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1、China'sTransitiontoaMarketEconomyYingyiQianDepartmentofEconomicsUniversityofMarylandandJinglianWuDevelopmentResearchCenterTheStateCouncilofthePeople'sRepublicofChinaRevised:May2000AbstractChina'stwo-decadereformsince1979hasevolvedintwostageswiththeNove
2、mber1993decisionmarkingaturningpoint.Theessenceofthisdecisionistoreplacetheplanningsystemwithamodernmarketsystem.Weexaminetheprocessofchangeinthemind-setoftheleadershipandanalyzeitspolitical,economic,andintellectualbasis.Wethenevaluatetheprogressesmade
3、duringthefirstfiveyears(1994-98).Toinvestigatetheremainingchallenges,wechoosetofocusonwhatweregardasthecoreissue:establishmentofafreeandcompetitiveenterprisesystembychangingthegovernment-businessrelationshiptoanarm's-lengthtype.Threenecessarytasksare:(
4、i)transformingstate-ownedenterprises;(ii)promotingprivateenterprises;and(iii)establishingtheruleoflaw.Ineach,weassessthecurrentstatusandanalyzetheopportunitiesanddifficultiesforfuturedevelopment.PaperpreparedfortheConferenceonPolicyReforminChinaattheCe
5、nterforResearchonEconomicDevelopmentandPolicyReform(CEDPR),StanfordUniversity,onNovember18-20,1999.Thefindings,interpretations,andconclusionsexpressedinthispaperareentirelythoseoftheauthors.TheydonotnecessarilyrepresenttheviewsoftheChinesegovernment.Th
6、eauthorsaregratefultoPieterBottelier,NicholasHope,T.N.Srinivasan,andotherconferenceparticipantsforhelpfulcommentsanddiscussions."Itwasthebestoftimes,itwastheworstoftimes,itwastheageofwisdom,itwastheageoffoolishness,itwastheepochofbelief,itwastheepochof
7、incredulity,itwastheseasonofLight,itwastheseasonofDarkness,itwasthespringofhope,itwasthewinterofdespair,wehadeverythingbeforeus,wehadnothingbeforeus,wewereallgoingdirecttoHeaven,wewereallgoingdirecttheotherway,......"--CharlesDickens,ATaleofTwoCities1.
8、IntroductionBytheendof1998,China'seconomicreformhasgonethroughtwofulldecades.China'stransitionfromaplannedtoamarketeconomyhasoftenbeenportrayedasagradualandexperimentalprocess,orinDengXiaoping'swidelyquotedphrase:"crossingtheriverbygrop
