China’s New Industrialization Strategy
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China’s New Industrialization Strategy

Was Chairman Mao Really Necessary?

Y. Y. Kueh

Deng Xiaoping’s economic strategy is widely regarded as a complete anathema to Mao’s, but this study strongly argues that without the material foundations laid by Mao, it would have been very difficult for Deng to launch his reform and open-door policy. Deng basically shared Mao’s aspirations and approach in pursuit of China’s industrialization, and this had in fact helped to condition him to the successful gradualist methodology. Deng lost patience at times and resorted to the ‘big bang’ strategy, only to fail miserably. Taken together, the book tells a new story about the economics of China’s transition. This is a highly thought-provoking study, blending institutional and convincing statistical analysis.
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Chapter 13: The Quest for WTO Entry

Y. Y. Kueh


* WHAT WAS AT STAKE? There seems no doubt that, by 1984–85, the platform for pursuing or expanding the open-door strategy was seen from the Chinese perspective to be already firmly in place, after the initial experiments with trade reforms and FDI intake were completed (as discussed in the previous chapter). China therefore ventured to apply for admission to the World Trade Organization in 1986. Note that the application had, indeed, taken place in tandem with the promulgation of the October 1984 Resolution for gradually replacing ‘mandatory planning’ with ‘guidance planning’ and ‘market regulation’. In fact, the application was also synchronized with the first wave of domestic price liberalization, which began in 1985. These all represented bare prerequisites to qualify for WTO member status. There is also no doubt, however, that with a WTO membership China aspired to take advantage of a stable multilateral global trading system for further enhancing foreign exchange earnings in support of, but hopefully without compromising, the pursuit for an independent industrialization drive. Nevertheless, the Chinese quest for WTO entry entailed a 14-year ordeal of hard and at times frustrating negotiations with major trading partners, the United States in particular. The latter insisted, interestingly, on China being admitted, rightly or wrongly, as an industrialized member, while the Chinese authority strongly argued for the status of a developing country. This would have of course profound implications for the crux of the issues involved. Should the US course prevail, China’s import tariffs would have to be lowered,...

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