Learning Resource Pack
on
Integrated Humanities (S4-5):
Core Module III –
Development of Modern China
Personal, Social and Humanities Education Section
Curriculum Development Institute
The Education and Manpower Bureau
HKSAR
2004
Contents
Preface
iii
Core Module III
Development of Modern China
1
Issue 1
How desirable are the current strategies of China’s
economic development?
Rural reforms and urban development
The reform of state-owned enterprises, enterprises of
2
Key point a
Key point b
3
76
the non-public sector and China’s entry into the World
Trade Organization (WTO)
Issue 2
Key point a
Key point b
What is the impact of reform and opening-up policies
on China’s future development?
Political development
Sustainable development
i
126
127
149
ii
Preface
Among its recent proposals for education reform in Hong Kong, the Education
Commission recommends the provision of ‘a broad senior secondary curriculum to
enable students to acquire experiences in various key learning areas, construct a broad
knowledge base and enhance their ability to analyze problems’ (Education
Commission, September 2000). The Integrated Humanities (S4-5) represents a
response to this proposal. The Integrated Humanities is made up of four core modules,
namely Personal Development, Characteristics of Hong Kong Society, Development
of Modern China and Globalization; it also has three optional modules, that is
Religion and Life, Human-Environment Relationship and Relationship between Mass
Media and Modern Culture. Students studying this curriculum can build a broad
knowledge base and a rich repertoire of skills and abilities.
The Learning Resource Pack on Integrated Humanities (S4-5): Core Module
III – Development of Modern China is part of a series of learning and teaching
materials being developed by the Education and Manpower Bureau (EMB) for the
implementation of the new subject.
The Department of History of the Chinese University of Hong Kong has been
commissioned by EMB to prepare this booklet.
Schools are encouraged to adapt the materials for educational use according to
their contexts. NO part of the documents shall be duplicated for commercial purposes.
iii
We welcome feedback and suggestions from teachers. Please send them to:
Chief Curriculum Development Officer (Personal, Social and
Humanities Education)
Curriculum Development Institute
Education and Manpower Bureau
13/F Wu Chung House
213 Queen’s Road East
Wan Chai
Hong Kong
or by e-mail to pshe@emb.gov.hk, or by fax on 2573 5299 / 2575 4318.
For further enquiries, please contact the PSHE Section, Curriculum Development
Institute (CDI) on 2892 5735 or 2892 5859.
iv
Core Module III
Development of
Modern China
1
Issue 1
How desirable are the current strategies of
China’s economic development?
2
Key Point a
Rural reform and urban development
3
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Teachers’ References
Since the founding of the People’s Republic of China in 1949, the country had been
adopting a planned economy, emphasizing public ownership of resources and the
planning of economic affairs by the state. In 1978 the late Chinese leader, Deng
Xiaoping, announced a policy of reform and opening-up, thereby officially beginning
the era of economic transformation. Ever since, the leaders in the Central People’s
Government have continuously stressed that China is moving along the path of a
socialist market economy, i.e. an economy regulated by both the market and the state.
Economic reforms on the mainland started from rural areas and expanded to the cities.
To a certain extent, rural economic reforms have improved the lives of the peasants
and increased their income. However, natural disasters and backward agricultural
techniques make it difficult to further raise living standards. On the other hand, the
development of the urban areas and the coastal region is so successful and at such
tremendous pace that the gap between the rural areas and the urban areas has become
increasingly wide.
In terms of economic development, infrastructure, education and foreign investment,
there is now great differences between the urban areas/coastal region and the rural
areas. To rural residents, the urban areas and the coastal region are a big attraction
with many opportunities. They move into cities and the coastal region in the hope of
finding employment, and this gives rise to massive migration. Although migrant
workers bring labour to these areas, they also create many problems in society such as
law and order and education.
The Central People’s Government is actively dealing with the problems caused by
economic development, such as improving rural infrastructure in order to attract
foreign investment and bring business opportunities to rural areas, and developing
small towns and cities in order to absorb surplus rural labour. To solve the problems
caused by migrant workers and improve their living conditions, the government has
carried out a number of policies, e.g. relaxing the restrictions on household
registration requirements for urban and rural areas. However, because of the large size
of the country and dense population, the geographical conditions, population,
advantages and problems in different regions are not the same. Complete solutions
would take a long time to develop.
4
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Teachers should note that unless otherwise stated, the unit of currency used in this
Module is Renminbi, i.e. the yuan.
Suggested Learning Objectives
Suggested questions
for enquiry
Learning objectives
Remarks
What paths has China undertaken in
To understand the economic
Later topics will discuss
development of the mainland: a China’s entry into the
economic
development since
the establishment of
the People’s Republic of China?
[2 periods]
closed economic system in
World Trade Organization
1949-1978 and an open
and its impact.
economic system since 1978;
To become familiar with the
recent economic development of
the mainland through analyzing
various economic indicators;
To gain some preliminary ideas
about the mainland’s economic
development after its entry into
-
the World Trade Organization
(WTO).
What are the
differences between
planned economy and
market economy?
What is socialist
market economy?
[2 periods]
-
To understand the meaning of a
planned economy, a market
economy and a socialist market
economy;
To analyze the advantages and
disadvantages of a planned
economy and a market
Before talking about the
mainland, ask students:
Which type of economic
system does Hong Kong
practise? What are the
characteristics of this
system? By first dealing
economy;
with a market economy,
To discuss the reasons for the
students might have a
adoption of a socialist market
better grasp of a planned
economy by the mainland and its economy and a socialist
effects on the national economy market economy.
and the people.
5
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested questions
for enquiry
What progress has
China’s economic
reform made since
1978?
[1 – 2 periods]
Learning objectives
-
-
-
-
Remarks
To understand the strategy of
Students might not know
economic reform: reform of the the meaning of “laid-off”.
rural areas followed by the urban Let them read pp.
areas;
252-259 of China
To become familiar with the
Remembers by Zhang
changing roles of industries and Lijia and Calum MacLeo.
agriculture in the national
economy;
Using examples, to analyze the
effects of economic reforms on
the peasants, the urban
population and state-owned
enterprises;
To gain some preliminary ideas
about the problems created by
economic reforms, e.g. massive
migrant workers, workers
laid-off and the wide gap
between rural areas and cities.
What rural reform has the government
launched?
[2 periods]
-
-
To become familiar with the
rural reform on the mainland:
the abolition of the commune
system and planned production
according to state instructions;
peasants can now work their
land in accordance with their
own wishes;
To gain a preliminary
understanding of the
development of village and
township enterprises;
To analyze the challenges to the
rural economy with the
mainland’s accession to the
6
The next set of questions
discusses the
development of village
and township enterprises.
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested questions
for enquiry
Learning objectives
-
WTO;
To discuss whether current
economic measures, e.g. the
production of green food and
industrialized agriculture, can
help protect the livelihood of the
peasants and maintain economic
stability in rural areas.
What are the factors that drive China to
develop township and
To analyze the factors
contributing to the development
of village and township
village enterprises?
[2 periods]
enterprises;
To gain some preliminary ideas
about what village and township
enterprises are and their
development in different
regions;
To discuss the effects of village
-
-
-
Remarks
and township enterprises on the
peasants and the rural economy;
To discuss whether village and
township enterprises can make
the peasants stay in the rural
areas.
What are the major characteristics of
China’s urbanization -
To understand the meaning of
Before going into
cities and urbanization;
discussion, divide
To analyze the characteristics of students into groups and
and city reforms?
[2 periods]
urban development on the
mainland;
To understand China’s
urbanization;
To discuss whether urbanization
is the right direction for the
mainland’s future development.
-
7
ask them to select one
city on the mainland. Ask
them to collect and
organize data and write a
report about the
geographical conditions,
economic development,
population and
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested questions
for enquiry
Learning objectives
Remarks
infrastructure of the
selected city. The
representative of each
group presents the
group’s report in class.
What are reasons for migrant workers?
[1 –2 periods]
-
To understand the meaning of
migrant workers;
To analyze the reasons for the
emergence of migrant workers:
(pull factors) peasants are
attracted to work in cities
because of more job
opportunities there; (push
factors) the development of the
rural economy is slow and the
living standard of peasants is
low. Peasants find rural areas
unattractive.
What problems do
migrant workers
bring?
[1 –2 periods]
-
How can the issue of migrant workers and
the resulting
problems be tackled?
[1 –2 periods]
To understand the conditions of
migrant workers in the cities;
To analyze the problems caused
by migrant workers.
To understand the policies
implemented by the Central
People’s Government and local
people’s governments to deal
with the issue of migrant
workers and the problems they
cause, e.g. legislation to protect
the rights of migrant workers,
facilitating the entry of migrant
workers into cities by relaxing
the restrictions on household
registration requirements for
rural and urban areas,
8
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested questions
for enquiry
Learning objectives
-
Remarks
accelerating the development of
the rural economy to get the
peasants to stay in the rural
areas, and increasing the speed
of urbanization to absorb the
surplus rural labour force;
To analyze the effectiveness of
these measures.
How can the
divergences between
urban and rural areas
To analyze whether recent
measures carried out by the
government, e.g. increasing
be narrowed?
[1 – 2 periods]
investment in rural areas and
Ask students to share
improving rural infrastructure, their impression of places
can improve the lives of the
they have visited.
peasants and the rural economy
and narrow the gap in economic
and social development between
rural and urban areas.
9
Some students may have
visited cities and rural
areas on the mainland.
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
What paths has China undertaken in economic development since the
establishment of the People’s Republic of China?
Source 1
In June 1950 the Third Plenary Session of the Seventh Central Committee of the
Communist Party of China was held. The Land Reform Law of the People’s
Republic of China was approved at this meeting. The spirit of this law was to
confiscate the land, animals, farming tools, other production resources and
surplus food and houses belonging to landowners and redistribute them to
landless peasants or peasants with little land. After the implementation of land
reform, the Central People’s Government launched the Great Leap Forward,
which sought high-speed production and massive output. This led to cadres
exaggerating production figures everywhere. In fact, there was a decline in the
total value of agricultural production. Compared with 1959, the total value of
agricultural production in the whole country in 1960 declined by 12.6%.
Summarized from:
劉國新、賀耀敏編。
《中華人民共和國歷史長編》
。南寧：廣西人民出版社，1994，卷二，頁 53。
金春明。《中華人民共和國簡史》。香港：開明書店，1992，頁 103。
10
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 2
In 1953 an estimated two-thirds of the total production came from farmland,
handicraft businesses and factories owned by individuals. But by 1957 these areas
contributed to only less than 3% of the total production. The state consolidated its
control over the economy by expanding the system of direct state ownership to
include all modern industries and by reorganizing private handicraft businesses
into communes, hence exerting indirect control over such businesses … By the
end of 1956 more than 95% of farming households had become members of
communes for agricultural production and the system of private ownership on
land, animals and farming tools had been eradicated.
Citation from:
麥克法誇爾、費正清主編。
《劍橋中華人民共和國史：革命的中國的興起 1949-1965》
。北京：中
國社會科學出版社，1998，頁 163。
Source 3
Bian Shaofeng was a member of the Xiaomiao production team, under the Liuji
commune in Anhui Province. The Liuji commune was set up around August
1958. Following the establishment of the commune, the communal kitchen was
set up. “… the kitchen started rationing, and food grew less. I didn’t understand
why there was a grain problem, as we had a good harvest that year. It was only
much later that I learned how different levels of leaders exaggerated our harvests
so everything we produced was handed over,” Bian said. At that time, members
of each commune cultivated according to state plan. Each commune was not only
an economic unit but also served as an administrative and welfare unit. All
farming tools and raw materials were owned by everyone and food was rationed.
Bian said that all of the villagers learned not to report deaths in order to get the
dead people’s food rations.
Citation from:
Zhang Lijia and Calum MacLeod. “Bian Shaofeng: The Three Bitter Years”. In China Remembers.
Hong Kong: Oxford University Press, 1999, pp.81-82.
11
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 4
The Third Plenary Session of the Eleventh Central Committee of the Communist
Party of China (1978) first and foremost dealt with agriculture. … It revived and
expanded the autonomy of the communal production teams and restored “private”
plot, family sideline production, collective sideline production and the market
trade. Apart from gradually implementing the household contract responsibility
system, the purchase prices of food and some other agricultural produce were also
raised. Many problems concerning the principles of operation were later resolved,
thereby bringing obvious and rapid changes to agriculture – from the original
stagnancy to a thriving phenomenon.
Citation from:
中國共產黨第十二屆全國代表大會（1982 年 9 月 1 日）上的報告。
《全面開創社會主義現代化建
設的新局面》。載於人民網，中國共產黨第十二次全國代表大會，
<http://www.people.com.cn/BIG5/shizheng/252/5089/5104/index.html> [accessed 26 September
2003]。
Source 5
In 1978 economic reforms commenced under the leadership of Deng Xiaoping …
As rigid price controls were eased on certain goods between 1979 and 1982,
inflation took place. The Four Modernizations – agriculture, industry, science and
technology, and national defence – were China’s blueprint for development.
Foreign technology and capital had to be introduced in order to achieve the Four
Modernizations. In July 1979 four special economic zones were established on
China’s south coast to attract foreign investors.
Citation from:
Zhang Lijia and Calum MacLeod. China Remembers. Hong Kong: Oxford University Press, 1999,
p.175.
12
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
Since the Third Plenary Session of the Eleventh Central Committee of the
Communist Party of China, we regard the opening-up of the country as our basic
long-term national policy and make it a strategy for speeding up the
modernization programmes under socialism. We have achieved obvious results
through practice. We must continue to relax the restrictions and carry out reforms
on the foreign trade system which would both encourage active participation and
unify the principles of dealing with foreigners. We must also actively expand the
scope of Sino-foreign economic and technological exchange and co-operation,
strive to run the special economic zones well and further open our coastal cities.
We should make use of foreign investments and attract foreign investors to the
mainland to set up joint ventures, co-operative ventures and enterprises run by
foreign investors alone.
Citation from:
中國共產黨第十二屆中央委員會第三次全體會議（1984 年 10 月 12 日）
。
《中共中央關於經濟體
制改革的決定》
。載於人民網，中國共產黨第十二次全國代表大會，
<http://www.people.com.cn/BIG5/shizheng/252/5089/5104/index.html> [accessed 27 May 2003]。
Source 7
Since 1992 the mainland of China has become one of the largest recipients of
direct foreign investment in the world, second only to the United States. … Half
of the 100 largest industrial transnational corporations in the world listed in
Fortune magazine have invested in the mainland of China.
Adapted from:
李小健。
〈跨國公司及其中國投資地區的經濟發展〉
。
《二十一世紀》
，期 51，1999 年 2 月，頁 151。
13
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 8
This table shows foreign investment projects in the mainland of China,
1988-1999.
Year
Investment projects (%)
Sino-foreign
Joint Equity
Enterprises
Sino-foreign
Cooperative
Enterprises
Sole Foreign
Investment
Enterprises
Others
1988-1994
64.48
13.60
21.90
0.02
1995
55.27
12.93
31.77
0.03
1996
51.43
11.60
36.91
0.06
1997
42.86
11.30
45.72
0.12
1998
40.95
10.11
48.86
0.08
1999
41.67
9.79
48.47
0.07
Note: “Others” include such formats as co-operative development and foreign investment
share enterprises.
Reference:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》。
北京：經濟管理出版社，2001，頁 448。
14
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 9
This table shows the distribution of investment of 500 transnational corporations
in the mainland of China.
Country/
region
Distribution of investment (%)
Northern
coastal
region
Central
coastal
region
Southern
coastal
region
Central
region
Western
region
USA
39.28
41.44
14.86
9.00
0.54
Japan
41.36
42.40
9.41
4.12
2.71
Europe
35.71
37.50
13.39
11.61
1.79
Others
66.67
25.00
8.33
0
0
Note: Northern coastal region includes Beijing, Tianjin, Hebei, Liaoning and Shandong;
Central coastal region includes Shanghai and Jiangsu; Southern coastal region includes
Guangdong, Fujian, Guangxi and Hainan; Central region includes Heilongjiang, Jilin,
Shanxi, Inner Mongolia, Henan, Anhui, Jiangxi, Hubei and Hunan; Western region
includes Chongqing, Sichuan, Yunnan, Guizhou, Tibet, Shaanxi, Gansu, Qinghai,
Ningxia and Xinjiang.
Reference:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》。
北京：經濟管理出版社，2001，頁 450。
15
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 10
Between 1994 and 1996, the value of average annual output of both heavy and
light industries declined. However, by 1999 and 2000 the value of average annual
output of heavy industries rose. The table below shows the performance of
industries on the mainland in 1999 and January to October 2000.
Year
Growth rate (%)
Total
profits
Total tax
amount
Decline in losses
compared with the
same period in the
Gross
added
Sales
income of
value of
industry
products
1999
8.9
10.2
52.0
9.0
15.2
Jan-Oct,
2000
11.6
22.0
98.7
17.3
13.3
previous year (%)
Adapted from:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》。
北京：經濟管理出版社，2001，頁 41 至 43。
16
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 11
This table shows the economic indicators of China, 1952-2000.
1952
GDP (100
million yuan)
Government
Revenue (100
million yuan)
Total Imports
and Exports
(USD 100
million)
Per Capita
Annual Income
of Rural
Households
(yuan)
Per Capita
Annual Income
of Urban
Households
(yuan)
679
183.7
1978
1995
2000
Average Annual Increase
Rate (%)
1953- 1979- 19961978
1995
2000
3,624.1 57,733 89,404.0 6.1
9.9
8.3
1,121.1 6,809.2 13,380.0
7.2
10.6
16.5
19.4
206.4
2,808.5 4,743.0
9.5
16.6
11.0
57.0
133.6
1,577.7 2,253.0
3.3
8.2
4.7
235.4
316.0
3,893.0 6,280.0
1.4
6.4
5.7
Reference:
中國統計師事務所編。
《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 10 至 11。
國家統計局編。《2001 中國發展報告：中國的「九五」》。北京：中國統計出版社，2001，頁 39
至 42、347。
Source 12
… the economic performance of China during 2002 exceeded expectations.
Official statistics show the economy grew by 8%, led by continued strength in the
industrial and service sector.
Citation from:
The World Bank China Office. China Half-Year Update.
<http://www.worldbank.org.cn/English/Content/04-2003.pdf> [accessed 27 May 2003].
17
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What was China’s economic policy before the reforms of 1978? What economic
problems did the country face then? What was daily life like for the people?

