but now, 29 years of the struggle for social-ism (1949-78) under very unfavourable conditions have beeneclipsed by 30 years of capitalist reforms. The new China that has emerged is an economic powerhouse, but the human personalitythat is appearing there is largely being formed by the environment
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edItorIalsdecember 27, 2008EPWEconomic & Political Weekly6Perform or Perish?The Administrative Reforms Commission makes radical suggestions, but who will implement them?The term “public servant” as applied to the bureaucracywould be questioned in a country where anything slow-moving, corrupt and inefficient is described as “bureau-cratic”. That a sarkari naukri (government job) spells security nomatter what the performance has long been a matter of resent-ment among people subject to a public servant’s lack of service.Now the second Administrative Reforms Commission’s (ARC) tenth report Refurbishing of Personnel Administration: ScalingNew Heights has recommended two intensive reviews of govern-ment staff on completion of 14 and 20 years, respectively, contin-uance beyond which would depend on the results of the review.This report comes close on the heels of the implementation of the Sixth Pay Commission which hiked the pay of nearly 50 lakhgovernment employees by 21% with retrospective effect from1 January 2006. Nearly 1.35 crore state government employees all over the country demanded and succeeded in getting paritywith their central government counterparts. The public dis-course occasionally demands accountability and performance-linked salary structures for government employees. Perhaps in response to such concerns, the ARC has suggested enactment of a civil services law with the performance-based continuation of service provision.The Commission has also recommended a new system of pro-motion and cadre allotment, and the setting up of a central civilservices authority to supervise all matters with regard to theseemployees. It wants government servants to undergo mandatorytraining not only at induction but also periodically thereafter,and has asked that their performance be assessed by a third partywith reference to an annual performance agreement signed before each financial year.Arguably the more important issue that the report addresses isthe relationship between the political executive and civil serv-ants. The report says that political neutrality and impartiality of the services must be safeguarded and the responsibility for this lies with both sections. But it is self-evident that this is easiersaid than done. It is true that public ire is directed at the babus because they are the ones seen to be implementing or rather notimplementing the myriad social welfare laws and schemes thatare on paper. The bureaucracy’s upper and middle levels are oftencasteist and feudal, and the motivation to implement schemes that help the marginalised sections of society is suspect. Again,the ordinary citizen’s experience of having to grease palms forbasic documents like ration cards and driving licences to moresophisticated forms of corruption either to get what is guaran-teed as a right or to escape punishment for wrongdoing is nowconsidered a given in daily life. The Right to Information Act has dealt a severe blow to the bureaucracy’s general sense of non-accountability, but it alone cannot change attitudes. Since 2005 the government has proposed varied measures to make thebureaucracy more citizen-friendly. These range from establish-ment of a National Centre of Governance to train governmentstaff in public administration, management, public relations and customer relations to a voluntary retirement scheme for the IndianAdministrative Service, the Indian Police Service and the IndianForeign Service based on mid-career screening.However, what needs to be focused on is that often it is the ex-tent of political will that decides how the bureaucracy imple-ments radical laws and schemes. It is the ruling party that sets the tone for an administration’s sensitivity to public needs from thevillage block to the central government level. The award of plumpostings, the blocking of punitive transfers, and bending therules to reward supporters and punish opponents are all aspects that are steeped in political patronage and a pliant bureaucracyserves the purpose. It is here that the support of conscious citizens for an upright government employee and media vigilance on thebureaucracy gain importance. The government employee cannotthus be viewed in isolation as unaccountable and corrupt.Reports of studies done for the Sixth Pay Commission by theIndian Institute of Management (Ahmedabad) say that most gov-ernment employees work in unhygienic and hazardous condi-tions, that at the senior level there is too much multi-tasking,making it difficult to understand what the employee’s maintask is, that there is rigid compartmentalisation, and that toomuch hierarchy makes coordination of tasks and sharing ofinformation difficult.The ARC’s report has a number of recommendations, as its titlegrandly proclaims, intended to help the bureaucracy scale newheights. However, as with many radical suggestions that havegone before, it is the presence or absence of political will that will decide the fate of the report.in which she/he finds herself/himself, by the structure of thesociety in which she/he is growing up, by the way that societyappraises particular types of behaviour. That society is one whereone class is unceasingly striving to deprive the other, the majority,of the fruits of the society’s collective labour, where the repre-sentatives of the people, even as they publicly proclaim a commit-ment to “socialism with Chinese characteristics”, do not sufficientlyprotect the interests of that majority, and where the educationsystem trains young minds to worship acquisitive success (“to getrich is glorious”) even as they are preparing for their futurecareers. The Cultural Revolution, despite its deep imperfections inthe mindless factional struggles, was a campaign to prevent sucha society from emerging, an enormous class struggle to determinethe future of China, in which the “capitalist roaders”, Lui Shaoqiand Deng Xiaoping won, and Mao Zedong lost. For now, there is arelative calm, but class struggle is a phenomenon independent of human volition, and, after 30 years of capitalist “reforms”, theclass contradictions in Chinese society are beginning to fester.

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