Showing papers on "Social ownership published in 2000"
TL;DR: In this article, the authors use the term "privatization with Chinese characteristics" to describe China's current stage of ownership reform, even though, as they also suggest in Part IV, the Chinese strategy has not been to han d control and equity over to private holders, but, ironically, to bring private savings into state-controlled shareholding enterprises.
Abstract: LAN CAO [*] I INTRODUCTION Since 1978, when China adopted its open-door policy and allowed its economy to be exposed to the international market, it has adhered to what Deng Xiaoping called "socialism with Chinese characteristics." [1] As a result, it has produced an economy with one of the most rapid growth rates in the world by steadfastly embarking on a developmental strategy of gradual, market-oriented measures while simultaneously remaining nominally socialistic. As I discuss in this article, this strategy of reform--the mere adoption of a market economy while retaining a socialist ownership base--should similarly be characterized as "privatization with Chinese characteristics," [2] even though it departs markedly from the more orthodox strategy most commonly associated with the term "privatization," at least as that term has been conventionally understood in the context of emerging market or transitional economies. The Russian experience of privatization, for example, represents the more dominant and more favored approach to privatization--certainly from the point of view of the West and its advisers--and is characterized by immediate privatization of the state sector, including the swift and unequivocal transfer of assets from the publicly owned state enterprises to private hands. On the other hand, "privatization with Chinese characteristics" emphasizes not the immediate privatization of the state sector but rather the retention of the state sector with the concomitant creation of a parallel non-state sector designed to supplement the state sector and to serve as a social "shock absorber" in the event that the state sector itself is to be eventually "privatized"--or as Chinese officials prefer it, "corporatized" or "securitized." [3] In this article, I use the term "privatization" to describe China's current stage of ownership reform, even though, as I also suggest in Part IV, the Chinese strategy has not been to han d control and equity over to private holders, but, ironically, to bring private savings into state-controlled shareholding enterprises. The distinction between "privatization" and "corporatization" or "securitization" rests on the terms' ideological significance to Chinese officials, who view "corporatization," the conversion of a state-owned enterprise into a shareholding company, or "securitization," the subsequent sale of such shares on a securities market, as ideologically compatible with "socialism with Chinese characteristics." On the other hand, "privatization"--stemming from the word "private" and identified with the institution of private ownership without necessarily ensuring the preservation of the state as the agent of the "entire people" in the social ownership of the means of production [4]--is considered to be anathema from an ideological standpoint to the state's official adherence to socialism. [5] Because China has been ideologically circumscribed by "market socialism"--market-based but only palatable to and compatible with socialism--it has had to opt for a form of privatization that allowed the reformers to argue for market-oriented reform while promising that the state sector itself will be insulated from market encroachments. Despite its blatantly ideological roots, the Chinese path nonetheless should be examined for its arguably legitimate economic and theoretical underpinnings--for example, whether there are valid economic reasons for a strategy that favors retention of the state sector and the concomitant creation of a non-state sector, and whether state-sector privatization, when it is in fact implemented, would be more effective after a full-fledged non-state sector has been created because then the transfer of ownership from state to private hands would be taking place in the context of an already marketized framework. These types of questions will have considerable policy ramifications as m ore and more countries search for an exit from an economic system based on full public ownership of the means of production and compulsory state economic planning. …
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