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118-473: According to research by Nottle (1993), the re-emergence of securities markets commenced under the introduction of the economic reform programme . The initiative was announced by then party Vice Premier Deng Xiaoping in 1978; under the plan market forces would be brought to bear on the Chinese economy and China's " doors would be opened " to foreign capital and entrepreneurs . Under this economic reform,

236-435: A "People's Inquiry into Privatisation" (2016/17) found that the impact of privatisation on communities was negative. The report from the inquiry "Taking Back Control" made a range of recommendations to provide accountability and transparency in the process. The report highlighted privatisation in healthcare, aged care, child care, social services, government departments, electricity, prisons and vocational education featuring

354-733: A "decisive" role in allocating resources. Xi launched the Shanghai Free-Trade Zone in August 2013, seen as part of the reforms. He has additionally voiced support for SOEs, and under him, at least 288 firms have revised their corporate charters by 2017 to allow the CCP greater influence in corporate management, and to reflect the party line. This trend also includes Hong Kong listed firms, who have traditionally downplayed their party links, but are now "redrafting bylaws to formally establish party committees that previously existed only at

472-541: A cornerstone of the " socialism with Chinese characteristics " and " Deng Xiaoping Theory ". Globally, China's reforms directly influenced the reform policies in Vietnam (" Đổi Mới ") and Laos , whereas North Korea saw China's reforms as a source of political instability and social unrest, accusing China of following a revisionist path . Meanwhile, the New Enlightenment in the 1980s did not proceed, as

590-568: A few large monopolies, were liquidated and their assets sold to private investors. Between 2001 and 2004, the number of state-owned enterprises decreased by 48 percent. During the same period, Jiang and Zhu also reduced tariffs , trade barriers , and regulations ; reformed the banking system; dismantled much of the Mao-era social welfare system; forced the Chinese army (PLA) to divest itself of military-run businesses; reduced inflation; and joined

708-405: A focus in 1988, and this time led to spiraling inflation (the first time it had done so since the 1940s) as well as a backlash that included local protests, bank runs, and panic buying. The Chinese leadership halted these price liberalization plans in fall 1988 and instead focused on austerity, price reform, and retrenchment. Corruption and increased inflation increased discontent, contributing to

826-414: A form of a secured loan and are criticized as a "particularly noxious form of governmental debt". In this interpretation, the upfront payment from the privatization sale corresponds to the principal amount of the loan, while the proceeds from the underlying asset correspond to secured interest payments—the transaction can be considered substantively the same as a secured loan, though it is structured as

944-753: A more cautious and nuanced evaluation of privatization" and that "private ownership alone is no longer argued to automatically generate economic gains in developing economies". According to a 2008 study published in Annals of Public and Cooperative Economics , liberalization and privatization have produced mixed results. Although typically there are many costs associated with these efficiency gains, many economists argue that these can be dealt with by appropriate government support through redistribution and perhaps retraining . Yet, some empirical literature suggests that privatization could also have very modest effects on efficiency and quite regressive distributive impact. In

1062-471: A more conservative approach towards reforms, and began to reverse some of Deng Xiaoping's reforms in 2005. Observers note that the government adopted more egalitarian and populist policies. It increased subsidies and control over the health care sector, increased funding for education, halted privatization, and adopted a loose monetary policy, which led to the formation of a U.S.-style property bubble in which property prices tripled. The privileged state sector

1180-486: A natural and inevitable societal correction emerges to undermine the contradictions of capitalism. This was the case in the 2000 Cochabamba protests . Privatization in Latin America has invariably experienced increasing push-back from the public. Mary Shirley from The Ronald Coase Institute suggests that implementing a less efficient but more politically mindful approach could be more sustainable. In India,

1298-659: A number of experiments have been conducted over the part decades in order to facilitate the development of securities markets. To further improve the economic efficiency of the Chinese securities markets, eventually the Stock Exchange Executive Council (SEEC) was formed in March 1989 to create a nationwide treasury bond trading system , the Securities Trading Automated Quotations System (STAQs), which

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1416-454: A percentage of GDP. China's government slowly expanded recognition of the private economy, first as a "complement" to the state sector (1988) and then as an "important component" (1999) of the socialist market economy . In the 1990s, Deng allowed many radical reforms to be carried out. Deng also elevated reformer Zhu Rongji from Party secretary of Shanghai to Vice Premier in 1991, and later into Politburo Standing Committee in 1992. In 1993,

1534-498: A planned economy was not the only way to develop socialism and that prior policies restricting the commodity economy had hindered socialist development. After the Decision , reform focused on building a socialist planned commodity economy with Chinese characteristics. Controls on private businesses and government intervention continued to decrease, notably in the agrifood sector which saw relaxation of price controls in 1985 and

1652-399: A precedent for privatizing other parts of the economy. Reforms were also implemented in urban industry to increase productivity. A dual-price system was introduced, in which (State-owned enterprise reform 1979) state-owned industries were allowed to sell any production above the plan quota, and commodities were sold at both plan and market prices, allowing citizens to avoid the shortages of

1770-612: A result Deng replaced Hua as the new paramount leader of China at the 3rd plenary session of the 11th Central Committee of the CCP in December 1978, when the "Reform and Opening" of China officially began. At the same time, the truth criterion discussion also triggered the New Enlightenment movement in mainland China which lasted over a decade, promoting democracy , humanism and universal values such as human rights and freedom . The "thought liberation" encouraged by

