Chinese Economy and Policy

THE CHINESE ECONOMY

Transitions and Growth

Barry Naughton

The MIT Press Cambridge, Massachusetts London, England

© 2007 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher. MIT Press books may be purchased at special quantity discounts for business or sales promotional use. For information, please e-mail special_sales@mitpress.mit.edu or write to Special Sales Department, The MIT Press, 55 Hayward Street, Cambridge, MA 02142. This book was set in Times Roman by SNP Best-set Typesetter Ltd., Hong Kong. Printed and bound in the United States of America. Library of Congress Cataloging-in-Publication Data Naughton, Barry The Chinese economy : transitions and growth / Barry Naughton p. cm. Includes bibliographical references and index. ISBN-10: 0-262-14095-0—ISBN-13: 978-0-262-14095-9 (hc.: alk. paper) ISBN-10: 0-262-64064-3—ISBN-13: 978-0-262-64064-0 (pb.: alk. paper) 1. China—Economic policy. I. Title. HC427.95.N38 338.951—dc22 2006 2006046840 10 9 8 7 6 5 4 3 2 1

Contents

Acknowledgments INTRODUCTION From Transition to Development The Distance Traveled The Dual Transition China’s Growth Performance Becoming a “Normal” Country China to the Future Using This Textbook Bibliography I 1 LEGACIES AND SETTING The Geographical Setting 1.1 Landforms 1.2 Climate and Water 1.3 Provinces and Regions 1.4 Mineral Resources 1.5 Conclusion: Regional Differentiation Bibliography The Chinese Economy Before 1949 2.1 The Traditional Chinese Economy, 1127–1911 2.1.1 High-Productivity Traditional Agriculture 2.1.2 The Commercialized Countryside 2.1.2.1 Sophisticated Institutions 2.1.2.2 Competitive Markets 2.1.2.3 Small-Scale, “Bottom-Heavy” Economy

xv 1 3 4 5 6 8 10 12 13 15 17 18 20 22 28 29 31 33 34 34 36 36 37 37

2

iv

Contents

2.1.3...