Index

3rd plenary of the 14th CCP Central in 1980s 70–73 Committee 105–6, 124, 129 in 1990s 129–32 3rd plenary of the 18th CCP Central in planned economy 34–5 Committee 225–6 restructuring 198–201 13th CCP Congress 96, 98, 100 urban development bank 201 15th CCP congress 106–8, 247 jeep 60–61 Bo Xilai 213, 219 Administrative Coercion Law 197 bond Administrative Licensing Law 196 corporate 57, 205 Administrative Litigation Law 96 market 135–7, 204–5 administrative omission 220–21 treasury 57, 204–5 Administrative Penalty Law 197 bribes and corruption 244–5 Administrative Reconsideration Law Budget Law 224 197 bureaucratic-market system Administrative Supervision Law 197 achievements and weakness advance of the state vs the retreat of 235–43 the private firms 179, 186 and corruption 2–4, 8, 116–18 Agricultural Bank of 77, 199 definition 1 Agricultural Development Bank of restrictions on government power China 71, 130 238 Alibaba 116 analytical framework capital acount convertibility 228 literature review 9–17 CCDI see Central Commission for theory of the relationship between Discipline Inspection government and market 17–22 central bank 70–71, 74–5, 129, 138, anti-corruption movement 218–20, 241 192, 195 Anti-Money Laundering Law 208, 222 Central Commission for Discipline Antitrust Law 149, 195 Inspection (CCDI) 218–20 appeal system 241 central government approval certificate after business revenue and expenditure 123–4, license 231 188–90 Auction Law 168 Central Huijin Investment Corporation Audit Law 222 198–200 automobile industry 120 central-local government relationship division of revenue and expenditure Baidu 187 classified contract 88–90 Bank of America 199–200 financial responsibility system 91 Bank of China 98, 198–200 Changhong 117 Banking Supervision Law 195 Charity Law 222 banks checks and balances 92, 239–42, 258–60 foreign 201 Chen Chunxian 61

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Chen Yun 47, 98 Constitution 5, 59, 68, 87, 94–6, 148, China Construction Bank 130 190, 193, 238, 249 China Development Bank 130, 136, Construction Bank of China 71, 200 198–200 China Insurance Regulatory Contract law 95–6, 149 Commission (CIRC) 132 Copyright Law 150, 194 China International Trust & Corporation Law 106, 146, 148–9, Investment Company (CITIC) 61, 176–7, 194, 222 71–4 corruption China National Petroleum among government officials and Corporation (CNPC) 207 business executives 2–3, 8, 237, China Security Regulation 258 Commission (CSRC) 133–5, institutional reasons 171–2 202–3, 228–9 supervision 172 Chunlan 112 types 171 Civil Servant Law 197, 242 Cultural Revolution 2, 7–8, 35, 39–42, civil service reforms 93–4 44, 98–9, 152, 155, 257–8 class Cybersecurity Law 217, 225 division 164 and social mobility 245 Dai Guofang 119 Coca-Cola 60 danwei 160 collapse of private export-oriented Dazhong Agricultural Products sector 211 Wholesale Market 67 collective farming debt household plots 47 corporate 76 people’s commune 28, 39, 53, 93 government 198, 224, 232 command-and-control (1949–1978) decentralisation collective farming 28–9 of authority 7, 12, 13–14, 86–7, 100 development strategy and planning of financial resources 88, 250 27–8 independent planning status 87–8 financial system 34–5 regional 15 formation of consensus on reform decree barrier 3, 257 41–2 Deng Xiaoping 40–41, 46–7, 60, 81, 85, households 32–4 94, 97­–9, 101–2, 105, 170 institutional chart of economic Deng’s south inspection 84, 104 system under the planned Ding Lei 115, 187 economy 35 Du Ling 207 political system and government Dual track approach 46, 245 23–7 problems 36–1 Eastman Kodak 108 urban enterprises 29–32 Economic Contract Law 95–6, 149 commercial paper market 75, 205–6 economic performance 2, 5–7, 13, 19, commune and brigade run enterprises 21, 126–7, 237, 240, 246 55 economic policy vs social stability Communist Party of China (CCP) policy 2, 19–20, 256 24 economic reform conditions for government intervention black swan event 8, 257 set by economic theory 17–18 in countryside 49 consensus on reform 2, 22, 41–2, 155, from Cultural Revolution 2, 7 213, 258 government-led nature 3, 9

