- David Burton, Wanda Tseng, Kalpana Kochhar, Hoe Khor, and Dubravko Mihaljek
- Published Date:
- September 1994
© 1994 International Monetary Fund
Library of Congress Cataloging-in-Publication Data
Economic reform in China: a new phase / Wanda Tseng . . .[et al.].
- p. cm.—(Occasional Papers (International Monetary Fund),
- ISSN 0251-6365; 114)
- Includes bibliographical references.
- ISBN 1-55775-421-7
- 1. China—Economic Policy—1976- 2. Foreign exchange—China.
3. Monetary policy—China. 4. Fiscal policy—China. I. Tseng, Wanda. II. Series.
(US$12.00 to full-time faculty members and students at universities and colleges)
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- Glossary of Abbreviations
- I. Introduction
- II. Exchange and Trade System Reforms
- Trade System in 1992–93
- Exchange System in 1992–93
- Summary and Assessment of Reforms Through 1993
- Current Reform Program
- Box 1. Foreign Exchange Balancing Requirement for Foreign-Funded Enterprises
- III. Monetary Policy and Financial Sector Reforms
- IV. Fiscal System Reforms
- Recent Trends in Public Finance
- Evolving Fiscal Policy Framework
- Weaknesses of the Fiscal Policy Framework
- Reform Plans
- Box 2. Revenue Shares of the Central and Local Governments
- V. Investment System Reform
- VI. State Enterprise Reform
- I. Summary of Structural Reforms
- II. Money, Activity, and Prices in China: An Analysis of Causality
- III. Import Demand in China
- IV. The Demand for Money in China
- V. Summary of New Tax System
- I. 1. Selected Macroeconomic Indicators
- II. 2. Comparison of Tariff Systems of Selected Countries
- III. 3. Structure of the Financial System, 1992
- IV. 5. State Budgetary Operations
- 6. Reconciliation of Chinese and Government Finance Statistics (GFS) Definitions of State Budgetary Operations
- 7. Revenue and Expenditure Trends, 1983–93
- 8. Structure of Tax Revenue
- 9. Budgetary Contribution of the State-Owned Enterprise (SOE) Sector
- 10. Vertical Fiscal Balance of the Central and Local Governments
- 11. Revenue and Expenditure of the Central and Local Governments
- V. 12. Total Fixed Asset Investment: By Sources of Financing
- VI. 13. Selected Indicators of State-Owned Enterprises’ Financial Performance
- II. 14. Summary Results of VAR1
- IV. 21. Long-Run Currency Demand
- I. 1. Macroeconomic Cycles: Key Indicators
- II. 2. Exchange Rate Developments, 1988–July 1994
- III. 3. Factors Contributing to Changes in Reserve Money
- IV. 5. Main Budgetary Trends
- VI. 10. Share of Gross Industrial Output Value by Ownership
- II. 11. Causal Mapping of VAR1
- III. 14. Commodity Composition of Imports
- IV. 17. Monetary Aggregates
The following symbols have been used throughout this paper:
… to indicate that data are not available;
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist.
– between years or months (e.g., 1991–92 or January–June) to indicate the years or months covered, including the beginning and ending years or months;
/ between years (e.g., 1991/92) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.
This Occasional Paper discusses China’s current reform program to transform its economy to a fully market-based system; the strategy for this new phase of reform was adopted during the Third Plenum of the Fourteenth Central Committee in November 1993. The paper is based largely on research papers prepared in connection with the 1993 Article IV consultation with China, updated to reflect developments through mid-1994.
The authors would like express their appreciation for the assistance provided by the Chinese authorities during the consultation and subsequent discussions. They also wish to thank Yusuke Horiguchi for valuable comments and support and Douglas Scott for insightful views, especially on the foreign exchange balancing requirement of foreign-funded enterprises. The technical assistance work of colleagues in the Fiscal Affairs Department, Monetary and Exchange Affairs Department, and the Statistical Department of the IMF is also gratefully acknowledged. Anjali Kumar of the World Bank and Mingwei Yuan, a summer intern in 1993, contributed to the sections on the investment system and SOEs, and the empirical work on China’s import demand, respectively. Thanks are also due to Viola Chou for research assistance and Rosanne Heller for editorial assistance, and Prabha Job and Graciela Martin for secretarial assistance. Tom Walter of the External Relations Department edited the paper for publication and coordinated production.
The opinions expressed in the paper are those of the authors and should not be construed as representing the views of the IMF, its Executive Directors or other IMF staff members, or the Chinese authorities.
Glossary of Abbreviations
Agricultural Bank of China
augmented Dickey-Fuller test
Bank of China
Chinese Communist Party
China Foreign Exchange Trading System
contract responsibility system
China Securities Regulatory Commission
foreign exchange certificates
foreign trade corporations
General Agreement on Tariffs and Trade
Industrial and Commercial Bank of China
international trust and investment companies
Ministry of Foreign Trade and Economic Cooper
nonbank financial intermediaries
National Tax Service
ordinary least squares
People’s Bank of China
People’s Construction Bank of China
rural credit cooperatives
State Administration of Exchange Control
State Development Bank
state industrial corporations
State Planning Commission
State Tax Bureau
trust and investment companies
urban credit cooperatives