1888-556: A sale. This interpretation is particularly argued to apply to recent municipal transactions in the United States, particularly for fixed term, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years. It is argued that this is motivated by "politicians' desires to borrow money surreptitiously", due to legal restrictions on and political resistance to alternative sources of revenue, viz, raising taxes or issuing debt. Privatization had different outcomes around

2006-478: A specialist in ancient history, posits that economic inequality and wealth concentration in the top percentile "had been made possible by the transfer of state assets to private owners." In Latin America, on the one hand, according to John Nellis's research for Center for Global Development , economic indicators, including firm profitability, productivity, and growth, project positive microeconomic results. On

2124-625: A stock market with high capital. Voucher privatization occurred mainly in the transition economies in Central and Eastern Europe, such as Russia , Poland , the Czech Republic , and Slovakia . Additionally, privatization from below had made important contribution to economic growth in transition economies. In one study assimilating some of the literature on "privatization" that occurred in Russian and Czech Republic transition economies,

2242-741: A survey by the National Commission for Protection of Child Rights (NCPCR) – Utilization of Free Medical Services by Children Belonging to the Economically Weaker Section (EWS) in Private Hospitals in New Delhi, 2011–12: A Rapid Appraisal – indicates under-utilization of the free beds available for EWS category in private hospitals in Delhi, though they were allotted land at subsidized rates. In Australia

2360-412: A transition to "effective private sector owners [of former] state assets". Rather than mainly participating in a market economy, these individuals could prefer elevating their personal status or prefer accumulating political power. Instead, outside foreign investment led to the efficient conduct of former state assets in the private sector and market economy. Through privatization by direct asset sale or

2478-478: A variety of economic reforms termed " socialism with Chinese characteristics " and " socialist market economy " in the People's Republic of China (PRC) that began in the late 20th century, after Mao Zedong 's death in 1976. Guided by Deng Xiaoping , who is often credited as the "General Architect", the reforms were launched by reformists within the ruling Chinese Communist Party (CCP) on December 18, 1978, during

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2596-448: Is influenced by the capital market and the political and firm-specific factors. Privatization through the stock market is more likely to be the method used when there is an established capital market capable of absorbing the shares. A market with high liquidity can facilitate the privatization. If the capital markets are insufficiently developed, however, it would be difficult to find enough buyers. The shares may have to be underpriced, and

2714-590: Is more prevalent in non-privatized sectors. Furthermore, according to the World Bank extralegal and unofficial activities are more prevalent in countries that privatized less. Other research suggests that privatization in Russia resulted in a dramatic rise in the level of economic inequality and a collapse in GDP and industrial output. Russian President Boris Yeltsin 's IMF -backed rapid privatization schemes saw half

2832-543: The Boluan Fanzheng period. A parallel set of political reforms were launched by Deng and his allies in the 1980s, but eventually ended in 1989 due to the crackdown on Tiananmen Square protests , halting further political liberalization. The reforms briefly went into stagnation after the 1989 Tiananmen Square protests and massacre , but were revived after Deng Xiaoping's southern tour in 1992. The reforms led to significant economic growth for China within

2950-524: The 2011 revolution , most of the public began to call for re-nationalization, citing allegations of the privatized firms practicing crony capitalism under the old regime. There are various reasons why a government may decide to privatize; commonly due to economic reasons. The economic factors that influence a government's decision to privatize assume this will lower government debt. Studies have shown that governments are more likely to privatise with higher public debt, typically because governments do not have

3068-535: The Conservative government of Margaret Thatcher when many state-run firms were sold off to the private sector. The privatization received very mixed views from the public and the parliament. Even former Conservative prime minister Harold Macmillan was critical of the policy, likening it to "selling the family silver". There were around 3 million shareholders in Britain when Thatcher took office in 1979 , but

3186-583: The European Commission argues that privatisation in Europe had mixed effects on service quality and has achieved only minor productivity gains, driven mainly by lower labour input combined with other cost cutting strategies that led to a deterioration of employment and working conditions. Meanwhile, a different study by the commission found that the UK rail network (which was privatized from 1994 to 1997)

3304-595: The National People's Congress adopted the landmark Corporation Law. It provides that in state owned enterprises , the state is no more than an investor and controller of stock and assets. Pursuant to the Corporation Law, private and foreign investment in such enterprises must be below 49%. The law also permitted state firms to declare bankruptcy in the event of business failure. In the beginning, Chen supported Deng, carried out and implemented many of

3422-614: The Revolutions of 1989 introduced non-communist governments. Freedom House's privatization index, 1998 and 2002 Freedom House 's privatization index rated transition countries from 1 (maximum progress) to 7 (no progress). The table below shows the privatization index for various Eastern European countries in 1998 and 2002: The largest public shares offering in France involved France Télécom . Egypt undertook widespread privatization under Hosni Mubarak . Following his overthrow in

3540-602: The Shanghai Stock Exchange was reopened after being closed by Mao 40 years earlier, while the Shenzhen Stock Exchange was also founded in December 1990. In contrast to the approach of Deng, conservative elders led by Chen Yun called to strike a balance between too much laissez-faire market economy and retaining state control over key areas of the economy. Chen Yun helped preserve the economy by preventing policies that would have damaged