What were the reasons for economic reforms in 1978?

What is meant by “opening-up”? What benefits does opening-up bring to China?

What features characterized the distribution of transnational corporations on the
mainland in the 1990s? What did these features say about China’s economic
development?

What effects did economic reforms and opening-up have on China’s economy and
its people?
18
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested questions for enquiry:
What are the differences between planned economy and market economy? What is
socialist market economy?
Source 1
Category
Resource
allocation
Contents
Market economy:
resources are allocated by a price mechanism
Planned economy (also known as command economy):
the government decides how to allocate resources; no
competition; commodity flows not allowed
Ownership of
resources
Capitalist economy:
a system of private property rights operates; resources are
wholly or mostly owned by individuals
Socialist economy:
resources are wholly or mostly owned by the government
Adapted from:
經濟人網頁。《經濟制度》，<http://econman.uhome.net/Cert/F4/BasicStuff/Types_of_economy.htm>
[accessed 27 May 2003]。
Source 2
A market economy is a system in which production and production resources are
flowed and exchanged on equal and voluntary contractual terms. A planned
economy, on the other hand, is a system in which production and production
resources are flowed and distributed by instructions from the top, not on equal
and voluntary contractual terms.
Citation from:
姜華。《市場與市場秩序的建立（上）》
。復旦大學社會科學基礎部網頁，鄧小平理論，
<http://www.theory.fudan.edu.cn/> [accessed 27 May 2003]。
19
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 3
A market economy is an economic system in which a free market is the platform
for production and commodity exchange. It is both an economic system and an
institution for the operation of the economy. It shows that the market is not only
the hub of the flow of commodities and the operation of the economy, but also the
basis of resource allocation and an invisible regulator (i.e. because of the
existence of the market, there is no need for any regulation and control of
economic activities in society).
A planned economy develops in accordance with the overall economic
development of the country. The state (or society) takes into account the overall
economic situation and formulates in advance a plan for economic development.
The state continuously amends the plan during the process of its implementation,
hence managing and regulating economic activities in society. Like a market
economy, a planned economy is both an economic system and an institution for
the operation of the economy. But a planned economy is opposite to a market
economy, for the former organizes and manages economic activities in society in
accordance with the overall economy. It is also a visible regulator and control
over economic activities aimed at achieving effective exploitation and utilization
of resources.
Adapted from:
侯廷智。《對計劃經濟和市場經濟的歷史反思（上）》
，
<http://www.shenmeijingji.com/jingji/jjms/jhjj02.htm> [accessed 27 May 2003]。
20
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 4
A market economy maintains fair operation and resolves conflicts by the rule of
law. It has the following characteristics:



The government or people and institutions with power are not allowed to
interfere with the bargaining process.
Commodity production is to satisfy market needs and not in accordance with
state plan. Production is only regulated spontaneously by a price mechanism.
Producers must be guided by market needs in their competition with others.

Citizens and the state, different localities and various sectors are the main
bodies of economic activities with equal rights and benefits. Conflicts
between these bodies easily arise as a result of a crisscross of economic
relationships. All conflicts must be resolved by arbitration or litigation.

By implementing a market economy, the mainland market becomes part of
the entirely free international market. This market is not subject to and does
not permit interference by any government or people and institutions with
power.
Adapted from:
郭羅基。
《市場經濟是法治經濟》
。載於民主論壇，<http://www.asiademo.org/2000/04/2000429b.htm>
[accessed 27 May 2003]。
21
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 5
The outstanding characteristic of the Chinese economic system between 1952 and
1975 was that it adopted the planned economy of the Soviet Union. Peasants were
the first to find that they had lost their land ownership and become members of
production teams where they had to share the output. State plans replaced the
market and became the method of resource and capital allocation. Banks, internal
trade, external trade and any other important industries all belonged to the state.
Their managers were also appointed by the state. Planners at the top formulated
production plans for enterprises and determined what to produce and what to sell.
Prices only served as a record for the flow of resources and not as the basis of
economic decisions.
Citation from:
Robert F. Dernberger. “The People’s Republic of China at 50: The Economy”. In China Quarterly,
Issue 162 (June 1999), pp.606-607.
22
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
The following are extracts from speeches by Deng Xiaoping on 26 November
1979, 23 October 1985 and 18 – 21 January 1992.
(1979)
It is wrong to maintain that a market economy exists only in a capitalist society
and that there is only “capitalist” market economy. Why can’t we develop a
market economy under socialism? … While maintaining a planned economy as
the mainstay of our economic system, we are also introducing a market economy.
But it is a socialist market economy. …
(1985)
There is no fundamental contradiction between socialism and a market economy.
The problem is how to develop the productive forces more effectively. We used to
have a planned economy, but our experience over the years has proved that
having a totally planned economy hampers the development of the productive
forces to a certain extent. If we combine a planned economy with a market
economy, we shall be in a better position to liberate the productive forces and
speed up economic growth.
(1992)
A planned economy is not equivalent to socialism because there is planning under
capitalism too; a market economy is not capitalism, because there are markets
under socialism too. Planning and market forces are both means of controlling
economic activity.
Citation from:
People’s Daily Online (ed.). Selected Works of Deng Xiaoping,
<http://english.peopledaily.com.cn/dengxp/> [accessed 11 June 2003].
23
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 7
A socialist market economy: definition and characteristics
Definition
With communal ownership of raw materials and resources as the basis, the
system meets the need for modernized production and advanced commodities and
brings out the market’s primary function of allocating resources. Under the
macro-control of the state and in accordance with market rules, activities are
carried out to achieve fair, efficient and unified operation and regulation of the
economy.
Characteristics



A socialist market economy with the communal system as its mainstay;
Autonomy of entrepreneurial behaviour;
The legalization of operation and management.
Adapted from:
安徽電訊培訓網。
《社會主義市場經濟的基本特徵及基本框架》，
<http://www.ahtt.net.cn/jz/gljz/pw/pw210.ppt> [accessed 27 May 2003]。
Source 8
With the communal system as the mainstay, various elements of the economy
co-exist … Bring further changes to the operational mechanism of state-owned
enterprises and establish a modern entrepreneurial system that satisfies the needs
of the market. Set up a unified open market system throughout the country.
Achieve the integration between cities, villages and the market and the link-up of
the mainland market with the international market … Change the duties of the
government in managing the economy and establish a perfect macro-control
system based on indirect control.
Citation from:
中共中央文獻研究室編。
〈中共中央關於建立社會主義市場經濟體制若干問題的決定〉
。《十四大
以來重要文獻選編》。北京：人民出版社，1996，上卷，頁 520。
24
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 9
By the end of 1992, prices fixed by the state constituted less than 15% of the total
purchase price of agricultural produce and shrank to around 30% of the total retail
price of commodities. Currently, only nine types of agricultural produce are
priced at a rate fixed by the state … The types of daily industrial products whose
prices are fixed by the state reduce from several thousands to only 58, and the
types of state-managed means of production and transportation with prices fixed
by the state also decrease from 737 to only 89.
Citation from:
高尚全。《中國市場經濟縱論》
。香港：三聯書店（香港）有限公司，1998，頁 224。
Source 10
In 1992 the 14th National Congress of the Communist Party of China confirmed
the establishment of a socialist market economy as the target of the mainland of
China’s economic reforms … In 1994 taxation and financial reforms moved a
great step forward – a floating rate system of the Renminbi based on the market
and sound management was created. In 1996 the Renminbi became exchangeable
in economic accounts … In the beginning of the 1990s the prices of consumer
goods were further liberalized …
Citation from:
張卓元編。
《中國改革開放經驗的經濟學思考》。北京：經濟管理出版社，2000，頁 2。
25
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What is a planned economy? Give examples to explain your answer.

What is a market economy? Give examples to explain your answer.

Briefly describe the respective merits and demerits of a planned economy and a
market economy.

What are the functions of “prices” in a planned economy and a market economy?

What were the problems brought about by the implementation of a planned
economy on the mainland?

Which economic model do you think the mainland is currently practising? What
are the characteristics of this economic model? What are the differences between
this model and a planned economy and a market economy?

Briefly describe the specific measures in the reform programme of state-owned
enterprises.

What effects does a socialist market economy have on the mainland’s economy
and its people?
26
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
What progress has China’s economic reform made since 1978?
Source 1
The basic direction in China’s economic development prior to reform was the
control of resources by the Central People’s Government, investment in
state-owned enterprises and the sale of products at low prices to low-paid city
residents and low-income peasants. Capital was concentrated in the state by
means of profits turned over to it by enterprises … With the reforms, the
government relaxes control on prices and wages and encourages local people’s
governments, enterprises and individuals to raise production efficiency so as to
increase income. Through taxation, the Central People’s Government maintains a
fixed level of revenue for government expenditure. The mainstay of economic
development shifts from the Central People’s Government to local people’s
governments, enterprises and individuals.
Adapted from:
楊沐。〈討論：中國鄉鎮企業的奇蹟是怎樣出現的？——關於 30 個鄉鎮企業調查的綜合分析〉。
出自馬戎等編，
《中國鄉鎮企業的發展歷史與運行機制》
。北京：北京大學出版社，1994，下
冊，頁 1361。
27
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 2
At the initial stage of reform (December 1978 to October 1984) … the emphasis
was on agricultural reform and experiments of reform in certain cities.
… During the stage of full-scale implementation of reform (October 1984 to
February 1992) … the emphasis was on the reform of city economic system with
the enhancement of entrepreneurial vitality as the target … The Hainan Special
Economic Zone and the Pudong New Area in Shanghai were established.
… During the stage of intensive reform (after February 1992), the opening-up of
the economy expanded from coastal areas and areas along rivers to areas along
the frontiers and along major transport routes as well as inland provincial capitals.
The pattern of opening-up in all directions was basically established.
Adapted from:
高尚全。《中國市場經濟縱論》
。香港：三聯書店（香港）有限公司，1998，頁 3 至 4。
28
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 3
Rural reforms started in the late 1970s. Communes, together with communal
kitchens, were abolished. Song Liying is from Dazhai, a village in Shanxi
Province. She was also a leader in her village during the reform period. “The
‘Household Contract Responsibility System’ was introduced to Dazhai in 1983,”
Song said. “It was not equivalent to capitalism. The land still belonged to the
government; a small piece of it would merely be contracted to us … we would
have the freedom to run our own contracted land. Once land was in their hands,
the farmers worked hard. They deducted the amount they had to hand in to the
government, and realized they would get more if they grew more … Gradually
our lives improved, not only due to increases in grain production but also to
opportunities to make money. Before the reform, engaging in any sideline
production was banned … we weren’t allowed to grow anything on our backyard;
we weren’t allowed to produce anything for sale or engage in any kind of trade …
Now, you can do anything you like – raise pigs to eat or sell, make cloth tigers
(the local specialty) and sell them at the market … But I must say, in the 1980s,
even if some people made money, it wasn’t much. Yet the overall living standard
was better. In 1984, with the extra money we had, we bought a small
black-and-white TV set,” Song continued.
Citation from:
Zhang Lijia and Calum MacLeod. “Song Liying: The Red Flag of Dazhai”. In China Remembers. Hong
Kong: Oxford University Press, 1999, pp. 190-192.
29
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 4
As Deng Xiaoping said, let some of the people “get rich first” in order to serve as
an example for others to follow. He would have delighted at the success of the
four brothers of the Liu family, fellow Sichuanese who have pushed to the limit
the reforms Deng has set in motion … The pig-feed mill the brothers founded that
year is now the Hope Group, China’s largest private enterprise, with over 100
subsidiaries and 16,000 employees. The youngest brother, Liu Yonghao, is the
first billionaire in China. “At the end of 1982, when we started from scratch, we
didn’t even dare dream that one day we would have millions to play with,” said
Liu. “Great changes were taking place in China, as reforms began in the
countryside where peasants raised their own animals, while in the cities some
people emerged as small private businessmen,” he said.
Citation from:
Zhang Lijia and Calum MacLeod. “Song Liying: The Red Flag of Dazhai”. In China Remember. Hong
Kong: Oxford University Press, 1999, pp. 224-225.
30
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 5
This diagram shows the agricultural output value and the non-agricultural output
value in 1978 and 1994.
%
74.3
80
68.9
1978
1994
70
60
50
40
31.1
25.7
30
20
10
0
Agricultural output
value
Non-agricultural
output value
Reference:
中國統計師事務所編。《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 160。
31
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
Following the introduction of a market economy, big changes occurred in the
relationships between the financial contributors of enterprises and the enterprises
themselves, between the government and enterprises and a host of other
relationships. Enterprises gradually moved towards becoming independent
producers and managers of commodities, operating autonomously and assuming
sole responsibility for their own profits and losses. The government will not
normally interfere directly with the daily production, operation and management
affairs of enterprises … An overwhelming majority of enterprises cannot but face
competition from many sources.
Citation from:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》。
北京：經濟管理出版社，2001，頁 488。
Source 7
The gross output value of non-state-owned industry rose from 20% in 1978 to
52% in 1992, while the gross output value of non-state-owned commercial
enterprises increased from 10% in 1978 to 70% in 1992.
Citation from:
高尚全。《中國市場經濟縱論》
。香港：三聯書店（香港）有限公司，1998，頁 280。
32
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 8
In 1998 the total number of enterprises which had been confirmed by the State
Council of China as testing points for the establishment of a modern
entrepreneurial system was 2,700. An overwhelming majority of these enterprises
have carried out corporate reforms. By the end of 2000, a total of 430 enterprises
designated by the state as key enterprises (out of 520) have implemented
corporate reforms, among which 282 enterprises have either wholly or partially
changed to limited liability corporations or share-holding corporations limited.
Diversification of investment has been achieved and the framework of a modern
entrepreneurial system has begun to be established. The structure of corporate
management has basically been formed. At the same time, protection of the basic
livelihood and re-employment of workers has also been enhanced. By the end of
1998, all state-owned enterprises have set up re-employment service centres.
Unemployed workers and recently unemployed workers of state-owned
enterprises enjoy some protection of their livelihood and six million have been
re-employed.
Note: A corporation is an economic organization with the following elements prescribed by
the state: independent property, a sound organization, a constitution, a fixed arena,
independent capability to undertake civil liability, entitlement to civil rights and responsibility
for civil duties. The merit of setting up a corporate system is that an enterprise with
corporation status acquires independence in respect of civil matters, enabling it to truly
become a commodity producer and manager with autonomous operation and sole
responsibility for its own profits and losses.
Summarized from:
中國國情研究會編。《中國國情報告 1999》
。北京：中華工商聯合出版社，1999，頁 45 至 46。
曾培炎。《2001 年中國國民經濟和社會發展報告》
。北京：中國計劃出版社，2001，頁 315。
33
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 9
This diagram shows the proportion of foreign-invested industry in the total industry
in the mainland of China in 1993, 1996 and 1999.
30
26.1
25.7
24.9
25
19.1
20
18.7
16.6
16
% 15
8.6
10
5
9.1
8.6
8
4.5
0
Number of
enterprises
Gross output value
of industry
Sales Income of
Products
Total fixed assets
Reference:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》。
北京：經濟管理出版社，2001，頁 506。
34
1993
1996
1999
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 10
In respect of financial reform … In accordance with the principles of economy,
reasonableness, simplicity and efficiency, state-owned commercial banks are
either removed or merged and their branch activities regulated. More than 80 city
commercial banks were established in different localities in order to accelerate
the development of local financial institutions. There is separation between
securities trading and banking and a transfer of the supervisory and regulatory
functions on securities from the People’s Bank of China to the China Securities
Regulatory Commission …
Adapted from:
北京大學中國經濟研究中心經濟發展戰略研究組。《中國金融體制改革的回顧和展望》
，2000 年
4 月，<http://www.ccer.edu.cn/workingpaper/paper/c2000005.doc> [accessed 27 May 2003]。
Source 11
According to figures released by the China Securities Regulatory Commission, up
to the end of September of 2002 the total number of listed companies on the
mainland was 1,209, an increase of 49 companies from the end of the previous
year. Their total market value exceeded 450 billion yuan. Among the 1,209 listed
companies, the overwhelming majority (795 companies) were industrial
enterprises. Listed companies have become the pillars of the mainland of China’s
industrial development. Statistics also show that Shanghai is the focal point of
listed companies, with 133 listed companies settling down in the city. Ranking
second are Shandong Province and Shenzhen, each with 70 listed companies.
Citation from:
中安網 – 國際財經知信息，2002 年 11 月 12 日，
<http://finance.anhuinews.com/ahnews/article/20021112/20021100163891_1.html> [accessed 27
May 2003]。
35
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What are the stages in the mainland of China’s reform? What is the main theme of
each stage?

