China's Economic Reform and Development Programme

A Tortuous Path for the Chinese Economy

After the establishment of the People's Republic of China (PRC) in 1949, mainland China underwent a fundamental change in its political and economic system. The new system was based on Marxist-Leninist philosophy and its economic doctrines were borrowed from the former USSR and other communist countries in Eastern Europe. Needless to say, it was a new experiment for China, and its implementation was marked by serious economic setbacks and great social turmoil, particularly during the Great Leap Forward (1958-1960) and the Cultural Revolution (1966-1976). It was not until 1979 that a new development mode appeared and an open door policy was adopted.

The traumatic experience of the early years of development showed that while the state machine could muster sufficient political force to launch economic drives and mass movements, such initiatives had easily gone to extremes and created havoc. In the more recent experiment, China has had to seek a suitable economic system for herself with a more pragmatic approach, by trial and error.

Goals of the Programme

In 1986, the Chinese Economic Research Programme was set up at The Chinese University's Centre for Contemporary Asian Studies at the initiative of Prof. T.T. Hsueh in the Department of Economics. It was the predecessor of the current China's Economic Reform and Development Programme at the Hong Kong Institute of Asia-Pacific Studies.

The programme is a long-term research project to investigate the process, contents and results of China's economic reforms, to analyse the pattern of economic development, and to evaluate the various reform proposals and strategies. In the course of this, macroeconomic data can be built up to establish a set of development models and indicators for China.

For the past 10 years, the programme has been striving towards the following goals:

  1. To systematically build up economic data of the PRC using modern economic theories. These data are a prerequisite for a thorough quantitative study of the Chinese economy.
  2. To analyse key issues facing the Chinese economy using modern econometric techniques and a quantitative economic approach. Findings are expected to serve as useful references for academics in both mainland China and the rest of the world.
  3. To study actual economic policies and events and their strategic implications.

The Chinese partners of the research have included the Beijing Institute of Information and Control; the Institute of Quantitative and Technical Economics at the Chinese Academy of Social Sciences; and the Department of National Accounts Statistics (formerly the Department of Statistics on National Economic Balances) of the State Statistical Bureau.

Research results will be made available to sinologists and students of the field, whereby clarifying misconceptions about the macroeconomic development and potential of China. The programme will also serve as a forum for the exchange of views between scholars in China, Hong Kong and the rest of the world.

Economic Development by Region

One of the key projects under the programme is entitled 'China's Regional Economic Development'. Financially supported by the Hong Kong Institute of Asia-Pacific Studies and the University, the project won a research grant of HK$253,000 from the Research Grants Council in August 1990.

Undertaken by Prof. T. T. Hsueh, the project spanned over two years, during which various aspects of China's regional development were thoroughly studied. These include the development patterns of 30 provinces and municipalities directly under the central government and autonomous regions (PMARs); the problem of inequality among the PMARs; regional development by factor analysis; development between core and peripheral regions; balanced and unbalanced strategies for regional development; interregional flow of national income; regional structural changes in the pre- and post- reform periods; the distributional relationship between central and local public finances; tertiary sector development at the regional level; appraisal of regional industrial development in the Third Line; and spatial changes in the Pearl River Delta.

Three international conferences have been held on the University campus to discuss research findings. They are 'China's National Economic Development'(1988), 'Productivity, Efficiency and Reform in China's Economy'(1992), and 'China's Regional Economic Development'(1993). The conferences were attended by scholars and experts from China, the United States, Australia, Taiwan, and Hong Kong. Research findings have also been published in article and book forms (see list below).

Future Direction

The programme was fortunate enough to gain a private donation of HK$ 500,000 from Messrs. M.H. Wong, W.C. Hong and Y.M. Lam in 1992. In the coming years, the emphasis of research will shift to three new topics:

China's National Economic Accounting System

The objective is to build a macroeconomic data bank for the PRC by drawing up detailed accounts of the national income, an input-output table, a flow-of-funds table, a balance-of-payments table, and a national assets and liabilities table. By presenting data systematically and comprehensively, inherent economic variables and their interrelations can be elucidated.

A Thorough Quantitative and Qualitative Analysis of the Key Issues Facing the Chinese Economy

The key issues in question include cost structure and price, industrial structure and economic growth, human capital and economic development, inflation, unemployment, agricultural development and food security, foreign trade and its regime, fiscal system, banking and capital market, natural resources and environment, and social security. Modern econometric techniques will be applied to the analysis of data in the macroeconomic data bank.