3658-651: The World Trade Organization . These moves invoked discontent among some groups, especially laid-off workers of state enterprises that had been privatized. The domestic private sector first exceeded 50% of GDP in 2005 and has further expanded since. Also in 1999, China was able to surpass Japan as the largest economy in Asia by purchasing power parity (PPP) values. However, some state monopolies still remained, such as in petroleum and banking. CCP general secretary Hu Jintao and premier Wen Jiabao took

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3776-446: The de facto leader, Deng's policies faced opposition from party conservatives but were extremely successful in increasing the country's wealth. Major reforms (including rural decollectivization, SOE reform, and rural health care reform) almost always began first as decentralized local experiments subject to intervention from high level Communist Party officials before they were more widely adopted. In 1979, Deng Xiaoping emphasized

3894-401: The demutualization of a mutual organization , cooperative , or public-private partnership in order to form a joint-stock company . Separately, privatization can refer to the purchase of all outstanding shares of a publicly traded company by private equity investors, which is more often called "going private" . Before and after this process the company is privately owned, but after

4012-457: The neoauthoritarianism also exist, and some scholars have also proposed the " China Model " of development. The success of China's economic policies and the manner of their implementation resulted in immense changes in Chinese society in the last 40 years, including greatly decreased poverty while both average incomes and income inequality have increased, leading to a backlash led by the more ideologically pure New Left . Scholars have debated

4130-667: The private sector , and the women in the public sector are more likely to be unionized than those in the private sector. In Chile, women are disproportionately affected by the privatization of the pension system because factors such as "women's longer life expectancy, earlier retirement age, and lower rates of labor-force participation, lower salaries" affect their ability to accumulate funds for retirement which leads to lower pensions. Low-income women face an even greater burden; Anjela Taneja, of Oxfam India says "The privatization of public services...implies limited or no access to essential services for women living in poverty, who are often

4248-436: The " Boluan Fanzheng " period, especially after Deng and his reformist allies rose to power with Deng replacing Hua Guofeng as the paramount leader in December 1978. By the time Deng took power, there was widespread support among the elite for economic reforms. From 1978 to 1992, Deng described reform and opening up as a "large scale experiment" requiring thorough "experimentation in practice" instead of textbook knowledge. As

4366-676: The " Peaceful Evolution " from the West . This was especially true after the Revolutions of 1989 in Europe and around the time of the dissolution of the Soviet Union in 1991. In early 1992, then retired paramount leader Deng Xiaoping embarked on his celebrated southern tour , during which he, with strong support from the Chinese military, ordered that "those who do not promote reform should be brought down from their leadership positions". Deng dissuaded people from debating over whether China

4484-495: The " Shenzhen speed " of development as well as the success of the special economics zones. Besides Deng Xiaoping himself, important high-ranking reformists who helped carry out the reforms include Hu Yaobang , then General Secretary of Chinese Communist Party , and Zhao Ziyang , then Premier of the People's Republic of China . Other leaders who favored Deng's reforms include Xi Zhongxun (the father of Xi Jinping ), Wan Li , Hu Qili and others. Another influential leader

4602-468: The 1975 reform agenda of Deng Xiaoping . Hua made national economic development a matter of the highest priority and emphasized the need to achieve "liberation of productive forces." He "combined Soviet-style big push industrialization with an opening up to the capitalist world" and under his leadership, China opened its first Special Economic Zone and launched major efforts to attract foreign direct investment. Economic reforms began in earnest during

4720-485: The 1989 Tiananmen Square protests and massacre and a conservative backlash after that event which ousted several key reformers and threatened to reverse many of Deng's reforms. The events of 1988 and 1989 led to the imprisonment or exile of many reformist officials. However, Deng stood by his reforms and in 1992, he affirmed the need to continue reforms in his southern tour . Thanks to his encouragement, in November 1990

4838-572: The CCP held in 1987. However, the Tiananmen Square massacre in 1989 ended both the political reforms and the New Enlightenment movement in China, sending the overall "Reform and Opening" program into stagnation. Between 1989 and 1991, there were fears and concerns within the CCP that further reforms may turn China into a capitalist country, and the CCP new leadership under general secretary Jiang Zemin shifted its focus to preventing

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4956-537: The Chinese government, though bounded by the " Four Cardinal Principles " proposed by Deng in 1979, subsequently became the bedrock for the reforms. Planned economy as well as the Maoist policies imposed during the Cultural Revolution were gradually dismantled, and the theory of a " primary stage of socialism " was proposed as the theoretical basis of the political report to the 13th National Congress of

5074-424: The Maoist era. Moreover, the adoption of Industrial Responsibility System 1980s further promote the development of state-owned enterprise by allowing individuals or groups to manage the enterprise by contract. Private businesses were allowed to operate for the first time since the CCP takeover, and they gradually began to make up a greater percentage of industrial output. Price flexibility was also increased, expanding

5192-701: The Nazi Party." Great Britain privatized its steel industry in the 1950s, and the West German government embarked on large-scale privatization, including sale of the majority stake in Volkswagen to small investors in public share offerings in 1961. However, it was in the 1980s under Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States that privatization gained worldwide momentum. Notable privatization attempts in

5310-608: The Russian population fall into destitution in just several years as unemployment climbed to double digits by the early to mid 1990s. A 2009 study published in The Lancet medical journal has found that as many as a million working men died as a result of economic shocks associated with mass privatization in the former Soviet Union and in Eastern Europe during the 1990s, although a further study suggested that there were errors in their method and "correlations reported in