Between 1978 and 1994 the output value of agriculture declined but the output
value of non-agriculture rose. What does this reflect?

State-owned enterprises are moving towards “autonomous operation”. What does
this suggest?

The proportion of foreign-invested industries has risen. What does this show?

How important is financial reform to the economic development of the country?
36
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
What rural reform has the government launched?
Source 1
The following is an extract from the speech by Deng Xiaoping on 12 June 1987.
After the Third Plenary Session of the Eleventh Central Committee [of the
Communist Party of China (1978)], we decided to carry out rural reform, giving
more decision-making power to the peasants and the grass-roots units. By so
doing we immediately brought their initiative into play, and great changes took
place. By diversifying agriculture in accordance with local conditions, the
peasants have grown grain and cash crops in places suited to them and have
substantially increased the output of both. … In the rural reform our greatest
success – and it is one we had by no means anticipated – has been the emergence
of a large number of enterprises run by villages and townships. They were like a
new force that just came into being spontaneously.
Citation from:
People’s Daily Online (ed.). Selected Works of Deng Xiaoping,
<http://english.peopledaily.com.cn/dengxp/> [accessed 11 June 2003].
37
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 2
Ever since the opening-up of the mainland and the implementation of reforms, the
government has done a number of things to speed up rural development. On one
hand, it put great efforts in carrying out reforms of the rural economy. This
included converting the three-tier village communes, production brigades and
production teams into a responsibility system based on production contracts by
the family; developing highly efficient and high-quality agriculture with high
output; establishing an integrated system of agriculture, industry and trade; and
opening-up the market for agricultural by-products. On the other hand, the
government substantially raised the purchase prices of agricultural by-products
and increased the state’s investment in agriculture. For example, government
expenditure on agriculture between 1991 and 1994 reached an accumulative total
of 169.7 billion yuan, which constituted 8.6% of the total government
expenditures in the same period. At the same time, the government also
encouraged technology “to go to the rural areas” …
Citation from:
中國統計師事務所編。《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 159。
Source 3
Beginning from 1985, except for specific types of products, the state no longer
maintains its monopoly on the purchase and redistribution of agricultural
produce. Instead, according to different situations, the state would order by
contract and purchase based on market needs … After the abolition of state
monopoly on purchase and redistribution, agricultural produce is no longer
subject to restrictions imposed by the original division of labour and is allowed to
flow via direct and multiple channels … No unit is permitted to issue production
plans of an instructional nature to the peasants.
Adapted from:
中共中央文獻研究室編。
《十二大以來重要文獻選編》
。北京：人民出版社，1986，中冊，頁 610
至 619。
38
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 4
Song Liying, a leader of Dazhai village in Shanxi Province, said, “Business really
kicked off after 1991, when Guo Fenglian returned after 10 years as our Party
secretary. Guo is a very capable and talented woman … As soon as she came
back, she led us villagers into business. There is plenty of coal in this region, so a
couple of small mines started up. With experience learned from all over the
country, Guo established township and village enterprises, including a sweater
factory and a shirt factory, producing the ‘Dazhai’ brand name. Later, Dazhai set
up a cement factory (a joint venture with Hong Kong), and took over a distillery
to produce ‘Dazhai Spring white spirit’.
Citation from:
Zhang Lijia and Calum MacLeod. “Song Liying: The Red Flag of Dazhai”. In China Remembers. Hong
Kong: Oxford University Press, 1999, p. 193.
Source 5
This table shows the number of employed persons in rural areas in China,
1978-1995.
Item
Total number of employed persons
(10,000 persons)
Average Annual Growth
Rate (%)
1978
1980
1994
1995
1979-1995
National
Total
40,152
42,361
68,090
68,910
3.2
Village
30,638
31,836
44,654
45,052
2.3
Township
and Village
Enterprises
2,827
3,000
12,107
12,862
9.3
Private
enterprises
-
-
316
471
-
Selfemployed
-
-
2,551
3,054
-
Reference:
中國統計師事務所編。《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 47。
39
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
In 2000 every locality and every department actively promoted agriculture and
the rural economy and intensified efforts to build rural infrastructure with water
conservancy as the key and protect the ecosystem and the environment. The total
output of grain for the whole year was 462.51 million tons. The output of other
food products, such as oil, meat and marine products, was also higher than the
previous year.
Citation from:
曾培炎編。
《2001 年中國國民經濟和社會發展報告》
。北京：中國計劃出版社，2001，頁 107。
Source 7
This diagram shows the availability of public facilities in rural areas in China in
1995 and 2000.
80
Telephones
40
95
Paved roads
89
2000
1995
46
Tap water
35
0
20
40
60
80
100
%
Reference:
國家統計局編。
《2001 中國發展報告：中國的「九五」
》
。北京：中國統計出版社，2001，頁 69。
40
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 8
With China’s entry into the World Trade Organization in 2001, agriculture and the
rural economy have to face competition from overseas agricultural produce. The
state has formulated a series of policies designed to increase peasants’ income,
and consolidate and strengthen the foundation of agriculture. These policies
include the production of green food, promoting the development of agriculture
with special features, promoting industrialized agriculture and developing
secondary and tertiary industries in rural areas, increasing employment and other
measures.
Citation from:
曾炎培編。
《2001 年中國國民經濟和社會發展報告》
。北京：中國統計出版社，2001，頁 109 至
110。
41
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

An essential part of rural reforms is the “giving of autonomy to the peasants”.
What do you think this suggests?

What was the relationship between infrastructure and economic development in
rural areas between 1995 and 2000?

What were the changes in rural policies implemented by the state and localities as
reflected by the changes in the priority of building rural infrastructure?

What are the benefits of village and township enterprises to villages and peasants?

What are the effects of the mainland’s entry into the WTO on villages and the
rural economy?

Do you think the current rural reforms carried out by the state can protect
peasants’ livelihood and maintain the stability of the rural economy? Why or why
not?
42
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
What are the factors that drive China to develop township and village enterprises?
Source 1
In 1995 the rural labour force was 449 million … among them 322 million were
engaged in agricultural production. However, there was only 1,424 million
hectares of arable land, i.e. an average of 4.35 hectare for each labourer. The
shortage of land and surplus labour was very serious – a preliminary estimate
showed that surplus rural labourers amounted to more than 100 million. With the
increase in rural labour force and the mechanization and modernization of
agriculture, the number of surplus labourers in rural areas would further increase.
Citation from:
中國統計師事務所編。《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996 年，頁 31。
43
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 2
The household registration system on the mainland, established in the 1950s,
strictly separated urban and rural residents. Urban residents enjoyed various
amenities provided by the state. They also had access to such low-priced services
as housing, education and insurance and were entitled to employment rights in
cities. On the other hand, rural residents not only did not have these benefits and
rights, they were strictly monitored by the public security bureau once they came
into the city … The 1980s was the period in which the growth of per capita
income was the fastest since 1949 … The increase in spending power gave rise to
a large market for the development township enterprises … During the process of
transformation from a planned economy to a market economy in the 1980s,
investment by the Central People’s Government gradually diminished while
investment by private enterprises was still very weak. Local people’s
governments, therefore, became the mainstay of investment … In the
development of village and township enterprises, village (and township)
governments played an important role in every critical step.
Citation from:
楊沐。〈討論：中國鄉鎮企業的奇蹟是怎樣出現的？：關於 30 個鄉鎮企業調查的綜合分析〉
。出
自馬戎等主編，
《中國鄉鎮企業的發展歷史與運行機制》
。北京：北京大學出版社，1994，下
冊，頁 1361、1376 至 1377。
Source 3
This table shows the comparison of the average annual increase of income in
China, 1953-1995.
Per capita annual net income of
rural households (yuan)
Per capita annual income of
urban households (yuan)
Average annual
increase (%)
1953-1978
3.3
Average annual
increase (%)
1979-1995
8.2
1.4
6.4
Reference:
中國統計師事務所編。
《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 10 至 11。
44
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 4
In fact, the development of village and township enterprises was unintentionally
promoted by the Chinese government when it combined various policies in order
to solve some other problems. Firstly, the system of household registration
prevented the migration of rural residents to cities and towns and forced surplus
labour to remain in rural areas. Secondly, scientific knowledge and industrial
technology developed by university and research institutions provided the whole
country with a wide-ranging basic production skills. Thirdly, there is a big market
for village and township enterprises products as a consequence of the shortage
during the long period of a planned economy. … According to official definition,
village and township enterprises include “collective, co-operative and private
enterprises founded by peasants”. Specifically, they include enterprises set up by
villages (or village committees), enterprises set up by townships, enterprises
jointly founded by several families (joint households) and private enterprises.
Citation from:
馬戎等編。
《九十年化中國鄉鎮企業調查》
。香港：牛津大學出版社，1994，頁 ix 至 x 及 6。
Source 5
The reason for the rapid development of village and township enterprises … is
that the lucrative profits tax paid by such enterprises has attracted local people’s
governments to actively promote their development. Take Huantai county in the
city of Zibo, Shandong Province, as an example. The annual income of the county
is about five million yuan, among which three million yuan was profits tax paid
by village and township enterprises. From this, we can see that enterprises have
become the major pillar of income for rural areas.
Adapted from:
葉健民。《中國鄉鎮企業的發展 – 對山東地區的實地觀察》。載於民主黨網頁，
<http://www.dphk.org/database/newsletter/6-9605.htm> [accessed 27 May 2003]。
45
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
Village and township enterprises on the mainland came into being under certain
circumstances … Peasants provide such enterprises with a source of massive and
cheap labour supply … Because of the small scale of village and township
enterprises, they are relatively easy to manage and supervise and their production
efficiency is also high. Besides, compared with city governments, village and
township governments are able to protect the enterprises under their jurisdiction
more effectively and are better able to offer preferential policies and other
measures.
Adapted from:
北京大學中國經濟研究中心。
《中國鄉鎮企業的奇跡》
，1998 年 10 月 21 日，
<http://old.ccer.edu.cn/newsletter/98/070.htm> [accessed 27 May 2003]。
46
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 7
This diagram shows the development of village and township enterprises in
China, 1978-1994.
3000
14000
12,018
Number of units
12000
2500
2,495
Number of employees
10000
2000
8000
6,979
1500
10,000
units
6000
1,223
1000
4000
2,826
500
0
10,000
persons
2000
152
1978
0
1985
1994
Reference:
中國統計師事務所編。
《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 159 至 160。
47
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 8
According to statistics, the output value of village and township enterprises grew
from 49.31 billion yuan in 1978 to 6,891.52 billion yuan in 1995. The average
annual growth rate was more than 20% … The role of village and township
enterprises has moved from the original status of being only a subsidiary of the
rural and national economy to the current status of being the pillar of the rural
economy and a major force in the development of the national economy … But
the great success of village and township enterprises also carries with it many
problems which deserve attention. One of these problems is the serious imbalance
in the level of development of village and township enterprises in different
regions, as shown in the difference between the eastern, central and western
regions. For example, the wage level in the eastern region where village and
township enterprises are well developed is higher than that in the western region.
Citation from:
劉國亮。《中國鄉鎮企業增長與效率》
。北京：經濟科學出版社，2001，頁 2 至 3 及 97。
48
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What does surplus labour in rural China suggest?

How does the household registration system affect the urban and rural economy?
What is its effect on the migration of rural labour to urban areas?

What effect does the rise in per capita income in villages and towns brought about
by the reforms have on the consumer market?

What is the role played by local people’s governments in the development of
village and township enterprises?

Do you think village and township enterprises can lead to diversification of the
rural economy? Give reasons for your answer.

Do you think peasants will benefit from the development of village and township
enterprises? What are the benefits?
49
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
What are the major characteristics of China’s urbanization and city reforms?
Source 1
Healthy and vigorous cities are a component of sustained economic growth. With
the development of a country, the percentage of contribution by cities to the
national income rises steadily. The contribution by city areas constitutes 55% of
the gross national product in low-income countries, whereas it makes up 73% and
85% of the gross national product in middle-income and high-income countries,
respectively.
Citation from:
世界銀行。
《1999／2000 年世界發展報告：邁進 21 世紀》
。北京：中國財政經濟出版社，2000，
頁 120。
Source 2
The Chinese government has decided to play a coordinating role in the
development plans of villages and towns, to strictly control the use of land and to
strengthen the supervision of development projects in villages and towns through
the legal system. Big, medium and small cities, villages and towns will gradually
be kept to appropriate sizes, the overall layout and structure of villages and towns
will be kept reasonable, the development of urban amenities and public utilities
will be accelerated, and urban residential development will be sped up … A
number of well-run towns will be allowed to develop into small cities.
Note: Cities are divided into three types according to the total non-rural population in the
urban area and the suburb. Big cities are cities with a population of more than 500,000;
medium cities are cities with a population of more than 200,000 but less than 500,000; and
small cities are cities with a population of not more than 200,000.
Adapted from:
中國統計師事務所編。
《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 142 至 143。
50
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 3
Urbanization and the growth of a modern economy occur hand in hand. The
higher the per capita gross national product, the higher is the level of
urbanization. By the end of 2002, China had a total of 600 cities (excluding
counties under the jurisdiction of cities) with a total urban population of around
353.44 million. The area of cities totalled 464,772 square kilometres. The level of
urbanization rose from 30.9% in 1999 to 37.66% in 2001. Despite the continuous
rise in the level of urbanization in China, the overall level is still low compared
with the global level of urbanization.
Note: The level of urbanization refers to the proportion of non-rural population in the total
population.
Summarized from:
國家統計局編。
《2001 中國發展報告：中國的「九五」
》
。北京：中國統計出版社，2001，頁 61。
王小星。《中國已有城市 660 個》
。載於中國城市化網，2003 年 5 月 30 日，
<http://www.curb.com.cn/curb/index3.html?oldHtml=AC_text/AC2.htm> [accessed 30 May
2003]。
51
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 4
The following diagram shows the comparison in population and the GDP (gross
domestic product) between three major urbanized regions in the mainland of
China in 1999.
8154.2
6835
Bohai Sea Region
Population (10,000
persons)
GDP (100 million
6670.7
2772
Pearl River Delta
yuan)
13740.3
7471
Yangtze River Delta
0
5000
10000
15000
20000
25000
Note: The Bohai Sea region centres around Beijing, Tianjin and Dalian; the Pearl River Delta
centres around such cities as Guangzhou, Shenzhen, Zhuhai and southern Zhongshan; the
Yangtze Delta centres around such cities as Shanghai, Suzhou, Wuxi, Nanjing, Hangzhou and
Ningbo.
Reference:
國家統計局編。
《2001 中國發展報告：中國的「九五」
》
。北京：中國統計出版社，2001，頁 62。
52
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 5
This picture shows Pudong, a newly developed commercial area in Shanghai.
Source:
Department of History, The Chinese University of Hong Kong.
Source 6
In the 1990s, Shanghai proposed the total transformation of dangerous shacks and
roughly built houses that spanned a total area of 3.65 million square kilometres.
The project lasted 10 years and was completed on time at the end of 2000 …
Currently, there is a new round of transforming the old districts. By 2001, old
residential buildings covering a total area of 3.8666 million square kilometres
were demolished. The protection and the administration of the environment in the
city aims at “creating a bluer sky, clearer water and greener earth”.
Citation from:
上海市政府網站 – 上海概況：城市建置，
<http://www.shanghai.gov.cn/gb/shanghai/node2314/node3766/node3826/node3828/index.html>
[accessed 27 May 2003]。
53
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 7
This table shows the investment in infrastructure in Shanghai, 1995-2001.
Year
1995
Investments 273.78
(100
million
yuan)
1996
1997
1998
1999
2000
2001
378.78
412.85
531.38
501.39
449.90
510.58
Reference:
上海市政府網站，
<http://www.shanghai.gov.cn/gb/shanghai/node2314/node3766/node3826/node3832/userobject1ai
132.html> [accessed 27 May 2003]。
54
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What is urbanization? How does China’s overall level of urbanization compare
with the global level?

