Chapter 9: Growth Imperatives, Economic Efficiency and ‘Optimum Decentralization’
9. Growth imperatives, economic eﬃciency and ‘optimum decentralization’* THE SEARCH FOR AN ‘OPTIMUM’ SOLUTION’ All the policy signs emanating from China following the crushing of the Tiananmen Square protests of mid-June 1989 point clearly to a ‘backlash’ to the ten-year-old programme of economic reforms. There is little doubt that the new policy measures are more than a matter of how to enhance the ‘ﬁght inﬂation’ campaign launched in September 1988. The perceived need for re-strengthening economic controls is most clearly spelled out by none other than Yao Yilin, the veteran central planner, who until December 1989 was chairman of the powerful State Planning Commission. Shortly prior to his departure, Yao granted a prominent Chinese-American journalist a rare interview in which he stressed the need for renewed centralized ﬁnancial and allocative controls over the economy (DGB, 23 December 1989). At the same time, the Chinese leadership has, however, also repeatedly stated that enterprise reforms will continue to be ‘intensiﬁed’ (shenhua) by way of the continuing campaign of economic retrenchment (Zhang Yanning, 1990; Li, 1990). This ‘intensiﬁcation’ can literally only be taken to imply continued decentralization or some mild modiﬁcation of the existing reform measures as the means to solve the persistent problems of ailing enterprise performance. While the term may appear to be semantically confusing, the message should be clear enough for students conversant with the perennial search by all the Soviet-type economies since the early 1960s for an ‘optimum’ decentralization. Speciﬁcally, this decentralization should...
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