5428-690: The Taoist clergy that a strong ruler was virtually invisible. During the Renaissance , most of Europe was still by and large following the feudal economic model. By contrast, the Ming dynasty in China began once more to practice privatization, especially with regards to their manufacturing industries. This was a reversal of the earlier Song dynasty policies, which had themselves overturned earlier policies in favor of more rigorous state control. In Britain,

5546-406: The UK included privatization of Britoil (1982), the radioactive-chemicals company Amersham International (1982), British Telecom (1984), Sealink ferries (1984), British Petroleum (gradually privatized between 1979 and 1987), British Aerospace (1985 to 1987), British Gas (1986), Rolls-Royce (1987), Rover Group (formerly British Leyland , 1988), British Steel Corporation (1988), and

5664-446: The United States, facilitated China's exports to such countries, and thereby contributed to China's subsequent rapid economic growth. Under the leadership of Yuan Geng , the "Shekou model" of development was gradually formed, embodied in its famous slogan Time is Money, Efficiency is Life , which then widely spread to other parts of China. In January 1984, Deng Xiaoping made his first inspection tour to Shenzhen and Zhuhai, praising

5782-671: The academia and intellectual circle in mainland China became divided in the 1990s, forming two major schools of thought : the Liberalism and the New Left . The Liberalism school argued that China should continue its reform and opening, further developing market economy while pushing forward political reforms for human rights, freedom, democracy, rule of law and constitutionalism ; high-ranking Chinese officials including Chinese Premier Zhu Rongji and Premier Wen Jiabao have expressed various degree of support over this view. On

5900-417: The ambiguous political status of Taiwan . Some analysts have also added that the reform era has been scaled down significantly during the leadership of current CCP General Secretary Xi Jinping when the reformists lost power, citing that Xi has reasserted state control over different aspects of Chinese society, including the economy. After three decades of reform, China's economy experienced one of

6018-401: The approach to price liberalization and whether China should adopt an approach consistent with shock therapy —sudden price liberalization – or a more gradual approach. But in 1986, the latter approach won out. "Confronted with the diverse, authoritative warnings about the unforeseeable risks of imposing the shock of price reform and the uncertainty about its benefits," Premier Zhao Ziyang and

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6136-612: The assumption that foreign investment would play a major role. In post- reunification East Germany, by the end of June 1992, the Treuhandanstalt had privatized 8,175 companies, with 5,950 left on hand (4,340 remaining to be sold and the remainder to be liquidated). June 1992 was also when the last East German on the board of the Treuhand left. By the end of 1994, Treuhand had sold almost everything, having only 65 firms left to privatize as of December 1994. More than 80% of

6254-445: The authors identified three methods of privatization: "privatization by sale", "mass privatization", and "mixed privatization". Their calculations showed that "mass privatization" was the most effective method. However, in economies "characterized by shortages" and maintained by the state bureaucracy, wealth was accumulated and concentrated by "gray/black market" operators. Privatizing industries by sale to these individuals did not mean

6372-669: The bond market, and increased the national currency renminbi 's global role, helping it to join IMF's basket of special drawing right . His administration has also pursued a debt-deleveraging campaign, seeking to slow and cut the unsustainable amount of debt China has accrued during its economic growth. Xi's administration has also reoriented the economy to increase self-reliance, and accordingly launched two campaigns; Made in China 2025 and China Standards 2035, which have sought to scale up and displace US dominance in various high-tech sectors, though publicly China de-emphasized these plans due to

6490-570: The bureaucratic regulations and interventions that hampered economic growth. These regions became engines of growth for the national economy. On January 31, 1979, the Shekou Industrial Zone of Shenzhen was founded, becoming the first experimental area in China to "open up". In July 1979, China adopted its first Law on Joint Venture Using Chinese and Foreign Investment. This law was effective in helping to attract and absorb foreign technology and capital from advanced countries like

6608-596: The buyout its shares are withdrawn from being traded at a public stock exchange . The term privatizing first appeared in English, with quotation marks, in the New York Times , in April 1923, in a translation of a German speech referring to the potential for German state railroads to be bought by American companies. In German, the word Privatisierung has been used since at least the 19th century. Ultimately,

6726-598: The cage the bird [the economy] is free to fly as he wishes." Chen and some other conservative leaders including Li Xiannian never visited Shenzhen, the leading special economic zone championed by Deng. In October 1984, the Party adopted its Decision on the Reform of the Economic System , marking a major shift in the thinking of Chinese policymakers with regard to market mechanisms. The Decision acknowledged that

6844-784: The context of the privatization of services or government functions, where private entities are tasked with the implementation of government programs or the performance of government services. Gillian E. Metzger has written that: "Private entities [in the US] provide a vast array of social services for the government; administer core aspects of government programs; and perform tasks that appear quintessentially governmental, such as promulgating standards or regulating third-party activities." Metzger mentions an expansion of privatization that includes health and welfare programs, public education, and prisons. The history of privatization dates from Ancient Greece , when governments contracted out almost everything to

6962-512: The cost of bureaucracy was one of the reasons for the fall of the Roman Empire . Perhaps one of the first ideological movements towards privatization came during China 's golden age of the Han dynasty . Taoism came into prominence for the first time at a state level, and it advocated the laissez-faire principle of Wu wei (無為), literally meaning "do nothing". The rulers were counseled by

