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Economic reform in China (English)

This paper reviews the experience of centrally planned economies with reforms and the relevance of their experience to China. Attempts made at the decentralization of decision making in China are considered and recommendations made for continued reform efforts. The discussion emphasizes the interdependence of decentralized decision making, the use of prices as signals for resource allocation, incentives at the production level, and competition among producing units. Specific recommendations relate to manufacturing, industrial prices, collective and individual enterprises, and agriculture. Regional decentralization of investment decisions may meet with objections since local authorities do not have an overview of alternative investment possibilities. The measures proposed for industry and for agriculture are interdependent, inasmuch as the two sectors provide consumer goods as well as inputs for each other. Political and administrative constraints will affect the pace at which progress will be made, and sectoral differences may result.


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    Journal Article

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    East Asia and Pacific,

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    Economic reform in China

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    world market price;Exchange Rates;capital construction;domestic price;decentralization of decision making;international trade in textiles;profit retention;consumer goods;light industry;industrial material;Incremental Capital-Output Ratio;expansion of export;national income;heavy industry;cost of capital;machinery and equipment;special economic zone;price of export;government budget deficit;return to education;board of supervisor;share of investment;reform measure;individual enterprise;money creation;industrial enterprise;foreign exchange;South East Asian;agriculture and industry;cost of import;interest on investment;contractual joint venture;average real wage;domestic producer price;determination of price;income distribution effects;power of taxation;goods for export;real interest rate;supply of petroleum;foreign direct investment;system of price;interest rate policy;rapid economic development;mobilization of resource;increase in profit;prices for products;shortage of energy;durable consumer good;improvement in productivity;rate of profit;balance of payment;foreign exchange retention;role of bank;local government administration;cost of production;annual interest rate;higher interest rate;form of dividends;absorption of labor;effect of price;quality of product;income tax rate;rate of investment;Exchange rate policies;decline in inflation;public welfare fund;production and export;composition of output;Balance of Trade;net material product;exchange rate policy;large budget deficit;investments in infrastructure;lack of competition;foreign investment law;capacity utilization;negotiated prices;state budget;treasury bond;physical planning;agricultural output;money supply;adverse consequence;domestic production;monetary policy;land area;acreage limitation;foreign trade;inflationary pressure;firm level;transportation facility;agricultural income;differentiated products;market relations;decentralized decision;household plot;compensation agreement;macroeconomic framework;national economy;market outlet;domestic transportation;credit ceiling;market size;export quota;increased demand;world economy;rural population;productive investment;import competition;Natural Resources;urban dweller;production cost;foreign capital;reform effort;relative price;agricultural price;rural area;family responsibility;industrial product;national interest;industrial production;investment loan;import restriction;steel product;labor relation;domestic sale;exporting firms;central authority;profit tax;



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Economic reform in China (English). World Bank reprint series ; no. REP Washington, D.C. : World Bank Group.