What is the trend of urbanization in China since the middle of the 1990s?

What are the characteristics in the distribution of China’s urbanized regions?

How has the appearance of China’s metropolises, e.g. Shanghai, changed as a
result of urban development?

How important do you think is the development of small towns and cities in the
mainland’s urbanization process?

What role do small towns and cities play in the community and economy of
localities?
55
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
What are reasons for migrant workers?
Source 1
In 2000 the percentage of population in towns and cities in China was 36.09%,
amounting to 455.94 million. In 1996-2000 this population in towns and cities
had increased by 108.42 million in five years … The 25% increase in population
was brought about by natural growth in 1991-1995 and then declined to 10% in
1996-2000. Putting aside natural growth, this suggested that an average of 20
million rural population migrated to towns and cities per year in 1996-2000.
Citation from:
國家統計局編。《2001 中國發展報告：中國的「九五」》。北京：中國統計出版社，2002，頁 251
至 252。
Source 2
In 2001 a total of 78 million rural labourers worked in sectors other than
agriculture, a 5% increase over the previous year and constituting 16.3% of the
total rural labour force. Chen Xi, a well-known expert in rural problems and the
Vice-Director of the Development and Research Centre of the State Council of
China, said that great changes have occurred in the market for agricultural
produce on the mainland in recent years – from a situation where demand
exceeded supply to one in which supply exceeds demand and there is even an
accumulation of the surplus of agricultural produce. To peasants, simply
increasing agricultural output cannot raise their income. As a result, they have to
find new employment opportunities outside agriculture. Basically, agricultural
development in any country will continuously release labour to areas outside
agriculture. It is an established rule that in order to create a wealthy peasantry,
cutting down the number of peasants is essential.
Citation from:
冀文海。〈最沉重的話題：民工〉（原載於《中國國經濟時報》
）。新華網，2003 年 2 月 10 日，
<http://big5.xinhuanet.com/gate/big5/news.xinhuanet.com/fortune/2003-02/10/content_722284.ht
m> [accessed 30 May 2003]。
56
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 3
The number of extremely impoverished population in the rural areas (i.e.
population with a per capita income below 500 yuan) in China was 14.595
million. The number of impoverished population with a per capita income below
1,000 yuan and those with a per capita income between 1,000 and 2,000 yuan was
90.334 million and 310.793 million, respectively. Nearly 30 million people
suffered from starvation and 60 million people hovered along the starvation line.
Summarized from:
（中國）
《光明日報》
，2003 年 3 月 26 日。
Source 4
During the initial period of reform, the difference in income between the eastern,
central and western regions and between villages and cities diminished
continuously. But after 1985 the gap in income between the regions and between
villages and cities widened again. By the beginning of the 1990s the gap was
even more serious than that before the implementation of reforms...The excessive
difference in income between the eastern, central and western regions made many
peasants in the central and western regions dissatisfied with agricultural
production and this led to an influx to the eastern region for work. The number of
migrant workers was estimated to be between 80 million and 100 million.
Citation from:
林毅夫。〈展望新千年的中國經濟〉
。《二十一世紀》
，期 51，1999 年 12 月，頁 139 至 147。
57
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 5
In 2002 the total retail value of consumer goods in the whole country exceeded
4,000 billion yuan, an 8% increase over the previous year. The total retail value of
consumer goods in county and areas below county level grew by 6.8%, far below
the 10% growth rate in cities. The contribution of counties and areas below
county level to the total retail value of consumer goods was only 36.7%, a decline
of 0.7% from the previous year. Spending power in rural areas is weak, and the
basic reason for the difficulty in promoting the consumer market in rural areas is
that the income level of peasants is too low and the growth of their income too
slow. This results in the relatively slow growth rate of the consumer market in the
rural areas.
Summarized from:
（中國）
《人民日報》
，2003 年 4 月 9 日。
Source 6
According to the government work report presented by Premier Zhu Rongji, the
per capita disposable income of urban residents was 5,160 yuan in 1997 and
8,000 yuan in 2002. The net income of rural residents was 2,090 yuan in 1997
and 2,400 yuan in 2002.
Summarized from:
《香港商報》，2003 年 3 月 6 日。
People’s Daily Online, 28 February 2003,
<http://english.peopledaily.com.cn/200302/28/print20030228_112445.html> [accessed 4 March
2003].
58
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 7
People in the mainland of China are divided into two categories by the household
registration system: rural and urban households. Households and land are united
in the rural areas, while households and labour, employment and daily supplies
are linked up in cities. The household registration system ties health, education
and housing to employment in state-owned enterprises. The frustration with
stagnant returns from agriculture, mandatory grain levies and heavy taxation
could force millions more agricultural labourers into cities.
Summarized from:
Zhang Lijia and Calum MacLeod. “Xiao Liangyu: Rubbish Man”. In China Remembers. Hong Kong:
Oxford University Press, 1999, pp. 248-249.
馬戎等編。
《九十年代中國鄉鎮企業調查》
。香港：牛津大學出版社，1994，頁 ix 至 x。
Source 8
This diagram shows the changes in income of rural households in 1995 and 2000.
80
71.4
70
63.3
60
50
1995
% 40
30
2000
31.2
22.4
20
6.2
10
5.5
0
Wages
Profits earned from family
business
Others
Reference:
國家統計局農村社會經濟調查總隊編。
《2001 中國農村貧困監測報告》
。北京：中國統計出版社，
2001，頁 3。
59
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What are the characteristics in the distribution of population in urban and rural
areas on the mainland?

What do we mean by “migrant workers”?

What do you think are the reasons for the decline in spending power in rural
areas?

What problems will arise with the changes in the income structure of rural
residents?

What are the conditions in rural areas that drive peasants to migrate to cities for
job opportunities?

What do you think are the attractions of cities that prompt the migration of
peasants?
60
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
What problems do migrant workers bring?
Source 1
The mainland of China has a total of 1.9 billion hectares of arable land and
produces 800 million tons of grains per year. To satisfy citizens’ need, only a
labour force of 40 million is required. Currently, the total number of people
engaged in agricultural production is as high as 499 million. Trapped in between
40 million and 499 million is a massive number of people … Where should this
surplus labour force go?
Citation from:
王海坤。〈60%城市化率演繹中國城市時代〉（原載於《中國經濟時報》）。中國報道網頁 ，
<http://big5.cri.com.cn/773/2002-11-15/63@114961.htm> [accessed 30 May 2003]。
Source 2
At times of good economic development, migrant workers provide the eastern
region with cheap labour and contribute to the economic development of the
region. The majority of migrant workers are frugal, remitting their income back to
their homes. This becomes the major source of capital accumulation in the central
and western regions and the increase in their income. However, at times of
economic depression, massive numbers of migrant workers are stranded in the
cities and become a probable source of social instability.
Citation from:
林毅夫。〈展望新千年的中國經濟〉
。《二十一世紀》
，期 51，1999 年 12 月，頁 139 至 147。
61
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 3
A total of 33.5% of migrant workers in the cities have had the experience of
unemployment and their unemployment rate is higher than that for urban
residents … Among migrant workers being unemployed, nearly 30% have been
out of a job for as long as six months or more … According to a survey on crimes
committed by migrant workers in the cities in Zhejiang Province, 35% of migrant
workers did so as a result of financial problems caused by unemployment and
joblessness.
Citation from:
李強。〈當前我國城市化和流動人口的幾個理論問題〉。出自李培林主編，《農民工：中國進城農
民工的經濟社會分析》
。北京：社會科學文獻出版社，2003，頁 52。
Source 4
It is common that work units which hire migrant workers do not sign any contract
of employment. When labour disputes arise, it is difficult to protect the rights of
migrant workers. Among 100 migrant workers interviewed, less than 10 have
signed employment contracts … The problem of late payment and dishonest
withholding of wages by employers is serious.
Citation from:
孫立平。〈城鄉之間的「新二元結構」與農民工流動〉。出自李培林主編，《農民工：中國進城農
民工的經濟社會分析》
。北京：社會科學文獻出版社，2003，頁 154。
62
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 5
The two million or three million migrant workers who come to Beijing bring with
them more than 100,000 migrant children. Public primary and secondary schools
normally do not admit children of migrant workers whose household residence is
registered elsewhere … According to a survey conducted in Fengtai District in
September 2001, the number of migrant children who were admitted into public
schools was less than one-sixths and more than 85% studied in inadequately
furnished schools founded by non-governmental bodies … Yet, these schools do
not have a legitimate status and are operated under difficult circumstances.
Adapted from:
崔傳義。
〈適應農民進城，調整城鄉關係—對進京農民工及其子女就業就學和居住問題的調查〉。
出自李培林主編，
《農民工：中國進城農民工的經濟社會分析》
。北京：社會科學文獻出版社，
2003，頁 164 至 165。
63
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
This bar chart shows the percentage of Beijing residents who think migrant
workers would affect their job opportunities.
%
45
40
35
30
25
20
15
10
5
0
Laid-off workers
Unemployed women
workers
Men (primary
education level)
Women (tertiary
education level)
Men (tertiary
education level)
Adapted from:
李路路。〈向城市移民：一個不可逆轉的過程〉。出自李培林主編，《農民工：中國進城農民工的
經濟社會分析》
。北京：社會科學文獻出版社，2003，頁 126。
64
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What do you think are the positive effects of migrant workers on urban economic
development?

How are migrant workers treated in cities? What problems do they face?

Are there any links between migrant workers unemployment and urban crimes?

What are the consequences of the lack of protection of the rights of migrant
workers?

What problems do migrant workers face when they bring their children with them
to a city?

How do migrant workers impact on the employment opportunities of urban
residents?
65
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
How can the issue of migrant workers and the resulting problems be tackled?
Source 1
Ever since the opening-up of the country and the implementation of reforms,
economic development in each region has been substantial. There have been
obvious changes compared with the past. But because of different starting points
and conditions of development, some regions have a faster rate of development
while some develop at a relatively slower rate. This leads to a larger gap between
the regions, a problem which has aroused the attention of various sectors in
society. The proposal that the difference in development between regions should
be taken seriously and resolved is both timely and necessary. … Resolving the
difference between regional development requires a process. Basically, the faster
development of regions that enjoy favourable conditions strengthens of the
country’s economic power and as a result, is also beneficial to the gradual
reduction of the gap between regions. The eastern coastal region must fully utilize
their favourable conditions, continue to bring their superiority into play and
further enhance its economic vitality. At the same time, the state must further
consider how to support the exploitation of the underdeveloped areas in the
central and western regions, provide support to regions inhabited by minority
races, help impoverished regions to break away from poverty and become
wealthy and solve the problems of economic development in such regions.
Citation from:
李鵬。
《關於制定國民經濟和社會發展，“九五”計劃和 2010 年遠景目標建議的說明》
（1995 年
9 月 25 日）
。載於人民網，中國共產黨第十四次全國代表大會，
<http://www.people.com.cn/GB/shizheng/252/5089/5106/5278/index.html> [accessed 30 May
2003]。
66
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 2
On 27 March 2003, Jiansu Province will revoke the planned quota of rural
household residence and migrant population in cities and implement a system of
conditional entry of migrant households. Migrant workers are allowed to enter
into cities so long as they have legitimate and fixed residence or a stable job.
Summarized from:
《人民日報》，2003 年 4 月 1 日。
Source 3
Prior to reform and during the period of the planned economy and state-guided
industrialization, urban and rural residents were divided into two categories of
unequal status and unequal rights by two types of households, i.e. non-rural
households in towns and cities and rural households in villages … The
opening-up of the country and reforms, which served as a transition towards a
market economy, has been carried out for more than 20 years, but the division
between cities and villages is not yet removed … In order to solve the problems
caused by the entry of peasants into cities to look for employment, it is necessary
to further reform the system of division between cities and villages according to
the principles of a market economy and a society based on the rule of law.
Citation from:
崔傳義。
〈適應農民進城，調整城鄉關係—對進京農民工及其子女就業就學和居住問題的調查〉。
出自李培林主編，
《農民工：中國進城農民工的經濟社會分析》
。北京：社會科學文獻出版社，
2003，頁 169。
67
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 4
The following is from a report presented by the former Premier, Zhu Rongji, in
March 2003
... the migration of the surplus rural labour force to non-rural industries and to
towns and cities is an inevitable trend in industrialization and modernization. We
insist on carrying out the strategy of urbanization and actively developing small
towns and cities. We also support the entry of peasants into cities to work and
protect the legal rights of migrant workers against discriminatory policies and
random charging of fees. At the same time, we will strengthen our guidance and
administration …
Summarized from:
《香港商報》，2003 年 3 月 6 日。
People’s Daily Online, 28 February 2003,
<http://english.peopledaily.com.cn/200302/28/print20030228_112445.html> [accessed 4 March
2003].
Source 5
The leadership of Shanghai proposed that from now on, city planning would
target to accommodate a population of 20 million. Shanghai used to plan its
transport facilities and other infrastructure based on a target population of 17
million. However, in the beginning of 2003 the Central People’s Government
proposed the target of accelerating urbanization, the direct effect of which is the
entry of a massive number of peasants into cities and their becoming new urban
residents.
Summarized from:
《明報》
，2003 年 2 月 11 日。
68
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
The State Council of China issued a decree to protect migrant workers. It gives
them a “legal right” to work in cities, and not to be limited to dirty, dangerous
jobs. It gives migrant workers the right to live in a city if they can find work
there. A contract is a must between the employer and the migrant worker who is
employed. In addition, once migrant workers are employed, their employers
should provide them with an insurance package which includes pension benefit,
medical coverage and so on.
Summarized from:
South China Morning Post, 16 February 2003.
《中國勞動保障報》，2003 年 5 月 27 日。
69
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What do you think is the relationship between improving rural economy and
making it attractive for peasants to remain in rural areas?

How does the amendment to the household registration system solve the problems
of migrant workers?

What are the benefits of the urbanization and industrialization of rural areas? Can
this development trend drive migrant workers back to rural areas? Why or why
not?

Do you think the further development of metropolises and the acceleration of the
pace of urbanization can prevent the massive migration and solve the many
problems? Why or why not?