7080-714: The countries suggest that a large segment of the public is dissatisfied with or have negative views of privatization in the region. In the 1990s, the governments in Eastern and Central Europe engaged in extensive privatization of state-owned enterprises in Eastern and Central Europe and Russia, with assistance from the World Bank , the U.S. Agency for International Development, the German Treuhand , and other governmental and non-governmental organization . Nippon Telegraph and Telephone 's privatization in 1987 involved

7198-416: The de- collectivization of agriculture , the opening up of the country to foreign investment , and permission for entrepreneurs to start businesses. However, a large percentage of industries remained state-owned. The second stage of reform, in the late 1980s and 1990s, involved the privatization and contracting out of much state-owned industry. The 1985 lifting of price controls was a major reform, and

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7316-578: The economy entered into a period of stagnation, and after the death of Mao Zedong , the CCP leadership decided to abandon Maoism and turn to market-oriented reforms to salvage the stagnant economy. In September 1976, Mao Zedong died, and in October, Hua Guofeng together with Ye Jianying and Wang Dongxing arrested the Gang of Four , putting an end to the Cultural Revolution . Hua's break with Cultural Revolution era economic policies were consistent with

7434-512: The economy increasing by 9.5% a year. Hu Jintao and Wen Jiabao 's administration took a more conservative approach towards reforms, regulated and controlled the economy more heavily after 2005, reversing some reforms. Before Deng Xiaoping's reforms, China's economy suffered due to centrally planned policies, such as the Great Leap Forward and the Cultural Revolution , resulting in stagnation, inefficiency, and poverty. Prior to

7552-411: The economy. Xi has circulated a policy called dual circulation , meaning reorienting the economy towards domestic consumption while remaining open to foreign trade and investment. Since 2021, his administration has formulated the three red lines policy that aimed to deleverage the heavily indebted property sector. In September 2020, the CCP announced that it would strengthen United Front work in

7670-466: The establishment of the household responsibility system , and there was small-scale privatization of state enterprises which had become unviable. A notable development was the decentralization of state control, leaving local provincial leaders to experiment with ways to increase economic growth and privatize the state sector. Township and village enterprises , firms nominally owned by local governments but effectively private, began to gain market share at

7788-647: The expense of the state sector. With the help of Yuan Geng , the first joint-stock commercial bank in China, the China Merchants Bank , and the first joint-stock insurance company in China, the Ping An Insurance , were both established in Shekou . In May 1984, fourteen coastal cities in China including Shanghai, Guangzhou and Tianjin were named " Open Coastal Cities (沿海开放城市)". A significant economic debate during this period concerned

7906-547: The famines which killed tens of millions during the Great Leap Forward . Deng responded by decollectivizing agriculture and emphasizing the household-responsibility system , which divided the land of the People's communes into private plots. Under the new policy, peasants were able to exercise formal control of their land as long as they sold a contracted portion of their crops to the government. This move increased agricultural production by 25 percent between 1975 and 1985, setting

8024-776: The first attempt at a social welfare analysis of the British privatization program under the Conservative governments of Margaret Thatcher and John Major during the 1980s and 1990s, Massimo Florio points to the absence of any productivity shock resulting strictly from ownership change. Instead, the impact on the previously nationalized companies of the UK productivity leap under the Conservatives varied in different industries. In some cases, it occurred prior to privatization, and in other cases, it occurred upon privatization or several years afterward. A 2012 study published by

8142-436: The general direction of the reforms until Chen died in 1995. A key feature of Chen's ideas was to use the market to allocate resources, within the scope of an overall plan. Some reforms of the early 1980s were, in effect, the implementation of a program that Chen had outlined in the mid-1950s. Chen called this the "birdcage economy (鸟笼经济/鳥籠經濟)". According to Chen, "the cage is the plan, and it may be large or small. But within

8260-485: The goal of " Four Modernizations " and further proposed the idea of " xiaokang ", or " moderately prosperous society ". The achievements of Lee Kuan Yew to create an economic success in Singapore had a profound effect on the CCP leadership in China. Leaders in China made a major effort, especially under Deng Xiaoping, to emulate his policies of economic growth, entrepreneurship, and subtle suppression of dissent. Over

8378-582: The group level." In other dimensions, according to Ray Dalio , the Xi era has also been marked by economic opening, greater market-oriented decision-making and discontinuation of support for poorly managed state-owned enterprises. Xi has increased the power of CCP bodies in economic decision-making, decreasing the influence of the State Council and the premier. His administration made it easier for banks to issue mortgages , increased foreign participation in

8496-488: The influential reforms that made a generation of Chinese richer. But later, Chen realized that the state still needed an active iron hand involvement in the market to prevent the private sector from becoming untamable. Chen's criticism of Deng's later economic reforms was widely influential within the CCP and was reflected in the policies of China's leaders after Deng. Chen's theories supported the efforts of Jiang Zemin and Hu Jintao to use state power to provide boundaries for

8614-414: The interests of special interest groups in the government bureaucracy. Although the economy grew quickly during this period, economic troubles in the inefficient state sector increased. Heavy losses had to be made up by state revenues and acted as a drain upon the economy. Inflation became problematic in 1985, 1988 and 1992. Privatizations began to accelerate after 1992, and the private sector grew as