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and inequality 170 underground financial system market-oriented 6, 21, 260 206–10 in the past decades 1, 6, 9, 23, 255 financial reforms (2012–) 227–30 in urban areas 55, 57 first Chinese firm listed in overseas without political counterpart 8, 99, market 111 257–8 Food Safety Law 223 Electoral Law for the National People’s Fool Melon Seeds 60 Congress and Local People’s foreign banks 72, 99, 128, 131–2, 158, Congress 225 201 enforcement of laws 238 Foreign Economic Contract Law 96, Enterprise Bankruptcy Law 96, 194 149 Enterprise Income Tax Law 194 foreign invested enterprises (FIEs) 60, Enterprise State-owned Assets Law 148 85, 146–8 environmental problems 163 foreign investment Environmental Protection Law 223 laws and regulations 85, 145 equity division 203–4 Foreign Trade Law 142, 150, 223 exchange rate 9, 27, 143–4, 158–9, 228 formal laws and regulations 94–6, Export-Import Bank of China 130, 148–50 136 four brothers of Liu family 63 export-oriented sector 211–12 four cardinal principles 97 from command-and-control to factor market 246–7 reform 23–43 Fan Dongsheng 214 Fang Xiao 106–7 GEELY auto 185–6 FIE see foreign invested enterprises Goldman Sachs 199–200 financial crisis and slowdown of GOME Electric Appliance 186–7 growth 211 Gong Jialong 186, 247 financial leasing companies 133, 202 governance financial market standardisation 221–5 commercial paper market 75, 205–6 government inter-bank money market 74–5, administrativisation 193–8, 221–5 137–8, 205–6 central 7, 20–21, 24–7, 30, 36–8, repo market 75, 137–8, 205–6 86–93, 118–19, 122–7, 188–93, financial reforms (1990–2003) 217, 220–21, 233, 236, 250, banks 129–32 260 bond market 135–7 civil service reform 93–4 financial system 128–42 control 2, 6, 8, 9, 19, 225–32, 238, money market 137–8 244, 251, 260 non-banking financial institutions decentralisation 7, 12–5, 86–8, 100, 132–3 203, 250 stock exchange 133–5 investment 178, 212, 248 structure 140–42 local 7, 13, 20–21, 24–7, 37–8, 54–5, underground financial sector 58, 73, 82–3, 86–93, 105, 138–40 114–15, 116–19, 121–8, 134–5, financial reforms (2003–2012) 156, 161, 163, 187–93, 217, 220, banking system 198–201 224, 233 money market 205–6 role of 4, 10, 190 non-banking institutes 201–2 target 2, 18–22 non-performance loans (NPLs) 198 vertical management 24–5, 28, 35, stock and bond market 202–5 91–2, 192–3

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government intervention Industrial and Commercial Bank of conditions 2, 17–18, 256 China 70–71, 74, 129–30, 134, Government Procurement Law 224 199–202 government vs market inequality 1, 45, 164–77, 172, 212–13, boundary between government and 256 market 256 informal financial sector different views among leaders pawnshops 79, 212 97–100 underground bank 78–80, 139–40, roles 235–43, 255 206–9 government-business relationship 116 usury 79, 208, 211–12 government-led market economy 122 infrastructure construction 159, 198 Great Leap Forward 39 institutional advantages and defects Great Wall Oil 186 bribe and corruption 244–5 growth classes and social mobility 245 slowdown 211–12, 232–4 human nature of Chinese people Guandao 245 243–4 Guanxi 151 institutional change 1–2, 5–9, 14–17, 105, 159, 248, 255 Haier 62, 113 institutional chart of the economic Handan Steel 105 system health care 124, 155, 161, 210, 212 under the planned economy 35 honesty and credibility 244 Institutions 14–17 household responsibility system Insurance Law 132, 195, 222 distribute the plots to households insurance market 132–3 48–9, 53–4 interest rate marketisation 227 economic effects 51–3 Interim Regulations on Residence forms 49 Permits 223 four poor villages 50–51 Xiaogang 48–9 Jiang Zemin 101, 107 households Jianlibao 112 under the planned system 32–4, 35–6 Joint Factory 718 30–31 housing 160, 232–3 Hu Jintao 155 labour Hu Yaobang 98, 101 cost 211, 230, 232 Huang Guangyu 186–7 migration 162 Huawei 113 Labour Contract Law 222 Hukou 33, 69, 162–3, 231 Labour Law 195 human value and attitudes of Chinese land people 243–5 administration 192, 248–9 finance 188–92 improved government-market system property rights 3, 257, 260 259 law incentives of officials 220–21 further developments 148 incentives problem 37 improvement 221–5 income inequality rule of 242–3 eastern, middle and western 168–70 weakness of 238–9 Gini 128, 169–70 Law on the Administration of Tax urban-rural 127, 168–70 Collection 224 index of marketisation 249–53 Law on the Administration of Urban Individual Income Tax Law 195 Real Estate 194