Comment on the decree for the protection of the rights of migrant workers issued
by the State Council of China.
70
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Suggested question for enquiry:
How can the divergences between urban and rural areas be narrowed?
Source 1
In 1998-2001 the accumulative total of national debt in agriculture amounted to
189.7 billion yuan, accounting for 28.7% of the total national debt in the same
period. The Central Budget had also provided for a total investment of 254.7
billion yuan in basic agricultural development in five years. This was the period
in which the growth in investment in agricultural infrastructure was the fastest
and the total amount the highest since the founding of new China.
Citation from:
潘海平。＜我國國民收入分配開始各有利於“三農”方向調整＞。2003 年 4 月 9 日，新華網，
http://www.xinhua.org [accessed 20 April 2003]。
Source 2
In order to release peasants from excessive tax burden, pilot work on the reform
of the rural tax has been carried out in 20 provinces. The number of rural
population in areas in which the pilot work is conducted amounts to 620 million,
accounting for three-quarters of the total rural population in the country. The
average tax burden on peasants who benefit from the pilot work has been reduced
by 30%.
Summarized from:
(中國)《光明日報》
，2002 年 11 月 4 日。
《香港商報》，2003 年 3 月 6 日。
71
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 3
Premier Zhu Rongji mentioned in his government work report that the system of
administration fees and taxes in rural areas needs to be reformed … to reduce
peasants’ burden. During the past five years, the government spent 4,077 million
yuan to support agriculture and agricultural production. More investments will
also need to be made to accelerate the harnessing of big rivers and lakes, and no
time should be lost in constructing pivotal projects on major rivers and
reinforcing decaying reservoirs to improve their flood-control, flow-management
and storage capabilities. More power grids, telecommunications facilities, radio
and television installations, roads and water supply facilities also need to be
constructed in rural areas to improve production, living standard and marketing
conditions there.
Summarized from:
《香港商報》，2003 年 3 月 6 日。
People’s Daily Online, 28 February 2003,
http://english.peopledaily.com.cn/200302/28/print20030228_112445.html
[accessed
4
March
2003].
Source 4
Beginning from 2000 peasants can apply to become households in towns and
cities according to their own wishes, so long as they have legitimate and fixed
residence, a stable job or source of living in the urban areas of cities at county
level, in towns in which the county governments are situated and in small towns
and cities below county level. They will be entitled to the same rights enjoyed by
residents in towns and cities, such as education for their children, joining the
army and employment. For peasants who settle down in towns, they can preserve
their contracts for the operation of land according to their own wishes. They are
also permitted to transfer their land for a price according to the law.
Citation from:
曾炎培編。
《2001 年中國國民經濟和社會發展報告》
。北京：中國計劃出版社，2000 年，頁 301
至 302。
72
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 5
This diagram shows the investments made by the Central People’s Government to
alleviate poverty in rural areas, 1986-2000.
180
160
100 million yuan
140
120
100
80
60
40
20
0
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Reference:
國家統計局農村社會經濟調查總隊編。
《2001 中國農村貧困監測報告》
。北京：中國統計出版社，
2000，頁 77。
73
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Source 6
Prior to 1978 Xiaogang village in Fengyang county, Anhui Province, was known
as a village in which the survival and livelihood of residents relied on social
welfare, loans and grain resold to the rural areas by the state after it had
purchased the grain from such areas. Almost every household became beggars
after the harvest in autumn. By 1997 grain production in Xiaogang village rose to
1.2 million catties, from 30,000 catties in 1978. Colour TV sets, refrigerators,
motor cars and other high-quality commodities made their way into homes.
High-rise buildings, single-storey houses and tile-roofed houses replaced the
previous thatched cottages. A reception system for satellite television and other
systems were also installed … Roads, telecommunications, water supply, power
supply and other infrastructure were strengthened in the village. Conditions
favourable to investment were created and a liberal policy designed to attract
foreign investment was formulated. The development of the village as an
agricultural tourist spot was also set as a target.
Citation from:
華 徽 網 。《 中 國 農 村 改 革 發 源 地
－
今 日 小 崗 村 》。 2002 年 9 月 19 日 ，
<http://www.hhw.com.cn/e_new.asp?key=40> [accessed 20 May 2003]。
74
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point a – Rural reform and urban development
Questions for discussion:

What are the effects of the development of mainland cities on the rural areas?

What is the relationship between the migration of the rural population into cities
and the shrinking of the gap between cities and villages?

In what way is the increase in investment in basic agricultural development by the
Central People’s Government significant?

How does the Central People’s Government reduce the tax burden of the peasants?

How has the state’s investment in rural areas in the last 15 years alleviated
poverty?
75
Key Point b
The reform of state-owned enterprises,
enterprises of the non-public sector and
China’s entry into the World Trade
Organization (WTO)
76
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Teachers’ References
The opening-up measures in 1978 led to the reform of state-owned enterprises. In the
last 20 years, the reform went through several stages, with different objectives for
each stage.



1978 – 1984: The objective was to increase the autonomy of state-owned
enterprises.
1984 – 1993: The objective was to separate ownership from operational rights of
enterprises.
1993 – present: The objective is to establish a modernized system of enterprises
and adjust the layout of the state-owned economy.
After more than 20 years of reform, some state-owned enterprises have turned losses
into profits. They have also become more modernized in terms of production,
governance, marketing strategies and sale. Of course, problems remain in some other
state-owned enterprises. That is why the former Premier, Zhu Rongji, pointed out that
reform of state-owned enterprises and the economic development of the country are
closely linked and the acceleration of reform is necessary.
The positive effect of reform of state-owned enterprises is the increase in their
competitive power. But it also has negative impact – the rise in unemployment rate.
The increase in unemployment and the number of laid-off workers result in many
social problems such as domestic conflicts. If the unemployment rate continues to rise,
social stability could be threatened. Both the Central People’s Government and local
people’s governments have implemented measures designed to help laid-off workers
rejoin the labour market.
With the opening-up of the mainland and its integration with the global economic
system, the number of enterprises in the non-public sector increases and they are
becoming more important in the national economy. The Central People’s Government
and local people’s governments have begun to relax their control on enterprises in the
non-public sector.
77
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Although our country’s entry into the World Trade Organization (WTO) brings many
challenges to state-owned enterprises and enterprises in the non-public sector, it also
brings new opportunities. As a special administrative region, Hong Kong also has to
face the challenges and opportunities brought by our country’s accession to the WTO.
How should Hong Kong effectively make use of its existing economic advantages and
re-position itself? What role should Hong Kong play in the national economy? These
are questions that deserve our careful consideration.
Suggested Learning Objectives
Suggested questions
for enquiry
Learning objectives
What are the factors that prompt
state-owned
enterprises to launch
reforms?
[1 – 2 periods]
Remarks
To analyze the factors prompting
state-owned enterprises to
launch reforms: heavy losses
suffered by such enterprises, the
fiscal burden on the government,
internal problems, low
competitiveness, external
economic conditions and
changes in national economic
policies.
What are the effects
of these reforms?
[2 periods]
-
-
To understand the contents and
effectiveness of reform of
state-owned enterprises;
To analyze the effects of reform
of state-owned enterprises, e.g.
raising competitiveness and
The key to reform of
state-owned enterprises is
the separation of the
government and
enterprises. Power
decentralization and the
efficiency, reducing fiscal
burden on the government and
enterprises, increased autonomy
of management and aggravation
of the problem of
unemployment.
increase in autonomy of
enterprises are not only
beneficial to governance
but also fit the principle
of a market economy.
78
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested questions
for enquiry
How does the
government handle
the unemployment
problem brought by
the state-owned
enterprises reform?
Learning objectives
-
-
Remarks
To understand the
unemployment problem caused
by reform of state-owned
enterprises;
To discuss the effectiveness of
the measures carried out by the
[1 – 2 periods]
government in resolving the
problem.
What are the roles
played by enterprises
of the non-public
sector in China’s
economy?
[1 – 2 periods]
To understand the development
of enterprises in the non-public
sector;
To analyze the importance of
enterprises in the non-public
sector to the national economy.
Enterprises in the
non-public sector and
foreign investment
mainly concentrate in the
eastern coastal region.
Ask students: What are
the attractions of the
eastern coastal region to
such enterprises?
Why did China join
the WTO?
[1 – 2 periods]
-
To analyze the reasons for China Students may not
joining the WTO;
understand clearly the
To discuss whether entry into the mission and function of
WTO is a must for China.
the WTO. Ask students to
collect information about
the WTO before
discussion. Refer to the
Supplementary Material
for the organization of
WTO and the multilateral
trading system.
79
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested questions
for enquiry
Learning objectives
What are the
opportunities and
challenges brought by
China’s entry into the
WTO as a developing
country?
To analyze the opportunities and
challenges created by China’s
entry into the WTO in terms of
trade, industry and agriculture.
Remarks
The mainland’s entry into
the WTO (and
globalization) is also
discussed in Core Module
IV, Issue 3 (Key point b).
[1 period]
What are the
opportunities and
challenges facing
Hong Kong following our country’s entry
into the WTO?
[1 period]
To analyze the economic
The mainland’s entry into
relationship between Hong Kong the WTO (and
and the mainland;
globalization) is also
To discuss the effect of the
discussed in Core Module
mainland’s entry into the WTO IV, Issue 3 (key point b).
on Hong Kong.
What are the roles
played by Hong Kong
To discuss what changes Hong
Kong should make after our
economy in our
country’s economic
development?
[1 period]
country’s accession to the WTO;
To discuss how Hong Kong can
keep its place in our country’s
economy after the mainland has
has linked up with the global
economy.
-
80
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Supplementary material
What is WTO?
The World Trade Organization (WTO) is the only global international
organization dealing with the rules of trade between countries. At its heart are the
WTO agreements, negotiated and signed by the bulk of the world’s trading
nations and ratified in their parliaments. The goal is to help producers of goods
and services, exporters, and importers conduct their business. These agreements
provide the legal ground rules for international commerce.
What is multilateral trading system?
The multilateral trading system has been adopted by the WTO since its
establishment. “Multilateral” means that more than two groups or countries are
involved. In fact, most countries in the world, who are members of the WTO, are
involved in the multilateral trading system. Of course, there are still a few
countries who have not joined the WTO, and who are not involved in the
multilateral trading system. This is the reason why “multilateral”, instead of
“global” or “world”, is used.
What are the principles of the multilateral trading system?
The principles of the multilateral trading system are as follows.
(1) Trade without discrimination: A country should not discriminate between
their trading partners (see also “most-favoured-nation”) and it should not
discriminate between its own and foreign products, services or nationals.
(2) Freer trader: Lower trade barriers through negotiation.
81
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
(3) Predictability: Foreign corporations, investors and governments should be
confident that trade barriers, which include tariffs, non-tariff measures and
rules, should not be raised arbitrarily.
(4) Fair competition: Discourage “unfair” practices such as export subsidies and
dumping products at below cost to gain market share.
(5) More favoured terms for less developed countries: Giving them more time to
adjust, greater flexibility, and special privileges.
What is “most-favoured-nation”?
Each member treats all other members equally as “most-favoured” trading
partners. If a country improves the benefits that it gives to one trading partner, it
has to give the same to all the other WTO members so that they all remain
“most-favoured”.
Reference:
劉德標、薛淑蘭編著。《世界貿易組織及多邊貿易規則》。北京：中國方正出版社，1999。
徐兆宏。《世界貿易組織機制運行論》。上海：上海財經大學出版社，1999。
World Trade Organization Website. [Online] http://www.wto.org.
82
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
What are the factors that prompt state-owned enterprises to launch reforms?
Source 1
Under the traditional economic system, the growth of state-owned enterprises
mainly relied on the increase in the major elements of production (e.g. labour,
land and raw materials). The contribution of technological improvement to
industrial growth or total productivity was extremely low.
Citation from:
林毅夫、蔡昉、李周。<國有企業產生的邏輯>。出自盛洪、張宇燕編，
《從計劃經濟到市場經濟》。
北京：中國財政經濟出版社，1998，頁 40。
Source 2
An overwhelming majority of small state-owned enterprises are being run at a
loss. The total loss of state-owned enterprises amounted to 16.2 billion yuan in
1995 and the number of such enterprises running at a loss was 18,200.
Citation from:
高尚全。《中國市場經濟縱論》
。香港：三聯書店（香港）有限公司，1998，頁 106。
Source 3
The status of state-owned enterprises in China’s national economy has declined,
as shown in the decrease in their contribution to the total industrial output value
from 78% in 1978 to around one-third in 1999 … Prior to reforms, the major
source of government revenue was the tax paid by state-owned enterprises. After
the reforms, the subsidies given to state-owned enterprises became the main
burden of government finances. The government ran short of ways in dealing
with the situation and was unable to support other urgent reforms.
Citation from:
林毅夫。〈展望新千年的中國經濟〉
。《二十一世紀》
。期 51，1999 年 12 月，頁 139 至 147。
83
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 4
On the one hand, government departments often interfere with state-owned
enterprises but fail to undertake responsibility for their policy. Government
officials do not receive any gain from these enterprises, nor are they required to
be accountable for the consequent losses. On the other hand, owing to the lack of
effective supervision and an incentive system, managers of state-owned
enterprises tend to make big investment, import more equipment, pay workers
more wages and gain advantages for themselves … These are the major reasons
for the low efficiency of state-owned enterprises.
Citation from:
盧邁。
〈鄉鎮企業的產權制度與激勵機制〉
。
《二十一世紀》
。期 26，1994 年 12 月，頁 143 至 155。
Source 5
The traditional planned economy has brought excessive burdens to state-owned
enterprises, compelling them to pay large amounts of pension to workers who
engage in activities which do not make a profit. State-owned enterprises also have
to bear the medical, educational and housing expenses of their workers and their
family.
Citation from:
大塚啟二郎、劉德強、村上直樹。
《中國的工業改革：過去的成績和未來的前景》
。上海：上海人
民出版社，2000，頁 310。
84
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 6
Under a planned economy, jobs and housing are allocated by the state. Workers
enjoy a stable income and a stable job and need not worry about being laid-off.
But since workers who adopt a serious attitude towards their work and those who
do not receive the same amount of pay, personal effort does not raise one’s living
standard. As people cannot normally own private property under a planned
economy, their work efficiency declines. The product quality of state-owned
enterprises is relatively low. This hurts the development of the national economy.
Citation from:
黃漢哲。《今日中國的經濟體制》，
<http://ml.hss.cmu.edu/ml/studentservices/Polyglot/Chinese_New_Year/Justin_Hwang.htm> [下
載日期：2003 年 5 月 27 日]。
85
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What is the relationship between state-owned enterprises and the government?

What changes have occurred in the contribution of state-owned enterprises to the
national economy since 1978? What do these changes reflect?

Why are state-owned enterprises inefficient?

What are the problems with the management of state-owned enterprises?

How were state-owned enterprises generally managed in the middle of the 1990s?

How do the financial problems of state-owned enterprises affect the government?

Since the implementation of reforms, China has been practising a socialist market
economy. To what extent has a socialist market economy promoted the reform of
state-owned enterprises?
86
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
What are the effects of these reforms?
Source 1
Premier Zhu Rongji mentioned in his government work report that state-owned
enterprises were the central link in the reform of the entire economic system.
There was no way out if reform of state-owned enterprises was not promoted …
[In the last five years] reform towards a share-holding system and intensified
reform of such systems as internal allocation, human resources and labour have
been carried out in accordance with the principles of “clear industrial rights,
definite rights and duties, the separation of the government and enterprises, and
scientific management” … At the same time, the reform and listing of big
state-owned enterprises on the stock market was encouraged. In the last five
years, the number of newly listed companies within and outside the mainland,
which were originally state-owned enterprises and enterprises with the state as the
holding entity, amounted to 442. The accumulative total of funds raised was
743.6 billion yuan, including US$35.2 billion raised outside the country.
Summarized from:
《香港商報》，2003 年 3 月 6 日。
People’s Daily Online, 28 February 2003,
<http://english.peopledaily.com.cn/200302/28/print20030228_112445.html> [accessed 4 March
2003].
87
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 2
Since the implementation of reforms, the Chinese government has put sustained
effort in the following areas: 1) Strengthen the profit-seeking motive of
state-owned enterprises through the gradual raising of the level of preserved
profits; 2) Enlarge the percentage of the exchange of products of state-owned
enterprises in the market; 3) Narrow the gap between the planned prices of
products of state-owned enterprises and the market price; 4) Increase the
competition between state-owned enterprises and village and township
enterprises; 5) Relax the restrictions on the migration of the labour force; 6) Carry
out a liberal policy to encourage state-owned enterprises to import advanced
technology and to participate in national competition.
Citation from:
大塚啟二郎、劉德強、村上直樹。
《中國的工業改革：過去的成績和未來的前景》
。上海：上海人
民出版社，2000，頁 7。
Source 3
Among the total asset value of more than 240,000 foreign-investment projects in
the country, 57% come from state-owned enterprises. The utilization of foreign
investment in state-owned enterprises in Shanghai, Beijing, Jiangsu, Liaoning is
especially outstanding.
Adapted from:
李小建。
〈跨國公司及其中國投資地區的經濟發展〉
。
《二十一世紀》
。期 51，1999 年 2 月，頁 149
至 157。
88
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 4
In 2000, 75% of small state-owned enterprises were converted into
non-state-owned enterprises through auction, leasing, share-holding partnership
and Sino-foreign joint venture … More than 85% of large and medium
state-owned enterprises were transformed into limited liability corporations and
share-holding corporations. Among 520 key enterprises, 70% were converted into
mixed-ownership share-holding corporations.
Adapted from:
呂政。
〈論國有企業改革的攻堅任務〉
。出自史忠良、吳家駿編，
《中國產業發展與企業改革》。
北京：經濟管理出版社，2001，頁 322。
Source 5
In 1996 – 2000 … strategic reshuffling of state-owned enterprises was carried
out. Mergers, standardized liquidation, triage of laid-off workers, lay-offs and
increased efficiency were encouraged … In the three-year period between 1998
and 2000, the total number of newly laid-off workers in the whole country was
20.32 million.
Adapted from:
國家統計局編。
《2001 中國發展報告：中國的「九五」
》
。北京：中國統計出版社，2002，頁 254。
89
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 6
Chen Liyan said, “All of a sudden, I became a laid-off worker. Staying at home
that winter was the worst time I have ever experienced. I had always worked, and
for the same factory for nearly twenty years. In its heyday in the sixties, the
Shenyang Textile Factory had nearly 100,000 employees. … Shortly after I was
laid off, my husband, a plumber at the Shenyang Silk Textile Factory, was also
laid off for a few months. Suffering from both depression and bad moods, we
were always arguing, and often fighting. I heard the divorce rate in families of
laid-off workers is rising sharply.”
Citation from:
Zhang Lijia and Calum MacLeod. “Cheng Liyan & Yue Xiuying: End of the Iron Rice-Bowl”. In China
Remembers. Hong Kong: Oxford University Press, 1999, p.273.
Source 7
After 10 years of reform, the Haixin Group, a professional industrial group
engaged in electronic information in Shandong Province, now has more than 20
subsidiary companies within and outside the mainland. The net asset value of the
group was 2.6 billion yuan, with sales income amounted to 16.1 billion yuan in
2001. The Haixin Group has technology centres at state level as well as excellent
workstations for scientific research. The products of the group are sold to more
than 40 countries and regions in Europe, Africa, Southeast Asia and South
America.
Adapted from:
湯乙清。《改革促生巨變：聆聽國企改革者的心聲》
。載於新華網，
<http://big5.xinhuanet.com/gate/big5/news.xinhuanet.com/misc/2002-11/29/content_639950.htm>
[下載日期：2003 年 6 月 2 日]。
90
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What are the benefits to state-owned enterprises brought about by foreign
investment and being listed on the stock market?