8732-623: The justification for large-scale crackdowns and regulations towards the perceived "excesses" of several sectors, most prominently tech and tutoring industries. During the Boluan Fanzheng period, Deng Xiaoping and Hu Yaobang launched the large-scale " 1978 Truth Criterion Discussion " and endorsed the ideology of "practice is the sole criterion for testing truth". The truth criterion discussion successfully helped Deng's reformist ideology win against Hua Guofeng 's governing philosophy " Two Whatevers " ("Whatever Chairman Mao said, we will say and whatever Chairman Mao did, we will do"), and as

8850-483: The largest share offering in financial history at the time. 15 of the world's 20 largest public share offerings have been privatizations of telecoms. In 1988, the perestroika policy of Mikhail Gorbachev started allowing privatization of the centrally planned economy. Large privatization of the Soviet economy occurred over the next few years as the country dissolved . Other Eastern Bloc countries followed suit after

8968-453: The leadership ultimately rejected shock price reform. Zhao had accepted the argument that the basic concern in economic reform was energizing enterprises. By late summer, what started under the rubric of "coordinated comprehensive package reform" had been diluted to an adjustment in the price of steel (although its price was both important had carried symbolic weight) as well as partial tax and financial reform. Radical price reform again became

9086-450: The lifting of protectionist policies and regulations soon followed, although state monopolies in the commanding heights of the economy such as banking and petroleum remained. In 2001, China joined the World Trade Organization (WTO). Not long after, the private sector grew remarkably, accounting for as much as 70 percent of China's gross domestic product (GDP) by 2005. From 1978 until 2013, unprecedented growth occurred, with

9204-400: The middle of the 1930s. The firms belonged to a wide range of sectors: steel, mining, banking, local public utilities, shipyard, ship-lines, railways, etc. In addition to this, delivery of some public services produced by public administrations prior to the 1930s, especially social services and services related to work, was transferred to the private sector, mainly to several organizations within

9322-467: The more competitive the industry, the greater the improvement in output, profitability, and efficiency. Such efficiency gains mean a one-off increase in GDP , but through improved incentives to innovate and reduce costs also tend to raise the rate of economic growth . More recent research and literature review performed by Professor Saul Estrin and Adeline Pelletier concluded that "the literature now reflects

9440-408: The needed time to wait for a return. Another economic factor that influences this area is the resulting efficiency of SOEs once privatised. Commonly, governments aren’t able to provide the required investments required to ensure profitability for various reasons. These factors may lead to a government deciding to privatize. There are several main methods of privatization: The choice of sale method

9558-446: The ones more in need of these services." The increase in privatization since the 1980s has been a factor in rising income and wealth inequality in the United States. Due to low levels of native capital accumulation in the former Central and Eastern Europe, the rapid privatization preferred by international institutions ( EBRD , IMF , World Bank ) and other foreign banks was a de facto call for international bidding, reflecting

9676-521: The operation of the market, and to mediate the damage that capitalism can do to those who find it difficult to benefit from the free market. Chen's notion of the CPC as a "ruling party" was central to the redefinition of the role of the Party in Jiang Zemin's Three Represents . In 2005, on the occasion of the hundredth anniversary of Chen's birth, the Party press published, over the course of several weeks,

9794-689: The original article are simply not robust." A subsequent body of scholarship, while still controversial, demonstrates that rapid privatization schemes associated with neoliberal economic reforms did result in poorer health outcomes in former Eastern Bloc countries during the transition to markets economies, with the World Health Organization contributing to the debate by stating "IMF economic reform programs are associated with significantly worsened tuberculosis incidence, prevalence, and mortality rates in post-communist Eastern European and former Soviet countries." Historian Walter Scheidel ,

9912-430: The other hand, however, privatisation has been largely met with a negative criticism and citizen coalitions. This neoliberal criticism highlights the ongoing conflict between varying visions of economic development. Karl Polanyi emphasizes the societal concerns of self-regulating markets through a concept known as a "double movement". In essence, whenever societies move towards increasingly unrestrained, free-market rule,

10030-569: The other hand, the New Left argued that capitalism had become prevalent in mainland China with worsening corruption and widening economic inequality , which were common issues in the development of western capitalism, and therefore the New Left criticizes market mechanism and calls for social justice as well as equality, defending some of Mao Zedong 's policies during the Cultural Revolution. Other schools of thought such as

10148-471: The outbreak of a trade war with the U.S in 2018. This is alongside more aggressive pursuit of trade policies, in line with an outlook that sees China move towards taking a more active role in writing the rules of trade. Some analysts have also added that the reform era has been scaled down significantly during the leadership of Xi when the reformists lost power, citing that Xi has reasserted state control over different aspects of Chinese society, including

10266-519: The peg to the U.S. dollar was broken, leading the yuan to rise by 31% against the dollar from 2005 to 2012. China's economic growth has averaged around 10% under Hu, while the economy surpassed the United Kingdom, France, Germany and Japan. Under CCP general secretary Xi Jinping and his administration , the CCP has sought numerous reforms, with the Third Plenum of the 18th Central Committee announcing that "market forces" would begin to play

10384-433: The private sector by establishing more party committees in the regional federations of industry and commerce (FIC), and by arranging a special liaison between FIC and the CCP. Since 2021, Xi has promoted the term common prosperity , a term which he defined as an "essential requirement of socialism", described as affluence for all and said entailed reasonable adjustments to excess incomes. Common prosperity has been used as