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Law on Commercial Banks 208, 222 unfinished reform 246–9 Law on Individual Proprietorship weakness of legal system 238–9 Enterprises 149 Li Jingwei 112 Law on Individual Wholly Owned Li Ka-shing Fund 199 Enterprises 150 Li Keqiang 230, 234 Law on Industrial Enterprises Owned Li Shufu 185 by the Whole People 57, 96 Lianxiang 115 Law of Land Administration 194 lines and blocks 24–5, 227 Law on Land Contract in Rural Areas Ling Jihua 219 194 literature review Law on Legislation 150 institutional changes 14–17 Law on Negotiable Instruments 195 relationship between government Law on the People’s Bank of China and market 10–14 195 Liu Chuanzhi 61, 112, 187 Law on the Prevention and Control of Liushi 65–6 Atmospheric Pollution 224 local governemnt Law on Promotion of Small- and competition 13, 126–8 Medium-sized Enterprises 149 as engine of growth 187–93 Law on the Protection of Disabled extra-budgetary revenue and land Persons 195 finance 188–92 Law on the Protection of Minors 195 franchise/subcontracting 121–5 Law on the Protection of Rights and multiple criteria 192–3 Interests of Women 195 political competition 13, 121–2 Law on the Protection of Wildlife vertical management 192–3 224 logic of government 3, 216, 221, 238, Law on the Supervision by the 259 Standing Committee of the logic of the market 21, 216, 234, 259 People’s Congress at Various long-run expectations 253–60 Levels 197 long term vitality of economy 257 Law on Sino-Foreign Cooperative Joint Ventures 85, 96 Ma Huateng 116 Law on Sino-Foreign Equity Joint Ma, Jack 116 Ventures 223 Ma Shengli 58 Law against Unfair Competition 149 macro-economic control 96–7, Law on Wholly Foreign-Owned 118–19 Enterprises 96 Mao Zedong 24, 36, 39, 99 laws and regulations (1990–2003) market Formal laws 148–50 creation 1, 2, 6, 7, 17, 47, 63–70, informal mechanisms 150–51 96–7, 222 Legislation Law 224 enthusiasm 3, 104, 259 Lenovo 84, 187 facilities 66–8 lessons learned factor market 246, 250 behavior foundation of institutional labour market 68 advantage and defects 243–5 land market 68, 191, 249 checks and balances 239–42 product market 17, 246–7, 250 long-run expectations 253–60 property market 248–9 measuring influence of government role of 52, 226 and market 249–53 rural commodity circulation 66 roles of government and market marketisation 2, 11, 155–6, 212–13, 235–43 216, 225–32, 259