What are the effects on workers’ employment when the state reforms the system
of state-owned enterprises?

What problems are created by the reform of state-owned enterprises?

What are the effects of the reform of state-owned enterprises on government
finances?

Do you think the reform of state-owned enterprises will improve their prospect
and future development? Give reasons for your answer.

Do you think the reform of state-owned enterprises contribute to the economic
development of the mainland? Discuss your views with your classmates.
91
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
How does the government handle the unemployment problem brought by the
state-owned enterprises reform?
Source 1
The table shows the number of employed persons in urban areas from 1995 –
1999.
Units (10,000 persons）
1995
1996
1997
1998
1999
State-owned Units
11,261
11,244
11,044
9,058
8,572
Urban Collective
Owned Units
3,147
3,016
2,883
1,963
1,712
Share-holding
Corporations Ltd.
317
363
468
410
420
Private Enterprises
485
620
750
973
1,053
1,560
1,709
1,919
2,259
2,414
272
265
281
294
306
241
275
300
293
306
Self-employed
Units Funded by
Entrepreneurs from
Hong Kong, Macao
and Taiwan
Foreign Funded Units
Reference:
中國統計師事務所編。《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 47。
中華人民共和國國家統計局網頁，<http://www.stats.gov.cn/ndsj/zgnj/2000> [下載日期：2003 年
4 月 2 日]。
92
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 2
In June 1999 the government chose 100 cities as pilots towards a modern,
standardized labour market. These 100 cities have a total of 7,551 employment
agencies established by labour departments. Employment agencies founded by
other units (departments) and individuals amounted to 2,180 and 1,791
respectively … Wages are basically determined by the market.
Citation from:
任興洲。〈中國市場體系發育進程：1999-2000〉。出自馬洪編，《中國市場發展報告：2000》。
北京：中國發展出版社，2000，頁 10。
Source 3
From 1998 to the end of 2000, 13.58 million laid-off workers participated in
various re-employemnt training programmes. Among them, 8.83 million were
re-employed.
Adapted from:
國家統計局編。
《2001 中國發展報告：中國的「九五」》
。北京：中國統計出版社，2002，頁 256。
93
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 4
The Regulations on Unemployment Insurance was approved at the 11th executive
meeting of the State Council on 16 December 1998. The Regulations was
promulgated and has become effective. The new Regulations on Unemployment
Insurance covers all enterprise units and their workers in towns and cities … The
number of workers protected by unemployment insurance rose from 79.279
million at the end of 1998 to 99.12 million by the end of 1999. Income from the
Unemployment Insurance Fund increased to 11.7 billion yuan.
Summarized from:
朱鎔基。《中華人民共和國國務院令第 258 號》
。載於中國勞動及社會保障部官方網站，
<http://www.molss.gov.cn/correlate/sybxTL.htm> [下載日期：2003 年 4 月 2 日]。
莫榮。
〈中國勞動力市場發展與預測〉
。出自馬洪編，
《中國市場發展報告：2000》
。北京：中國發
展出版社，2000，頁 60。
Source 5
In 2000 the average living expenditure of laid-off workers was 1,834 yuan, an
increase of 909 yuan over 925 yuan in 1996. The expenditure nearly doubled. The
rate of increase was almost 40% over the average wage of employed workers in
1996 – 2000.
Adapted from:
國家統計局編。
《2001 中國發展報告：中國的「九五」》
。北京：中國統計出版社，2002，頁 262。
94
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What trend is shown in the distribution of the working population in different
units as shown in Source 1?

How does a labour market help laid-off workers?

What do you think are the functions of the labour market and re-employment
training?

How does the Regulations on Unemployment Insurance help workers?

Do you think there are ways to solve the problems created by the reform of
state-owned enterprises? Suppose you were a government official, suggest some
ways of solving the problems.
95
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
What are the roles played by enterprises of the non-public sector in China’s
economy?
Source 1
With the reforms in 1978, the Chinese government permits the development of
private enterprises and Sino-foreign joint ventures. People are also allowed to
own private property. With competition, good quality products are produced.
Corporations and factories with high output enjoy high profits. In these
corporations and factories, life employment is no longer protected. Workers with
high efficiency are given pay rises and promoted to higher positions … People
can now choose what to do and there is a possibility of success or failure in their
careers. People with ambitions are given the opportunity to develop their careers.
This is one of the major driving forces of the economic development of the
mainland.
Citation from:
黃漢哲。《今日中國的經濟體制》，
<http://ml.hss.cmu.edu/ml/studentservices/Polyglot/Chinese_New_Year/Justin_Huang.htm> [下載
日期：2003 年 5 月 27 日]。
96
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 2
This table shows the development of private enterprises on the mainland in
1989-1998.
Year
Number of
private
enterprises
Registered
capital
(100 million
yuan)
Number of
employed
persons
(10,000
Output value Tax revenue
(100 million
(million
yuan)
yuan)
persons)
1989
90,581
84
164
97
1.12
1990
98,141
95
170
122
2.00
1991
107,843
123
184
147
3.38
1992
139,633
221
232
205
4.55
1993
237,919
681
373
422
10.46
1994
432,240
1,448
648
1,140
17.52
1995
654,531
2,622
956
2,295
35.59
1996
819,252
3,752
1,171
3,227
60.23
1997
960,726
5,140
1,350
3,923
90.49
1998
1,200,978
7,198
1,710
5,853
--
Note: Registered capital shall consist of property under the operational management of a
corporation as accorded by the State or property owned by a corporation itself.
Reference:
王秀傑。〈1989-1998 年的中國私營企業〉。出自張厚義、明立志編，《中國私營企業發展報告
（1999）
》
。北京：社會科學文獻出版社，2000，頁 33 至 40。
97
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 3
The following table shows the distribution of private enterprises on the mainland
in 1998.
Number of
Number of
private
investors (%)
enterprises (%)
Number of
employed
persons (%)
Registered
capital (%)
Eastern region
64.52
60.65
62.22
50.72
Central region
22.25
24.22
24.11
35.63
Western
region
13.23
15.13
13.67
13.65
Reference:
王秀傑。〈1989-1998 年的中國私營企業〉。出自張厚義、明立志編，《中國私營企業發展報告
（1999）
》
。北京：社會科學文獻出版社，2000，頁 45。
Source 4
In 1997 industrial and commercial tax paid by private enterprises to the state
amounted to 9.049 billion yuan, accounting for 1.32% of the industrial and
commercial tax of the whole country. The percentage was less than their
contribution to the retail sales of consumer goods and to employment … In terms
of the development process, the percentage of industrial and commercial tax paid
by private enterprises rises each year … Private enterprises never require the state
to invest a cent. They are required to pay tax to the state … Their contribution to
the state is, in fact, relatively high.
Citation from:
王秀傑。〈1989-1998 年的中國私營企業〉。出自張厚義、明立志編，《中國私營企業發展報告
（1999）
》
。北京：社會科學文獻出版社，2000，頁 52。
98
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 5
During the first half of 2002 the number of private enterprises newly registered in
Shanghai was more than 30,000, i.e. an average of 170 private enterprises were
established each day. Currently, the total number of private enterprises in
Shanghai is nearly 210,000, employing 2.3 million workers.
Summarized from:
（中國）
《光明日報》
，2002 年 11 月 4 日。
Source 6
In 2001 each of the four counties of Ningyuan, Pingjiang, Miluo, Xiangyin in
Hunan Province had an average of 12,700 self-employed businesses, a 9.5%
increase over the previous year. The number of private enterprises amounted to
130, a 10.4% increase over 2000. These units employed 47,000 workers, a 15%
increase over 2000. The value of industries created during the year was 1.8 billion
yuan and the amount of tax paid to the state totalled 48 million yuan. The
economy of the non-public sector in the county level accounted for one-third each
of the total industrial output value, the total retail sales and fiscal revenue of each
county.
Adapted from:
湖南省農村社會經濟調查隊。<湖南縣域民營經濟發展現狀調查及對策分析>，載於三農數據網，
<http://www.sannong.gov.cn/fxyc/xczjs/200207160220.htm> [下載日期：2003 年 4 月 2 日]。
99
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What has been the development scale of private enterprises on the mainland since
the 1990s?

What are the characteristics in the regional distribution of private enterprises?

What do you think is the significance of private enterprises for national finances?

What do you think is the significance of private enterprises for the labour market?

What is the role of private enterprises in city economy and county economy?

What do you think is the importance of private enterprises to the future economic
development of China? Discuss your views with your classmates.
100
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
Why did China join the WTO?
Source 1
The agreements between WTO members are based on a series of basic principles,
which also form the basis of the multilateral trade system. They include
most-favoured-nation treatment, free trade and others. Newly joined members
enjoy guarantees of preferential treatment and trade regulations provided by other
members.
Adapted from:
The World Trade Organization website – What is the WTO? – Understanding the WTO: Basic,
<http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm> [accessed 11 September 2003].
Source 2
This table shows the total value of imports and exports in the GDP of the
mainland in 1978-1995.
Year
Percentage in GDP (%)
Imports
Exports
1978
5.2
4.6
1980
6.6
6.0
1985
14.0
9.0
1990
13.9
16.1
1995
19.1
21.5
Reference:
中國統計師事務所編。《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996，頁 13。
101
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 3
In 1979-1997 the annual rate of increase of China’s foreign trade was 15.8%. The
percentage of foreign trade in the gross domestic product rose from 9.8% in 1978
to 35.2% in 1996. In terms of the extent of reliance on foreign trade, China’s
economy has become the most open among countries with more than 100 million
population.
Citation from:
林毅夫。〈展望新千年的中國經濟〉
，《二十一世紀》
，期 51，1999 年 12 月，頁 139 至 147。
Source 4
In 2000 the total value of imports and exports on the mainland was US$472.5
billion, accounting for 43.8% of the national domestic product … The delivery
value of exports by joint ventures or enterprises owned by foreign investors alone
constituted 40% of the country’s total delivery value of exports. Direct foreign
investment made up an average of around 15% of the country’s fixed asset
investment. The area of direct foreign investment has shifted from
labour-intensive industries in the 1980s to capital-intensive and skills-intensive
industries. The geographical regions of foreign investment have also gradually
expanded from the coastal regions to the central and western regions … China
has changed from a closed economy to an open economy.
Citation from:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》
。
北京：經濟管理出版社，2001，頁 8。
102
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 5
This diagram shows the comparison between different types of exports by the
mainland of China in 1985 and 1996.
60
50
1985
1996
56 56
40
% 30
20
13
10
10
6
1
0
Exports of low
technological
quality
Exports of
medium
technological
quality
Exports of high
technological
quality
Reference:
世界銀行。《（世界銀行）1999/2000 年世界發展報告》
。北京：中國財政經濟出版社，2000，頁
55。
103
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 6
This table shows the utilization of direct foreign investment on the mainland in
1996-2000.
Year
Number of
cases
Capital bound by
Amount of foreign
contract
investment actually utilized
(100 million USD)
(100 million USD)
1996
24,529
732.13
423.50
1997
21,001
510.03
452.57
1998
19,799
521.02
454.63
1999
17,100
412.38
403.98
2000
22,532
626.57
407.72
Reference:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》。
北京：經濟管理出版社，2001，頁 8。
104
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 7
This diagram shows the number of WTO members in 1980-2003.
160
146
134
140
120
Total number
100
100
85
80
60
40
20
0
1980
1990
1999
Apr-03
Reference:
世界銀行。
《
（世界銀行）1999/2000 年世界發展報告》
。北京：中國財政經濟出版社，2000，頁 5。
The World Trade Organization website – What is the WTO? – Understanding the WTO: The
Organization, Members and Observers,
<http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm> [accessed 11 September 2003].
Source 8
With China’s entry into the WTO, the country can co-operate with 141 other
WTO members in trade. There are both developed and developing countries in
the WTO … After joining the WTO, the mainland will speed up the
implementation of a unified opening-up policy and foreign trade policy. It will
accelerate the opening-up of the coastal regions and regions along the frontiers
and rivers as well as the central and western regions, and inland cities.
Citation from:
劉重。《WTO 會改變中國經濟嗎？》
。天津：天津社會科學院出版社，2001，頁 4。
105
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What changes are obvious in the contribution of the total value of imports and
exports to the mainland’s national domestic product between 1978 and 1995?

What is the trend of foreign investment on the mainland since 2000?

What were the changes in the structure of China’s exports in the last 20 years?

China is a developing country which receives the greatest amount of foreign
investment. What changes have occurred after 1996?