10502-611: The private sector. In the Roman Republic private individuals and companies performed the majority of services including tax collection ( tax farming ), army supplies ( military contractors ), religious sacrifices and construction. However, the Roman Empire also created state-owned enterprises —for example, much of the grain was eventually produced on estates owned by the Emperor. David Parker and David S. Saal suggest that

10620-464: The private sector. In the 1990s, privatization revenue from 18 Latin American countries totaled 6% of gross domestic product. Private investment in infrastructure from 1990 and 2001 reached $ 360.5 billion, $ 150 billion more than in the next emerging economy. While economists generally give favorable evaluations of the impact of privatization in Latin America, opinion polls and public protests across

10738-887: The privatization of common lands is referred to as enclosure (in Scotland as the Lowland Clearances and the Highland Clearances ). Significant privatizations of this nature occurred from 1760 to 1820, preceding the Industrial Revolution in that country. The first mass privatization of state property occurred in Nazi Germany between 1933 and 1937: "It is a fact that the government of the National Socialist Party sold off public ownership in several state-owned firms in

10856-575: The privatized businesses were bought by foreigners (chiefly West Germans – 75%). Romania's first privatization took place on 3 August 1992. There was "very little" privatization during 1992: only 22 state-owned enterprises were privatized. The pace picked up throughout the following year, with more than 260 companies privatized. Four of the 22 enterprises privatized in 1992 were sold to foreign investors. In 1993, 265 companies were privatized, followed by 604 in 1994. Two companies were sold to foreign investors during this period, one each in 1993 and 1994. At

10974-445: The proceedings of a symposium discussing Chen's contributions to CCP history, theory and practice. Although Deng died in 1997, reforms continued under his handpicked successors, Jiang Zemin and Zhu Rongji , who were ardent reformers who also abided by Chen Yun advice to keep the reforms steady and keep the state still in charge of key areas. In 1997 and 1998, large-scale privatization occurred, in which all state enterprises, except

11092-448: The public sector into the private sector. It is also sometimes used as a synonym for deregulation when a heavily regulated private company or industry becomes less regulated. Government functions and services may also be privatised (which may also be known as "franchising" or "out-sourcing"); in this case, private entities are tasked with the implementation of government programs or performance of government services that had previously been

11210-465: The purview of state-run agencies. Some examples include revenue collection, law enforcement , water supply , and prison management . Another definition is that privatization is the sale of a state-owned enterprise or municipally owned corporation to private investors; in this case shares may be traded in the public market for the first time, or for the first time since an enterprise's previous nationalization . This type of privatization can include

11328-465: The reason for the success of the Chinese "dual-track" economy , and have compared it to attempts to reform socialism in the Eastern Bloc and the Soviet Union; as well as to the growth of other developing economies. Additionally, these series of reforms have led to China's status as a great power and a shift of international geopolitical interests towards China, especially in matters relating to

11446-474: The reforms promoted by Deng, in contrast to the top-down approach of the Perestroika in the Soviet Union, is considered an important factor contributing to the success of China's economic transition. The first reforms began in agriculture . By the late 1970s, food supplies and production had become so deficient that government officials were warning that China was about to repeat the " disaster of 1959 ",

11564-531: The reforms, the Chinese economy was dominated by state ownership and central planning. From 1950 to 1973, Chinese real GDP per capita grew at a rate of 2.9% per year on average, albeit with major fluctuations. This placed it near the middle of the Asian nations during the same period, with neighboring countries such as Japan, South Korea, Singapore and then rival Chiang Kai-shek 's Republic of China (ROC) outstripping mainland China's rate of growth. Starting in 1970,

11682-428: The regional water authorities (mostly in 1989). After 1979, council house tenants in the UK were given the right to buy their homes (at a heavily discounted rate). One million purchased their residences by 1986. Such efforts culminated in 1993 when British Rail was privatized under Thatcher's successor, John Major . British Rail had been formed by prior nationalization of private rail companies. The privatization

11800-425: The sale of the state-owned companies. Those with political connections unfairly gained large wealth, which has discredited privatization in these regions. While media have widely reported the grand corruption that accompanied those sales, according to research released by the World Bank there has been increased operating efficiency, daily petty corruption is, or would be, larger without privatization, and that corruption

11918-504: The sales may not raise as much capital as would be justified by the fair value of the company being privatized. Many governments, therefore, elect for listings in more sophisticated markets, for example, Euronext , and the London , New York and Hong Kong stock exchanges. Governments in developing countries and transition countries more often resort to direct asset sales to a few investors, partly because those countries do not yet have

12036-551: The service sector. At the same time, in December 1978, Deng announced a new policy, the Open Door Policy , to open the door to foreign businesses that wanted to set up in China. For the first time since the Kuomintang era, the country was opened to foreign investment . Deng created a series of Special Economic Zones , including Shenzhen , Zhuhai and Xiamen , for foreign investment that were relatively free of

12154-411: The stock market, bidders compete to offer higher prices, generating more revenue for the state. Voucher privatization, on the other hand, could represent a genuine transfer of assets to the general population, creating a sense of participation and inclusion. A market could be created if the government permits transfer of vouchers among voucher holders. Some privatization transactions can be interpreted as

