ABSTRACT

China has become deeply integrated into the world economy. Yet, gradual marketization has facilitated the country’s rise without leading to its wholesale assimilation to global neoliberalism. This book uncovers the fierce contest about economic reforms that shaped China’s path. In the first post-Mao decade, China’s reformers were sharply divided. They agreed that China had to reform its economic system and move toward more marketization—but struggled over how to go about it. Should China destroy the core of the socialist system through shock therapy, or should it use the institutions of the planned economy as market creators? With hindsight, the historical record proves the high stakes behind the question: China embarked on an economic expansion commonly described as unprecedented in scope and pace, whereas Russia’s economy collapsed under shock therapy. Based on extensive research, including interviews with key Chinese and international participants and World Bank officials as well as insights gleaned from unpublished documents, the book charts the debate that ultimately enabled China to follow a path to gradual reindustrialization. Beyond shedding light on the crossroads of the 1980s, it reveals the intellectual foundations of state-market relations in reform-era China through a longue durée lens. Overall, the book delivers an original perspective on China’s economic model and its continuing contestations from within and from without.

chapter |14 pages

Introduction

part I|72 pages

Modes of Market Creation and Price Regulation

chapter 1|25 pages

Bureaucratic Market Participation

Guanzi and the Salt and Iron Debate

chapter 2|27 pages

From Market to War Economy and Back

American Price Control during the Second World War and Its Aftermath

chapter 3|18 pages

Re-creating the Economy

Price Stabilization and the Communist Revolution

part II|207 pages

China’s Market Reform Debate

chapter 4|26 pages

The Starting Point

Price Control in the Maoist Economy and the Urge for Reform

chapter 5|37 pages

Rehabilitating the Market

Chinese Economists, the World Bank, and Eastern European Émigrés

chapter 6|30 pages

Market Creation versus Price Liberalization

Rural Reform, Young Intellectuals, and the Dual-Track Price System

chapter 7|43 pages

Debunking Shock Therapy

The Clash of Two Market Reform Paradigms

chapter 8|34 pages

Escaping Shock Therapy

Causes and Consequences of the 1988 Inflation

chapter |12 pages

Conclusion

chapter |20 pages

Key Chinese Reform Economists 1

chapter |3 pages

Author’s Interviews