Russian and Chinese Reform

Quite simply, the privileges of ownership are accompanied by the powers to set prices, form incentives and determine resource allocation (Carson, part 1, 168). Both countries have now evolved into more market-based systems. In some respects their paths have run parallel. In others, the course has been radically divergent.

This paper seeks to examine the transitional phases and outcomes of Russia and China in the hopes of learning which features of each are worthy of and possible to emulate, and what the future may hold for them. This is an important study, particularly given the economic importance and sheer physical size of each of these nations, and also in terms of the alarming rate of population growth in China.

In the first section Russia's transitional experience is described. Next China's reform efforts are examined. Comparisons are made between what these countries experienced, and their situations are then contrasted. A section on the implications that can be drawn from the

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stry was operating at lower than full capacity because plants could not get necessary power or transportation to step up production (Pye, 1984, 341). These problems were remedied in part by focusing more attention on light as opposed to heavy industry, by creating more consumer goods, as well as by granting more freedom for companies to choose output levels and the introduction of profit sharing. Ownership rights are broken down into three categories in China. The major industries (including raw materials, industrial plant and consumer staples) are still controlled from the center. Then there is a second tier of ownership referred to as 'collectives' where production is privately owned but prices are dictated by the state. A third level of limited private ownership also exists, where price is determined by supply and demand. The internal fiscal reforms instituted by Xiaping were aimed in large part at making it easier for the provinces to achieve productivity growth and remove inefficiencies. Xiaping hoped to increase the central share of revenues by "simplifying the rate and structure of indirect taxes and making domestic enterprise income taxes uniform -- in place of the enterprise-specific contracts of the past --
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Approximate Word count = 2656
Approximate Pages = 11 (250 words per page)

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