An Integrated System of National Income Accounts for Natural Resources and the Environment

The existing national economic accounting system contains only produced economic assets. Researchers will try to enlarge the system to cover non-produced economic assets, i.e., natural resources and environmental assets. The former includes oil reserves, land use in agriculture, and livestock management and utilization, while the latter includes air, water (also ground water loss), soil erosion, and forests. By establishing an integrated national income accounting system for natural resources and environmental assets, researchers can further analyse micro issues such as the depletion and reevaluation of oil reserves, the appraisal of land use, soil and water conservation, deforestation, and air and water pollution.

Part of the World Economy

China's impressive economic development in recent years is indicative of the enormous potential of its economy. In analysing the status quo as well as in planning for the future, scientific methodology will not only contribute to the setting up of the appropriate economic system but also to China's intergration into the international economy.

References (Books only)
    A.In English
  1. Chan, Chun-kwong, Tien-tung Hsueh & Chiu-ming Luk (eds.), China's Regional Economic Development, Hong Kong: Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong, 1996, Research Monograph No. 30, 460pp.
  2. Hsueh Tien-tung, Patterns of Guangdong's Development in the 1980s (Manuscript, prepared for publication).
  3. Hsueh Tien-tung & Li Qiang (eds.), China's National Income in Theory and Practice (in progress).
  4. Hsueh Tien-tung, Li Qiang & Liu Shucheng (eds.), China's Provincial Statistics, 1949-1989, Boulder, Colorado, USA & Summertown, Oxford, UK: Westview Press, 1993, 595 pp.
  5. Hsueh Tien-tung, Sung Yun-wing & Yu Jingyuan (eds.), Studies on Economic Reforms and Development in the People's Republic of China, Hong Kong: The Chinese University Press & New York: St. Martin's Press, 1993, 372 pp.
  6. Tsui, Kai-yeun, Hsueh, Tien-tung & Rawski, Thomas G. (eds.), Productivity, Efficiency and Reform in China's Economy, Hong Kong: Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong, 1995, Research Monograph No. 20, 433 pp.

    B. In Chinese

  7. Li, Jingwen, Zheng, Yuxin & Hsueh, Tien-tung (eds.), Studies on China's Productivity Issues, Beijing: Social Sciences Literature Publishing House, 1993, 407 pp.
  8. Liu, Shucheng, Li, Qiang & Hsueh, Tien-tung (eds.), Studies of China's Regional Economic Development, Beijing: China's Statistical Publishing House, 1994, 364 pp.
  9. Yu, Jingyuan, Hsueh, Tien-tung & Shi, Ruohua (eds.), Studies on Economic Reforms and Development in China, Beijing: The Commercial Press, 1990, 394 pp.

    C.Book Reviews

  10. Ho, Samuel P.S. (University of British Columbia), Book reviews on Hsueh, Li & Liu (eds.), China's Provincial Statistics, 1949-1989, in Pacific Affairs, 67, 1, Spring 1994, pp. 161-162.
  11. Ma, Guonan (Australian National University), Book reviews on Hsueh, Sung & Yu (eds.), Studies on Economic Reforms and Development in the People's Republic of China, in The China Quarterly, December 1994, No. 140, pp.1174-1176.
  12. Schran, Peter (University of Illinois), Book reviews on Hsueh, Li & Liu (eds.), China's Provincial Statistics, 1949-1989, in China Review International, 2, 1, Spring 1995, pp. 127-128.
  13. Weimer, Calla (University of Hawaii), Book reviews on Hsueh, Sung & Yu (eds.), Studies on Economic Reforms and Development in the People's Republic of China, in Asia Pacific Economic Literature, 8, 2, November 1994, pp. 79-80.
  14. Huang, Guo Bo (City University of Hong Kong), Book reviews on Hsueh, Sung & Yu (eds.), Studies on Economic Reforms and Development in the People's Republic of China, in Hong Kong Journal of Social Sciences, No.2, Autumn 1993, published by Oxford University Press, pp. 210-216 (in Chinese).

Prof. Hsueh Tien-tung received his Ph.D. from the University of Colorado in 1969 and joined The Chinese University of Hong Kong in 1971. Currently professor in the Department of Economics at the University, Prof. Hsueh is also programme director at the Hong Kong Institute of Asia-Pacific Studies, and executive member of the editorial board of Twenty-First Century, a bimonthly magazine published by the University's Institute of Chinese Studies. Prior to joining the University, Prof. Hsueh taught at National Taiwan University (1965-1971), and then at Peking University during a sabbatical leave (1985-86); was research fellow at Harvard University (1977-78) and Nagoya University (1993); and served as consultant to the World Bank (1981, 1982), the Asian Productivity Organization (1984-85), and the Asian Development Bank (1988-89).