12272-434: The subsequent sale of state-run firms saw the number of shareholders double by 1985. By the time of her resignation in 1990, there were more than 10 million shareholders in Britain. Privatization in Latin America was extensive in the 1980s and 1990s, as a result of a Western liberal economic policy. Companies providing public services such as water management , transportation, and telecommunications were rapidly sold off to

12390-419: The successive decades; this phenomenon has since been seen as an "economic miracle". In 2010, China overtook Japan as the world's second-largest economy by nominal GDP , before overtaking the United States in 2016 as the world's largest economy by GDP (PPP) . The Chinese Communist Party (CCP) carried out the market reforms in two stages. The first stage, in the late 1970s and early 1980s, involved

12508-402: The voices of workers, community members and academics. Some reports show that the results of privatization are experienced differently between men and women for numerous reasons: when public services are privatized women are expected to take on the health and social care of dependents , women have less access to privatized goods, public sector employs a larger proportion of women than does

12626-524: The word came to German through French from the Latin privatus . The term reprivatization , again translated directly from German ( Reprivatisierung ), was used frequently in the mid-1930s as The Economist reported on Nazi Germany's sale of nationalized banks back to public shareholders following the 1931 economic crisis. The word became common in the late 1970s and early 1980s as part of UK prime minister Margaret Thatcher's economic policies . She

12744-648: The world's biggest booms. Agriculture and light industry have largely been privatized, while the state still retains control over some heavy industries. Despite the dominance of state ownership in finance, telecommunications, petroleum and other important sectors of the economy, private entrepreneurs continue to expand into sectors formerly reserved for public enterprise. Prices have also been liberalized. Privatization Privatization (rendered privatisation in British English ) can mean several different things, most commonly referring to moving something from

12862-556: The world. Results of privatization may vary depending on the privatization model employed. According to Irwin Stelzer , "it is somewhere between difficult and impossible to separate the effects of privatisation from the effects of such things as trends in the economy". According to research performed by the World Bank and William L. Megginson in the early 2000s, privatization in competitive industries with well-informed consumers, consistently improved efficiency. According to APEC ,

12980-430: The years, more than 22,000 Chinese officials were sent to Singapore to study its methods. Generally, reforms in this period started with local experiments that were adopted and expanded elsewhere once their success had been demonstrated. Officials generally faced few penalties for experimenting and failing and those who developed successful programs received nation-wide praise and recognition. The bottom-up approach of

13098-403: Was Chen Yun , regarded by some as the second most powerful person in China after Deng with more conservative ideology of the reforms. Though Deng Xiaoping is credited as the architect of modern China's economic reforms, Chen was more directly involved in the details of its planning and construction, and led a force that opposed many of the reforms from Deng's side. The two sides struggled over

13216-481: Was always private, but heavily regulated, which becomes less regulated through a process of deregulation . The term may also be used descriptively for something that has always been private, but could be public in other jurisdictions. There are also private entities that may perform public functions. These entities could also be described as privatized. Privatization may mean the government sells state-owned businesses to private interests, but it may also be discussed in

13334-410: Was controversial, and its impact is still debated today , as doubling of passenger numbers and investment was balanced by an increase in rail subsidy . This has been reverted by the same party in Britain in the early 2020s with the state-owned Great British Railways . The United Kingdom's largest public share offerings were privatizations of British Telecom and British Gas during the 1980s under

13452-505: Was drawing on the work of the pro-privatization Member of Parliament David Howell , who was himself drawing on the Austrian-American management expert Peter Drucker 's 1969 book, The Age of Discontinuity . The word privatization may mean different things depending on the context in which it is used. It can mean moving something from the public sphere into the private sphere, but it may also be used to describe something that

13570-651: Was established in December 1990. This China -related article is a stub . You can help Misplaced Pages by expanding it . Chinese economic reform Mainland China Hong Kong (pro-Beijing) Macau (pro-Beijing) Republic of China (Taiwan, pro-Beijing) Mainland China Hong Kong (pro-Beijing) Macau (pro-Beijing) Republic of China (Taiwan, pro-Beijing) Hong Kong (pro-Beijing) Mainland China Hong Kong (pro-Beijing) The Chinese economic reform or Chinese economic miracle , also known domestically as reform and opening-up ( Chinese : 改革开放 ; pinyin : Gǎigé kāifàng ), refers to

13688-609: Was most improved out of all the 27 EU nations from 1997 to 2012. The report examined a range of 14 different factors and the UK came top in four of the factors, second and third in another two and fourth in three, coming top overall. Nonetheless, the impact of the privatisation of British Rail has been the subject of much debate, with the stated benefits including improved customer service, and more investment; and stated drawbacks including higher fares, lower punctuality and increased rail subsidies. Privatizations in Russia and Latin America were accompanied by large-scale corruption during

13806-414: Was on a capitalist or socialist path, calling that "development is of overriding importance"; his pragmatic remarks reignited people's enthusiasm for economic reforms in mainland China, therefore resuming the "Reform and Opening" program. Subsequently, Deng's " cat theory " ("I don't care if the cat is black or white, so long as it catches mice") became an underlying ideology guiding the economic reforms, as

13924-401: Was the primary recipient of government investment, which, under the new administration, promoted the rise of large "national champions" which could compete with large foreign corporations. Nevertheless, the share of SOEs in the total number of companies have continued to fall, dropping to 5%, though their share of total output remained at 26%. Exchange rates for the yuan were also liberalized and

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