Many countries have joined the WTO in the last 20 years. How does this affect the
development of China’s foreign trade?
106
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
What are the opportunities and challenges brought by China’s entry into the WTO
as a developing country?
Source 1
After its accession to the WTO, China enjoys preferential treatments applicable to
developing countries. These include the protection of embryonic industries,
import and export subsidies and a flexible tariff system … The mainland can still
maintain a 25% tariff rate on motor car imports in six years. The state is still
permitted to retain its monopoly in most of the market for agricultural produce …
Under a transitional arrangement, the opening-up of the banking sector will be
effected in a gradual manner.
Citation from:
余永定、鄭秉文主編。
《中國「入世」研究報告：進入 WTO 的中國產業》
。北京：社會科學文獻
出版社，2000，頁 2。
Source 2
After China’s entry into the WTO and subject to agreements, foreign banks can
go into the mainland to set up branches. But they cannot enjoy national status
until five years later. Foreign banks are no longer restricted in their provision of
cash services, but they cannot provide Renminbi services until five years later.
During the first year of the five-year period, four cities on the mainland will open
to foreign banks, with the opening-up of four other cities in each of the successive
years. In the initial two-year period, the customers of foreign banks will only be
foreigners. Thereafter their clientele will be expanded to include Chinese
customers on the mainland.
Adapted from:
Langlois Jr., John D. “The WTO and China’s Financial System”. In China Quarterly, No. 167,
September 2001, p.619.
107
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 3
For individually owned enterprises, the country’s joining of the WTO brings new
opportunities. On the one hand, individually owned enterprises always emphasize
profits. … They are relatively flexible and hence find it easier to adjust. On the
other hand, sectors which were not open in the past also start to open to
individually owned enterprises when they are open to foreigners. Hence, entry
into the WTO implies new development for individually owned enterprises.
Citation from:
樊綱。《發展的道理》
。北京：三聯書店，2002，頁 78。
108
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 4
The following diagram shows the percentage in world trade of a number of
mainland Chinese exports in 1999 that have comparative advantage.
Tungsten, antimony,
rare earth metal
60
Silk product
75
Bicycles
63
Garments
13
0
10
20
30
40
50
60
70
80
%
Reference:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》
。
北京：經濟管理出版社，2001，頁 20。
109
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 5
The diagram below shows the comparative advantage and comparative
disadvantage of mainland Chinese industries in 1992-1994.
1947.22
2000
1500
636.98
1000
428.12
359.51
236.86
500
Index
0
-223.68
-500
-702.31
-702.94
-1000
-869.35
-1500
-1708.52
J
I
H
G
F
E
D
C
B
A
-2000
A = Garments and other fiber products industry
B = Cultural, educational and sports articles industry
C = Leather, down and related products industry
D = Food industry
E = Textile industry
F = Ordinary machinery industry
G = Ferrous metals smelting industry
H = Raw materials and chemical products industry
I = Transport equipment and machinery manufacturing industry
J = Electronic and telecommunications equipment manufacturing industry
Reference:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》
。
北京：經濟管理出版社，2001，頁 23 至 24。
110
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 6
Compared with many other countries and regions, the cultivation of wheat, rice,
cotton and other grain and crops in China suffers from high production costs and
low quality. Their prices within the country are also 20% to 70% higher than
those in the international market. After the mainland’s accession to the WTO,
some produce has been squeezed out from the mainland market by imported
produce, even though such imports are restricted by quota and only account for
around 4% to 5% of the total grain production in the country.
Citation from:
莫榮。〈中國勞動力市場發展與預測〉。出自馬洪編，《中國市場發展報告：2000》。北京：中國
發展出版社，2000，頁 70 至 71。
Source 7
China’s accession to the WTO is both a rare opportunity for and a serious
challenge to the development of village and township enterprises. After entry into
the WTO, the mainland market is linked up with the international market.
Enterprises have to adjust their product structure in accordance with the trend of
the bigger market. However, some village and township enterprises on the
mainland suffer from old production equipment and an inability to exploit new
products, especially high-technology, refined and advanced products. As the
majority of their products are of low quality, these enterprises face a serious
challenge. On the other hand, China’s entry into the WTO gives village and
township enterprises the opportunity to import foreign capital, technology and
industrial products of a superior quality.
Citation from:
佟靜波、佟靜發、于雲波。
〈
「入世」對鄉鎮企業發展的影響和金融對策〉
（原載於《中國經濟快
訊周刊》
）
，2002 年 5 月 30 日，<http://www.qzagri.gov.cn/xwdetail/asp?ID=7151> [下載日期：
2003 年 5 月 27 日]。
111
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 8
Specifically, the effects of China’s entry into the WTO on its industries are as
follows:

Facilitates the export of industrial products with comparative advantages;

Lowers the prices of imported raw materials, hence reducing the production
costs of industries on the mainland and raising their competitiveness;

Changes the systems and policies of the mainland so as to make them more
attractive to direct foreign investment;

Facilitates the improvement of the structure of mainland industries and their
technological level;

Leads to competition between mainland products and imported products as
a result of the reduction in tariffs and the gradual loss of comparative
advantage in prices enjoyed by mainland commodities;

Creates the risk of elimination of traditional industries or low-technology
industries, e.g. the textile industry.
Citation from:
中國社會科學院工業經濟研究所編。
《中國工業發展報告 2001：經濟全球化背景下的中國工業》。
北京：經濟管理出版社，2001，頁 27 至 32。
112
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What advantages does China enjoy when it joined the WTO as a developing
country?

Do you think the mainland’s accession to the WTO affects its industrial
development? What are the effects? Does the mainland’s entry into the WTO bring
more positive effects than negative effects? Discuss your views with your
classmates.

Do you think the mainland’s accession to the WTO affects its agricultural
development? What are the effects? Does the mainland’s entry into the WTO bring
more positive effects than negative effects? Discuss your views with your
classmates.

Do you think the mainland’s accession to the WTO affects the development of
village and township enterprises? What are the effects? Does the mainland’s entry
into the WTO bring more positive effects than negative effects? Discuss your
views with your classmates.

Why does China’s entry into the WTO attract more direct foreign investment?

What are the challenges to the mainland’s financial sector with its joining of the
WTO?

Suppose you were the manager of a textile factory on the mainland. How would
you reorganize the labour force and reformulate the production and marketing
strategies in order to deal with the challenges created by the mainland’s entry into
the WTO?
113
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
What are the opportunities and challenges facing Hong Kong following our
country’s entry into the WTO?
Source 1
The mainland is Hong Kong’s largest trading partner. In 1999 the mainland’s total
trade with Hong Kong exceeded HK$1,000 billion, representing about 40% of
our total external trade … After China’s accession to the WTO, the mainland
market will open up further. This will bring substantial business opportunities for
Hong Kong enterprises as well as new business rivals from around the world.
Economic liberalization on the mainland will inevitably quicken the tempo of
development in mainland cities and they will also compete with Hong Kong.
Indeed, opportunities and competition come hand in hand. While we cannot have
one without the other, our gains should far outweigh any losses.
Citation from:
Hong Kong Special Administrative Region Government. 2000-2001 Budget Speech,
<http://info.gov.hk/fstb/tb/budget/budget2000-01/english/eindex.htm> [accessed 27 May 2003].
114
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 2
The diagram below shows the extent of connection between the Hong Kong
economy and the mainland economy in the first half of 1999.
70
60
50
40
%
60%
30
20
30%
29.6%
10
0
Percentage of
exports to the
mainland in the
total exports of
Hong Kong
Percentage of rePercentage of
exports from the mainland tourists
mainland in the in the total number
total of Hong
of tourists to Hong
Kong's re-exports
Kong
Reference:
陳秀珍。
〈CDI 香港與內地經濟聯繫指數研究〉
，
《信報財經月刊》
，期 275，2000 年 2 月，頁 14。
115
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 3
This diagram shows the percentage of Hong Kong’s re-exports to the mainland in
1998-2001.
2001
496,574
2000
488,823
1999
399,188
1998
407,366
Million HKD
Reference:
政府統計處。《香港統計年刊 2002 年版》
。香港：香港特別行政區政府統計處，2002，頁 52。
Source 4
Facing the challenges brought by the mainland’s accession to the WTO, more and
more mainland Chinese enterprises (especially enterprises that produce household
electrical appliances) have acquired an international outlook, putting much effort
into production and operation in accordance with the demand of the international
market … These enterprises will compete with Hong Kong enterprises, possibly
reducing the latter’s share in the international market.
Citation from:
彭革。＜中國加入 WTO 後對香港的長遠影響＞。
《信報財經月刊》
，期 280，2000 年 7 月，頁 6。
116
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 5
This diagram shows the comparison in the capacity of airports in Hong Kong and
three cities on the mainland.
Passengers
33,100,000
Freight (ton)
24,200,000
21,000,000
Hong Kong
Beijing
Shanghai
532,000
810,000
589,000
2,200,000
14,300,000
Guangzhou
Reference:
Citrinot, Luc. “Airport growth on mainland China threatens Hong Kong’s strategic role”. In Jane’s
Aerospace, 19 February 2003,
<http://www.janes.com/aerospace/civil/news/jar/jar030219_1_n.shtml>
2003].
117
[accessed
20
April
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 6
With China’s accession to the WTO, tariffs are reduced and production costs
decline. The further opening-up of the mainland market intensifies global
competition, posing a serious challenge to Hong Kong business in the market of
the mainland. In face of fierce competition, Hong Kong traders can maintain their
superiority only by strengthening their marketing strategies …
A scholar has pointed out that the mainland’s entry into the WTO would have
unfavourable effects on Hong Kong. It will lead to changes in the current
mainland systems in order to attract foreign investment, e.g. a unified taxation
system and improved contract and company law. This will have a negative effect
on Hong Kong business because the mainland will no longer require Hong Kong
as a middleperson.
Citation from:
（作者不詳）。
〈中國加入世貿對香港家庭電器及影音業經營前景的影響〉
，
<http://www.geocities.com/in_trade99/index.htm> [下載日期：2003 年 6 月 3 日]。
118
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 7
Jospeh Yam, Chief Executive of the Hong Kong Monetary Authority, said, “The
broad implication of the mainland’s entry into the WTO for Hong Kong can be
divided into near-term impact and longer-term impact. The former is positive for
Hong Kong. For general trade, our domestic exports to the mainland will largely
be unaffected by the WTO terms. Our re-export trade, involving the movement of
goods to and from the mainland through Hong Kong, will be considerably
boosted, and should raise our annual GDP growth rate by 0.5% to 1%.
In terms of financial, technical and professional services, which are increasingly
taking centre stage in Hong Kong’s economy, the near-term outlook is even more
encouraging. These industries will be considerably boosted and enriched by
Chinese enterprises that are seeking to upgrade their capabilities and governance
methods to handle increased business and meet foreign competition, and by
overseas investors who need advice on how to make the best of the opportunities
on the mainland.”
Citation from:
Hong Kong Special Administrative Region Government. Press Release: “The WTO: China’s future and
Hong Kong’s opportunity”, 4 September 2000,
<http://www.info.gov.hk/gia/general/200009/04/0904084.htm> [accessed 30 June 2003].
119
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What does the close connection between the Hong Kong economy and the
mainland economy reflect?

What is the significance of the growth in value in Hong Kong re-exports as shown
in Source 3?

How does the change in the economic environment on the mainland as a result of
the country’s entry into the WTO affect Hong Kong’s small and medium
enterprises?

What effects does the development of sophisticated manufacturing industries on
the mainland have on Hong Kong enterprises in the international market?

Our country’s accession to the WTO will affect the air transport sector in Hong
Kong, Shanghai, Beijing and Guangzhou. What do you think are the effects? How
can Hong Kong maintain its superiority in air transport in face of fierce
competition? Discuss your views with your classmates.

In what direction do you think should Hong Kong develop its economy after the
mainland’s entry into the WTO?
120
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Suggested question for enquiry:
What are the roles played by Hong Kong economy in our country’s economic
development?
Source 1
Hong Kong is a mature market economy … This, together with a similar cultural
background as the mainland, enables Hong Kong to be a major reference model
for the development of a socialist market economy in the mainland of China.
Through its economic interaction with Hong Kong, the mainland can not only
acquire the necessary capital and commodities, but also learn how the market
operates and familiarizes itself with the international rules of the market
economy.
Citation from:
陳秀珍。〈CDI 香港與內地經濟聯繫指數研究〉。
《信報財經月刊》
，期 275，2000 年 2 月，頁 15
至 16。
Source 2
The following diagram shows the economic links between Hong Kong and the
mainland in 2001.
Percentage of Hong
Kong’sofre-exports
in and
Percentage
Hong Kong imports
the
total
trade
exports
in the
total value
value of of
the
mainland's
imports and exports
the
mainland.
11%
Percentage of Hong
Kong investment
in the
Percentage
of Hong Kong investment
in the actual
utilization
of foreign
total
external
direct
investment inon
thethe
mainland
investment
50%
mainland
0
5
10
15
20
25
30
35
40
45
Reference:
Hong Kong Special Administrative Region Government. Hong Kong 2001 (Online version), “Structure
and Development of the Economy”,
<http://www.info.gov.hk/yearbook/2001/ehtml/04/index.htm> [accessed 11 September 2003].
121
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 3
The diagram below shows the value of trade between the mainland and its major
trading partners in 2000.
900
831.7
800
100 million USD
700
744.7
690.4
600
539.5
500
395.2
400
345
300
200
100
0
EU
USA
Japan
Hong Kong
S. Korea
ASEAN
Reference:
曾培炎。《2001 年中國國民經濟和社會發展報告》
。北京：中國統計出版社，2001，頁 199。
Source 4
Hong Kong is now a major capital-raising centre for the mainland. So far, 87
mainland companies are listed on the Stock Exchange main board and on the
Growth Enterprise Market, having raised HK $245.6 billion in total.
Citation from:
Hong Kong Special Administrative Region Government. 2000-2001 Budget Speech.
<http://info.gov.hk/fstb/tb/budget/budget2000-01/english/eindex.htm > [accessed 27 May 2003].
122
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 5
Hong Kong is a window of our country and a channel between the mainland and
foreigners. The city has played a critical role in bringing the mainland into an
open world and into the international financial system.
Citation from:
郭楚。＜中港金融體系與 WTO＞。
《信報財經月刊》
，期 280，2000 年 7 月，頁 13。
Source 6
By the end of 1993 the value of Hong Kong investment in the manufacturing
industries in the Pearl River Delta reached US$7 billion. The number of factories
established by Hong Kong investors amounted to more than 30,000. Hong Kong
investment has accelerated the industrialization of the Delta area, leading to the
emergence of many new industries in Shenzhen, Dongguan, Shunde and other
cities. A majority of traditional villages in the Delta area have also developed into
modernized and industries-based towns and cities.
The movement of Hong Kong’s manufacturing industries across the border not
only promotes the upgrading of industries and economic development of the Pearl
River Delta, it also creates a lot of employment opportunities on the mainland. In
the Delta area alone, the number of mainland workers employed in Hong
Kong-invested factories was 3.2 million in 1993. They included local workers in
the Pearl River Delta, but most were migrant workers across the country.
Citation from:
陳秀珍。
〈CDI 香港與內地經濟聯繫指數研究〉
。
《信報財經月刊》
，期 275，2000 年 2 月，頁 15。
123
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Source 7
Two decades of substantial investment has provided us with a solid foundation on
which we can further contribute to the mainland’s economic development after its
entry into the WTO. Despite the rapid economic development of Chinese cities,
Hong Kong, as a more developed economy, has not lost any of its advantages.
This will enable us to continue to give strong support to our country as it opens to
the world.
Citation from:
Hong Kong Special Administrative Region Government. 2003 Policy Address by the Chief Executive
the Honourable Tung Chee-hwa. Hong Kong: Printing Department, 2003, p.14.
124
Core Module III
Issue 1 – How desirable are the current strategies of China’s economic development?
Key Point b – The reform of state-owned enterprises, enterprises of the non-public sector and China’s
entry into the World Trade Organization (WTO)
Questions for discussion:

What is the significance of Hong Kong’s market economy for the development of
the mainland’s socialist market economy?

How is Hong Kong doing among mainland’s trading partners?

What is the role played by Hong Kong’s financial system in the mainland’s
economic development?

How has Hong Kong influenced the economic development of the Pearl River
Delta?