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marketisation index 249–53 reform of government foreign trade Merrill Lynch 199 management system 81–3 mobilisation force 3, 259 special economic zones 83–6 money market opening up (1990–2003) bond repo market 137–8, 205–6 exchange rate system 143–4 commercial paper market 75, 205–6 export tax rebate 144–5 inter-bank money market 74–5, foreign firms 145–8 137–8, 205–6 foreign investment 145–8 money laundering 208–9 investment incentives 144–5 opening up (2012–) 229–30 National Securities Law 224 ownership reform of SOEs natural monopoly industries mass layoffs 108 airlines 180–82 selling small SOEs see Fang Xiao coal 178–9 Zhua Da (improving large SOEs) electricity 179–80 106–9 governance structure 15, 127, 176–7, ownership structure of SOEs 172–7 198, 226, 248 petroleum 179 Panasonic 60 property rights 2–3, 5, 14–16, 18, Partnership Law 149–50, 194 21–2, 45, 107, 111–13, 115, Patent Law 96, 157, 194 172–5, 178, 194, 236, 238–9, path dependence 2, 7, 22–3, 44, 153, 248, 255–60 230, 258, 260 railways 182–3 People’s Bank of China 28, 34–5, telecommunications 183–4 70–74, 129­–37, 144, 159, 192, 195, Naughton, Barry 5, 6, 16, 98, 151 203–6, 208–10 Netease 115, 187 People’s Commune new class division 164–7 end 53, 93 non-banking financial institutions organization 28, 39 financial leasing services 74 petitioning bureaus 241 insurance companies 73, 132–3, Pharmaceutical Administration Law 201–4 223 security companies 73, 133, 204 planned system trust companies 73, 133, 138, 202 collective farming 28–9 non-performance loans (NPLs) 131, development strategy 27–8 133, 198–200 financial system 34–5 Normative Opinion on Joint-Stock institution chart 35 Companies and Normative political system 23–4 Opinion on Limited Liability problems 36–41 Companies 148 social security 33–4 North, Douglas 5, 14, 21, 148 urban enterprises 29–32 urban and rural households 32–4 official accountability system 217, political coalition (1990–2003) 151–3 220–21 political competition 126–8 official class 39 political-economic model of official performance criteria 193 government decision-making in a official promotion 126–7, 193 bureaucratic-market economy opening up special economic zones and 18–22 foreign investment 46, 72, 81, 83–6 political infrastructure 257 opening up (1979–1989) political meritocracy 12, 240 changing strategy of development 81 political turmoil 38–41, 44, 152

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pollution 163 reform Population and Family Planning Law gradual strategy 46 223 inertia 156 post-reform period limit 45–7 continued marketisation 225–32 need to be achieved 3 re-concentration of power non-balanced political counter part 217–25 of 3 slow-down of growth 232–4 plan 46 power stagnation and turnover 155–6 restructuring 3, 216 target 45 restraining 3, 11, 216 unfinished 246–9, 257–8 Price Law 149 reform (1979–1989) price reform end of the first stage 100–101 distortion of prices 27, 63–4, 259 financial system 70–80 dual system 63–5, 96 freeing prices 63–6 Price Breaking through the Barrier government 86–97 64–5 government vs market 97–100 private firms houshold responsibility system birth 59–63 47–54 development under government limits 46 regulation 185–6 opening-up 80–86 difficulties 211–12, 230–32 summary of the passage of reform high-tech companies 115–16 101–2 improving management 113–15 target and approach 45–6 recapitalisation 110–13 urban enterprises 55–63 strategic development 142 reform (1990–2003) private firms (2012–) 185–7 diversity of solutions in private procurement 29, 54, 64, 224 sector 110–19 processing manufacturing 146 financial system 128–42 processing trade 146 laws and regulations 148–51 product market 246–7 local government 121–8 Product Quality Law 196 opening up 142–8 Property Law 194 political coalition 151–3 property market 248 specific industrial sectors 119–21 Provisional Regulations on Private reform (2003–2012) Enterprises 96 corruption 171–2 Provisional Regulations on the financial crisis 211–12 Administration of Urban and financial reform 198–210 Township Individual Industrial government administrativisation and Commercial Households 193–8 96 inequality 164–71 Provisions on the Grant and Transfer inertia 156–60 of Use Rights in Urban Land local government 187–93 150 ownership structure of SOEs 172–85 Qin Dynasty 37 private firms 185–7 Qualified Domestic Individual Investor social problems 160–3 (QDII) 203 reform of political system Qualified Foreign Institutional Deng’s idea 98–9 Investors (QFII) 203 Zhao Ziyang 99–100

