Options for Market Reforms in ChinaEffective Reform in China: An Agenda. Henry K. H. WooReform in China and Other Socialist Economies. Jan S. Prybyla

Abstract

Most of the former planned economies are in the midst of major economic transitions. In these economies the questions being addressed no longer deal with whether or not they should reform-their very economic survival and future development rest on how to proceed with reform. In the former Soviet Union and eastern Europe, the questions are down to nuts and bolts: how to privatize and encourage market behavior quickly before chaos clouds the situation further. In China, the leadership is attempting to improve efficiency via small scale private ownership and markets while preserving the state sector. Similarity between the two situations ends there. The countries of the former Soviet Union and eastern Europe are concerned with building capitalism and democracy. In contrast, China's goal is to create a market economy with Chinese characteristics.' Reform is deliberately gradual, with increasing market transactions but without turning control or ownership of state-owned enterprises over to the private sector. The intent is economic, not political, reform. Western observers tend to be critical. Many believe that China's gradual approach has created a host of new problems and that political change is a necessary condition for successful economic reform. Two new books examine problems of socialist planned systems generally and discuss solutions that specifically pertain to China. Reform in China and Other Socialist Economies, by Jan S. Prybyla, is a collection of 18 essays written in the 1980s. Prybyla argues that until China has fully functioning markets and political freedom, economic reform cannot succeed. Henry K. H. Woo, in Effective Reform in China: An Agenda, develops a new framework for China that identifies farmer-entrepreneurs as the key to sustained development. Woo is willing to discuss the possibility of reform within China's existing political framework; Prybyla is not. However, both authors argue