AEOC1
The Importance of Private-Owned Enterprises in the Chinese Market Economy
Asian Economic Organization and Competitive Term Paper
[Forfatter]
28. november 2013
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STU count: 24.343
Introduction:
Despite the ever so impressive and discussed economic boom in China, it remains to be a developing country. Its market reforms are incomplete and struggle to catch up on competitiveness with other leading countries. During the past 30 years, China has undergone a drastic transformation in its economy, opening up to foreign trade, foreign direct investment, allowing privatization and going from a central planned economy to an open market economy, but all the while considering itself as a socialistic market economy. The Chinese economic reform and opening up, implemented by Chairman Deng Xiaoping in the late 1970’s, supported the creation of a socialist market economy dominated by the sector (Coase og Wang 2013). Thus, whilst having moved towards a more cooperative and open China the commanding heights of the economy remained firmly under state ownership in contrast to the capitalistic market economies of the West from which China not only learn from, but also have bilateral economic relations to (Nolan 2012). However, today the Chinese government has realized that in order to attain the national competitiveness in the global market, and thereby reach economic growth, the overall performance of the state owned enterprises (SOEs) must improve. It is argued that SOEs in many countries have under-performed private owned enterprises (POEs) consequently privatization has been used as a means to enhance the performance of SOEs (Chang 2007). As China has grown to be an important player in the global economy, I found it interesting to assess the importance of POEs in a market economy especially in the context of China’s public-sector-dominated market economy. Furthermore, I
Asian Economic Organization and Competitive Term Paper
[Forfatter]
28. november 2013
[Skriv dokumentets resume her. Resumeet er normalt en kort oversigt over dokumentets indhold.]
STU count: 24.343
Introduction:
Despite the ever so impressive and discussed economic boom in China, it remains to be a developing country. Its market reforms are incomplete and struggle to catch up on competitiveness with other leading countries. During the past 30 years, China has undergone a drastic transformation in its economy, opening up to foreign trade, foreign direct investment, allowing privatization and going from a central planned economy to an open market economy, but all the while considering itself as a socialistic market economy. The Chinese economic reform and opening up, implemented by Chairman Deng Xiaoping in the late 1970’s, supported the creation of a socialist market economy dominated by the sector (Coase og Wang 2013). Thus, whilst having moved towards a more cooperative and open China the commanding heights of the economy remained firmly under state ownership in contrast to the capitalistic market economies of the West from which China not only learn from, but also have bilateral economic relations to (Nolan 2012). However, today the Chinese government has realized that in order to attain the national competitiveness in the global market, and thereby reach economic growth, the overall performance of the state owned enterprises (SOEs) must improve. It is argued that SOEs in many countries have under-performed private owned enterprises (POEs) consequently privatization has been used as a means to enhance the performance of SOEs (Chang 2007). As China has grown to be an important player in the global economy, I found it interesting to assess the importance of POEs in a market economy especially in the context of China’s public-sector-dominated market economy. Furthermore, I
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