Year: 1990
Type: article
Abstract: In 1985 the World Bank published an economic report on China. Together with its annexes and staff working papers it is the most extensive overview of the Chinese economy ever published. It is probably no exaggeration to say that even the Chinese leadership has never had such a comprehensive report on its desks. But it is not merely the tremendous amount of facts and figures that makes this report so special. Its importance lies in the direct intervention of the World Bank in the development debate in China with a distinct set of policy suggestions. The latest Chinese Five-Year Plan is to some extent a product of discussion with the World Bank. “China's ultimate economic objective is to catch up with the developed countries, while maintaining a socialist system in which the benefits of prosperity are widely shared,” the report says. Yet how could China maintain a socialist system if it were to follow the advice of an institution whose suggestions are based on neoclassical liberalism? As if to prove this point World Bank president Barber Conable in March 1988 in Beijing told journalists that in that year China would begin to decontrol grain prices in trial experiments in a few areas. This means that the price of the grain sold to urban consumers will no longer be fixed at low, subsidized levels. Instead, wages are to be raised to compensate for extra cost. To ease the transition, the World Bank will lend $300 million to support the policy. This will mark the first time the Bank has become involved in an important policy reversal in a socialist country. The Bank has otherwise only funded specific development projects.
Author: Wolfgang Deckers
Language: English
Field: Social Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W2331721520