Privatization In China

In the last quarter century, China has been experiencing three dimensional transformation of the economy: from a planned economy to a market economy, from an agrarian economy to an industrial economy, from a relative closed economy to a relative open economy. By the time Deng took power, he made the historic decision “reform and opening-up” at the Third Plenum of the CCP Eleventh Party Congress on December 18-22, 1978.

1978–1984

the first parts of Chinese economic reforms in the late 1970s and early 1980s involved the bottom-up approach of reforms focusing on agricultural Reform, decentralization of the government, entry of township and village enterprises, state-Owned Enterprise reform, . Deng decollectivized agriculture and emphasized

After Deng's death in 1997, Jiang Zemin and Zhu Rongji handpicked by deng continued the reforms and became ardent reformers. Steeper reforms toward privatization have taken place since the government decided to “let go of the small and hold on to the large” in 1997. In 1998, large-scale privatization occurred, in which all state enterprises, except a few large monopolies, were liquidated and ther assets sold to private investors. By 2000, more than 80 percent of small and medium-sized enterprises completed their transformation through ownership diversification, which includes restructuring, mergers, leasing, contracting, joint-stock companies, and bankruptcies. Publicly listed companies are mostly large ones. In 2002, the government started to allow cross-national mergers between foreign and Chinese state enterprises and thus opened a new channel for reforming state enterprises. Between 2001 and 2004, the number of state-owned enterprises decreased by 48 percent. During the same period, Jiang and Zhu also reduced tariffs, trade barriers, and regulations; reformed the banking system; dismantled much of the Mao-era social welfare system; forced the PLA to divest itself of military-run businesses; reduced inflation; and joined the World Trade Organization. These moves invoked discontent among some groups, especially laid-off workers of state enterprises that had been

Also, China freed the yuan from a dollar peg, letting it float within a tightly managed band. Also conservative Hu-Wen Administration began to reverse some of Deng Xiaoping's reforms in 2005. It shows that the government adopted more egalitarian and populist policies. It increased subsidies and control over the health care sector, halted privatization, and adopted a loose monetary policy, which led to the formation of a U.S.-style property bubble in which property prices tripled. The privileged state sector was the primary recipient of government investment, which under the new administration, promoted the rise of large "national champions" which could compete with large foreign corporations. In 2006, Two great but controversial projects, the Three Gorges Dam and a railway to Tibet, are completed. What’s more 2008 Beijing hosted hugely successful Summer Olympic Games, illustrating China's arrival on world