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reforms in industrial sectors social mobiity 166, 245 automobile 120–21 social problems steel and iron 119–20 environment 163 Regulation on the Expropriation of health care 161–2 Buildings on State-owned Land housing 160–61 and Compensation 194 social security system reform 109–10 Regulations on the Disclosure of SOEs Government Information 197 contract responsibility system 56–9 relationship between central and local financial statistics 173 governments 13, 86, 88, 187 in key sectors 226–7 relationship between government and ownership structure 172–7 market 1, 118–19, 235–8 parent and subsidiary companies 83, Ren Zhengfei 113 175–7 Research Group of Rural Development performance 140, 184–5 49 reform 56–9, 106–9, 172–7, 226–7, resident registration system see Hukou 237, 247–8 returned youth 59 shareholding 57–8, 113 Rong Yiren 61 special inspectors 176 Royal Bank of Scotland 199 state-owned assets 173–5, 226–7, 247 rule of law vs administrating by law state-owned holding companies 242–3 175–7 rules SOE-dominated sectors 226–7 formal 148 Sohu 115 informal 9, 239 sole proprietorship 95, 114, 149 rural credit cooperatives 72, 195 southern- mode 113–15 rural land ownership 242 source of legitimacy 2, 19, 45, 152, 217, rural-urban migration 33, 162, 168, 256 171, 223, 231 special economic zones 46, 72, 83–6 specific industrial sectors 119 SASAC 174–7, 226 Speculations of Wenzhou Investors 140 Securities Investment Fund Law 222 stagnation (2003–2012) 155–215 Securities Law 133, 137, 146, 149, 222, State Administration of Foreign 224 Exchange (SAFE) 71 security companies 73, 133, 204 state capitalism 172 Feile Audio 57, 134 state-owned assets 173–5 Shanghai Free-Trade Zone 229–30 State-owned Assets Supervision and shareholding banks 71–2 Administration Commission see Shekou 84 SASAC Jinbei 111 state-owned-enterprises see SOEs Shenzhen 46, 68, 83–5, 104, 166, 191, Statistics Law 196 207 steel and iron industry 119 Sina 115 stock market 128, 134–8, 139–40, Sino-foreign joint venture 96, 147 202–5, 228–30 SINOPEC or China Petroleum & Chemical Corporation 179, 207 Tai Hui 78 slow-down of growth 232–3 Tao Jianxing 112, 117 small-sum loan companies 209–10 tax Social Insurance Law 195 rebate 144–5 Social Intermediary Organisations and reform 90–91, 104, 122–5, 229 NGO 121 import tarriff 145

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TCL 108 urban enterprises Technology Contract Law 96, 149–50 birth of non-state-owned enterprises Temasek Holdings 199–200 59–63 Tencent 116 Enterprise Autonomy and Contract theoretical boundary between the Responsibility System 56–9 government and the market under the planned system 29–32 conditions for government urbanisation 160, 212, 223, 231, 248 intervention set by economic theory 2, 18 Wan Li 46, 48 political-economic model of Wang Dayong 214 government decision-making Wang Jiguang 214 18–22 Wang Qishan 217–18 three represents 151–2 Wang Zhidong 115 Tiananmen Square movement 8, 65, Water Pollution Prevention and 98, 100–101 Control Law 196 Tieben 119 Wen Jiabao 155 Tort Law 194 Wenzhou 48, 60 township and village enterprises 54–5 Wenzhou mode 113–15 Trade Union Law 195 Wholly Foreign-owned Enterprise Law Trademark Law 222 223 transaction cost Work Safety Law 223 definition 21 WTO entry of doing business 230, 232 improved laws and regulations 158 and formal laws 150 membership 156 and institutional evolution 236, 255 tax rebates 144–5 of marketisation 87, 197 in political economy model 19 Xi Jinping 216–18 and reform 52, 258 Xiaogang village 48–9 trust companies 73, 133, 202 Xuanwu Capacitors Factory 24 Trust Law 150, 195 TVEs see township and village Yin Hongbiao 31 enterprises Yiwu Small Commodities Wholesale Market 68 UBS 199 underground financial system 206–10 Zhang Chaoyang 115 unfinished reform Zhang Ruimin 62, 113 land administration and property Zhao Ziyang 46, 64–5, 97–9 market 248–9 Zhou Yongkang 219 product market and factor market Zhu Rongji 105, 108, 118, 125, 156–7 250 Zhucheng Electric Machinery Factory reform of SOEs 247–8 in Weifang 107 urban commercial bank 131, 200–201 Zhuhai 46, 83–4, 104

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