Do you think the Hong Kong economy has an influence on the mainland’s
economy? Discuss your views with your classmates.
125
Issue 2
What is the impact of reform and
opening-up policies on China’s future
development?
126
Key Point a
Political development
127
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Teachers’ References
Deng Xiaoping, the late Chinese leader, stated that when the country carried out
economic reforms, it would also begin to implement political reforms. What he meant
was that reform of state-owned enterprises would result in the separation of the
government and enterprises and the decentralization of power. The opening-up of the
country and economic reform would inevitably lead to political reform. Early political
reforms focused on separating the government from enterprises and the
decentralization of power. Later reforms concentrated on streamlining the
administrative system of the government. The recent reform trend is the establishment
of a new government structure with separate powers of decision-making, execution
and supervision, with the provision of services as the aim. Since 2002, the Central
People’s Government has introduced new criteria in the selection of leaders for
various regions: high educational qualifications and professional knowledge (e.g.
legal knowledge) and young age. This will undoubtedly bring new energy into the
government. Apart from the Central People’s Government and local people’s
governments, reforms are also carried out in villages, with villagers having greater
autonomy and greater political participation.
Most scholars agree that there has been substantive political development on the
mainland in the past two decades. In the past, people on the mainland did not have
many opportunities to participate in government affairs and to express their views on
political development. But, despite the increase in the number of channels through
which they can participate in political affairs, the majority of people are still apathetic.
However, the Central People’s Government is continuing to give people more
opportunities to participate in politics by various ways, e.g. managers of private
enterprises can become delegates to the National People’s Congress and other
consultative organizations.
In what direction should China’s political development go? This used to be a topic of
research for interested scholars on the mainland and overseas. Is the democratic
system of Western countries a perfect system? Is “socialism with Chinese
characteristics” without any merit? Some scholars have pointed out that the
democratic system in western countries is not absolutely democratic and has problems
of its own. The former Chinese President, Jiang Zemin, emphasized that western-style
democracy is not suitable to the situation in China. As such, what are the viable
alternatives that both fit the national situation and allow it to link up closely with
128
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
global development?
Suggested Learning Objectives
Suggested questions
for enquiry
Learning objectives
How do economic
development and the
opening-up policies
To analyze the relationship
between the mainland’s
economic reform and its
affect China’s
political
development? What
attitude do people
living on the
mainland hold
towards political
development?
[2 periods]
political development and
reform;
To discuss the importance of
political reforms for the national
economy;
To understand the attitude held
by people living on the mainland
towards political development;
To discuss the importance of
political development for people
-
-
-
living on the mainland.
What political
reforms have been
launched in the rural
sector and different
levels of
government?
[1 – 2 periods]
-
To understand the reforms
carried out in the rural areas,
local people’s governments and
the Central People’s
Government;
To analyze the effectiveness of
these reforms;
To discuss the effects of reforms
on the state and people.
129
Remarks
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Suggested questions
for enquiry
What are the
problems and
prospects for political development in
China? What are the
options for political
development in China
Learning objectives
To understand the political
framework of China;
To discuss viable alternatives for
the mainland’s political future.
in the future?
[2 periods]
Remarks
Allow students to express
their own views first. Ask
them the following
questions: What are the
merits and demerits of
western-style democratic
systems? What are the
merits and demerits of
socialism with Chinese
characteristics? Is the
federal system practised
in the United States
suitable to the mainland?
130
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Suggested questions for enquiry:
How do economic development and the opening-up policies affect China’s political
development? What attitude do people living on the mainland hold towards political
development?
Source 1
The following are extracts from speeches by the late Chinese leader Deng
Xiaoping on 18 August 1980, 3 September and 13 September 1986.
(1980)
Bureaucracy remains a major and widespread problem in the political life of our
Party and state … Our leading organs at various levels have taken charge of many
matters which they should not and cannot handle, or cannot handle efficiently.
These matters could have been easily handled by the enterprises, institutions and
communities at the grass-roots level, provided we had proper rules and
regulations and they acted according to the principles of democratic centralism.
Difficulties have arisen from the custom of referring all these things to the
leading organs and central departments of the Party and government: …
(1986)
When we raised the question of reform we had in mind, among other things,
reform of the political structure. Whenever we move a step forward in economic
reform, we are made keenly aware of the need to change the political structure. If
we fail to do that, we shall be unable to preserve the gains we have made in the
economic reform and to build on them, … In essence, the purpose of political
restructuring is to overcome bureaucratism, develop socialist democracy and
stimulate the initiative of the people and of the grass-roots units … Its contents
should be as follows. First, we should separate the Party and the government …
Second, we should transfer some of the powers of the central authorities to local
authorities … Third, we should streamline the administrative structure, and this is
related to the devolution of powers. … However, in reforming our political
structure we must not imitate the West … Of course our present structure of
leadership has certain advantages. For example, it enables us to make quick
decisions, …
131
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Note: The Party and the state refer to the Communist Party of China and the Chinese
government respectively. The separation of the Party and the state has been the core of
political reform since 1978.
Citation from:
People’s Daily Online (ed.). Selected Works of Deng Xiaoping,
http://english.peopledaily.com.cn/dengxp/ [accessed 12 June 2003].
Source 2
Under the guidance of Deng Xiaoping’s theories in the last 20 years, China’s
economic reform has achieved great progress … However, the progress of reform
of state-owned enterprises is relatively slow … Deng pointed out that the
separation of the state and enterprises is both an economic reform and a political
reform … The promotion of reform of government agencies and the separation of
the state and enterprises are an inevitable requirement and urgent need caused by
situations both inside and outside the country … The Ninth National People’s
Congress (1998) adopted the Decision on the Institutional Restructuring of the
State Council and “The Plan Concerning Institutional Restrucuturing of the State
Council” … The key point of the reform is to change the functions of the
government to those of regulating the economy and managing social and public
services. The rights of governance of enterprises and of making investment
decisions have genuinely been passed to enterprises … According to statistics,
more than 200 functions have now been decentralized to local enterprises or
transferred to social organizations and more than 100 functions have been
internally transferred among various departments of the State Council.
Citation from:
中國國情研究會編。《中國國情報告 1999》
。北京：中華工商聯合出版社，1999，頁 20 至 21、
48。
132
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 3
When reporting his work for the last five years (1996-2000), Premier Zhu Rongji
said, “In order to adjust to the development of a socialist market economy and the
requirements of joining the WTO, the State Council has put in order all the 756
administrative rules issued before the end of 2000, abolishing 71 and declaring 80
to be ineffective.”
Summarized from:
《香港商報》，2003 年 3 月 6 日。
People’s Daily Online, 28 February 2003,
<http://english.peopledaily.com.cn/200302/28/print20030228_112445.html> [accessed 4 March
2003].
Source 4
A new round of reform of political agencies will officially start in April (2003)
pending a new session of government. This will be the fourth round of large-scale
reform of government agencies in 20 years since 1982, 1988 and 1998. The key
point of this round of reform is no longer the streamlining of government
departments but the change of government functions. The latter refers to the
appropriate separation of the original and internal decision-making, execution and
supervisory powers of the government. While these three powers will be
separated, they will also be coordinated.
Summarized from:
《大公報》
，2003 年 2 月 24 日。
《明報》
，2003 年 3 月 3 日。
133
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 5
The Standing Committee of the National People’s Congress, the most powerful
organ in the mainland of China, will become younger and more professional.
More than 20 new members will join the Standing Committee. Most of them are
at the age of 40 years or over, with good education, working experience and legal,
economics and other professional knowledge.
Summarized from:
《大公報》
，2003 年 2 月 25 日。
《明報》
，2003 年 3 月 10 日。
Source 6
There is change in the new sessions of the National People’s Congress (NPC) and
the Chinese People’s Political Consultative Conference (CPPCC), i.e. an increase
in the number of delegates from enterprises of the non-public sector. For
example, Xu Guanju, President of Chuanhua Group in Zhejiang; Yin Mingshan,
Chairman of the Lifan Industrial Group in Chongqing; and Zhang Zhiting, CEO
and Chairman of the Shenqi Group in Guizhou, have become members of the
CPPCC National Committee.
Summarized from:
《大公報》
，2003 年 2 月 25 日。
《明報》
，2003 年 3 月 10 日。
134
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 7
The following table shows how people living on the mainland assess their
government’s performance in 1990.
Problems
Inadequate
Just right (%)
concern (%)
Too much
Not interested
concern (%)
(%)
Inflation and
dissatisfaction
Price control
55.7
19.7
1.9
22.7
Against corruption
53.8
17.9
3.0
25.3
Against crimes
47.1
28.6
3.0
21.4
Against
46.8
16.8
1.8
34.6
21.2
25.2
5.2
48.4
Private enterprises
18.2
25.4
9.4
47.1
Economic reform
17.9
28.6
4.1
29.4
Political reform
17.6
26.6
2.8
52.9
bureaucracy
Reforms
Against the
liberalization of
the capitalist
class
Total number of people surveyed：2,896
Note: “Not interested” is a mixture of “unknown” and “unanswered”.
Adapted from:
黎安友。《蛻變中的中國：政經變遷與民主化契機》
。台北：麥田出版，2000，頁 270。
135
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 8
This table shows part of the results of a survey conducted in China in 1990.
Do you often talk about politics and national affairs with other people?
Age group
Rural residents (%)
Urban residents (%)
18-30
34.6
59.5
31-45
29.8
62.7
46-55
30.4
62.3
56 and above
21.7
46.1
Note: A total of 2,896 questionnaires were collected.
Citation from:
Shi, Tianjian. Generational Differences in Political Attitudes and Political Behaviour in China. Hong
Kong: World Scientific Publishing Co Pte. Ltd. 1999, p.15.
Source 9
This table shows part of the results of a survey conducted in China in 1990.
In the past three years, did you express your views on political affairs in the
following ways? (i) Directly to government leaders at various levels; (ii)
Through political groups; (iii) Via elected representatives; (iv) Write to the
government department(s) concerned; (v) Write to newspaper(s); (vi) Write to
government complaints units.
Age group
Male (%)
Female (%)
18-30
48.1
36.5
31-45
55.7
32.7
46-55
52.6
45.2
56 and above
44.8
22.3
Note: A total of 2,896 questionnaires were collected.
Citation from:
Shi, Tianjian, Generational Differences in Political Attitudes and Political Behaviour in China. Hong
Kong: World Scientific Publishing Co Pte. Ltd, 1999, p.23.
136
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Questions for discussions:

What are the problems with China’s political structure? What are the
consequences of these problems?

How important are the reforms of China’s legal and political structure on
economic development?

What do you think is the significance of leaders of individually owned enterprises
becoming delegates to the National People’s Congress and the Political
Consultative Committee? What are the likely effects of this development?

Briefly explain the key points of the mainland’s political reform in the last 20
years. (Hint: Students should think in terms of the streamlining of the government
structure, reduction in the number of government employees, the raising of
efficiency and changes in government functions.)

To what extent do you think economic reforms in China in the last 20 years have
led to political reform?

What attitude do Chinese people hold towards politics and national affairs? (Ask
students: Are Chinese living on the mainland interested in politics?)

Do you think there are differences in the degree of concern and knowledge of
national affairs between rural residents and urban residents? Discuss your views
with your classmates.
137
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Suggested question for enquiry:
What political reforms have been launched in the rural sector and different levels of
government?
Source 1
The abolition of the people’s communes in 1983 led to the establishment of
villagers’ committees, the lowest level of autonomous organization in the
mainland of China. Members were appointed by the authorities one level above.
Since 1988, direct elections have been held for villagers’ committees, with the
chairman, vice-chairmen and members being elected by the villagers. Villagers
over 18 also have the right to stand for election.
Citation from:
Zhang Lijia and Calum MacLeod. “Yang Yonghe: The Election Campaign”. In China Remembers,
Hong Kong: Oxford University Press, 1999, p.279.
Source 2
Since 1982 the state has been reconstructing the governance of villages. This
includes:

The gradual development of an election system with direct election,
multi-candidates and secret ballot as the major characteristics.

The nomination of candidates by villagers.

The development of consensus on important matters.

Openness and transparency of villagers’ committees so that they can be
checked by villagers.
Adapted from:
中國國情研究會編。《中國國情報告 1999》
。北京：中華工商聯合出版社，1999，頁 5 至 8。
138
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 3
The National People’s Congress (NPC) is a Parliament as in other countries.
According to the Constitution, the NPC is the highest organ of state power
composed of deputies elected by provinces, autonomous regions, municipalities
directly under the Central Government, and by the armed forces. All minority
nationalities are entitled to appropriate representation.
The NPC used to be regarded by the West as a rubber stamp without any real
power. Since 1978 the NPC’s power structure has undergone changes.
Considerable democratic elements have been introduced to the NPC. For
example, units at county level and below county level can elect their
representatives by direct election with multi-candidates in which the number of
candidates must exceed the number of elected seats by 50% to 100%. Today, the
NPC is no longer a rubber stamp but the driving force in the continuous
development of the mainland’s legal system. Between 1979 and 1994 the NPC
passed 251 rules and regulations, a considerable increase over seven rules and
regulations passed between 1966 and 1978. At the same time, the NPC also
performs its function as a watchdog of the government.
Summarized from:
Zheng Yongnian and Li Jinshan. “The National People’s Congress and Its Electoral System”. In Zheng,
Li and John Wong (eds.). China After the Ninth National People’s Congress: Meeting
Cross-Century Challenges. Hong Kong: World Scientific Publishing Co. Pte. Ltd; Singapore:
Singapore University Press, 1998, pp.9-14;
中國網 – 〈人民代表大會的性質是甚麼？〉
，2003 年 2 月，
<http://www.10thnpc.org.nc/chinese/zhuanti/23770.htm> [下載日期：2003 年 6 月 10 日]。
139
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 4
Beginning in July 1999 reforms have been carried out in the agencies of the Party
and the state at the provincial level. In 2000 the number of government agencies
at the provincial level was reduced from 55 to 40. In terms of the number of
employees, the administrative reorganization of government agencies at the
provincial level resulted in an average streamlining rate of 48.2% … The
functions of each government department were redefined in order to avoid
overlapping.
Citation from:
人民網 -〈省級黨政機構改革基本完成〉，2001 年 2 月 3 日，
<http://www.peopledaily.com.cn/BIG5/shizheng/review/20010203.html> [下載日期：2003 年 6
月 10 日]。
Source 5
One of the key features of political reform at the provincial level is the separation
of the Party from the day-to-day operation of government departments and
enterprises. The governance of enterprises by the government will be replaced by
indirect control. According to the Party leadership, while the state would take
steps to increase the masses’ awareness of political participation, local people’s
congresses at different levels would promote democratic centralism and
“multi-party” co-operation.
Citation from:
Hsu, Immanuel C.Y.. The Rise of Modern China. New York: Oxford University Press, 2000, p.893.
140
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 6
Beginning in 1998 the State Council has been undergoing continuous reform. The
number of departments which make up the State Council has been reduced from
40 to 29. The number of agencies within the departments has been streamlined by
one-quarter and the number of workers reduced to half. More than 200 functions
have been transferred to enterprises, social organizations and local people’s
governments. With the decentralization of the functions of the State Council and
the streamlining of the organizational structure, efficiency is also raised.
Summarized from:
中國國情研究會編。《中國國情報告 1999》
。北京：中華工商聯合出版社，1999，頁 18 至 23。
《大公報》
，2003 年 3 月 4 日。
Source 7
The State Council is carrying out reform of government agencies again and this is
a necessary part of economic reforms in China. Since the reform of the State
Council in 1998, there has been considerable streamlining of the government.
However, compared with developed countries, the Central People’s Government
is still overstaffed. According to a source from a department of the State Council,
this round of reform is not only aimed at streamlining the government, but also at
“establishing a new form of government in accordance with the principles of
simplification, unity and efficiency and the requirement for the separation of the
powers of decision-making, execution and supervision.”
Summarized from:
《大公報》
，2003 年 2 月 24 日。
《明報》
，2003 年 3 月 3 日。
141
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Questions for discussion:

What political reforms took place in the rural areas on the mainland in the last 20
years? What were the aims of these reforms?

What reforms were carried out in local people’s governments? What are the
outcomes of these reforms?

The National People’s Congress gradually introduced democratic elements in the
process of reform. How important is it in the political development of China?

What reform measures have been carried out in the State Council since 1998?
What are the merits of these measures?

How do you assess the political reform on the mainland in the last 20 years?
142
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Suggested questions for enquiry:
What are the problems and prospects of political development in China? What are
the options for political development in China in the future?
Source 1
[In the late 1980s] Under the present political power structure in China, once a
certain decision has been made by a core leader such as Deng Xiaoping, no one
else can change it. Starting in 1978, the key question of political reform is
whether core power should be expanded so as to prevent personal dictatorship.
Although core power was expanded in these 11 years, core leaders still have the
final say.
Citation from:
鄒讜。
《二十世紀中國政治：從宏觀歷史與微觀行動的角度看》
。香港：牛津大學出版社，1994，
頁 160 至 162。
Source 2
Despite the fact that political reform in China does not include Western-style free
elections, a free press, the separation of the three powers and alternate ruling by
different political parties, it raises administrative efficiency, streamlines the
unwieldy bureaucratic structure and eliminates overstaffing. The development of
an effective judiciary system allows people’s rights to be protected from
infringement by officials and illegitimate procedures. Furthermore, bureaucratic
agencies have been rationalized from top to bottom, and a civil service based on
the merit system established … Since the separation of Party and state functions
affects the vested interests of millions of people, its implementation would be
very slow and difficult. Besides, the Four Cardinal Principles* not only eliminate
the possibility of any government other than that of the Communist Party but also
prohibit any freedom beyond what is permitted by the Party.
*The four principles are “to keep to the socialist road and to uphold the people’s democratic
dictatorship, leadership by the Communist Party, and Marxism-Leninism and Mao Zedong
Thought”.
Citation from:
Hsu, Immanuel C.Y.. The Rise of Modern China. New York: Oxford University Press, 2000, p.893.
143
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 3
Representatives of non-State enterprises appeared for the first time at a provincial
congress of the Communist Party of China (CPC), which opened in Guangdong
Monday. Among 880 delegates at the Ninth Congress of CPC Guangdong
Provincial Committee, eight were selected from private enterprises, three from
joint ventures and seven from joint-stock companies. This is an unprecedented
happening in the history of the province’s Party congress. … Observers say that
the participation of the new delegates will bring “fresh blood” and more energy to
the CPC congress in Guangdong, which is expected to improve democratic
development in China.
Citation from:
People’s Daily Online. “Private Business Representatives Show up at Local CPC Congress”, 21 May
2002, <http://english.peopledaily.com.cn/200205/21/eng20020521_96085.shtml> [accessed 10
June 2003].
144
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 4
A triangular power structure has gradually been developed between the State
Council, the National People’s Congress (NPC) and the Political Bureau of the
Central Committee of the Communist Party. The Political Bureau determines
national policy, but it would first obtain the consensus of the NPC and the State
Council. The power of the NPC is rising. This, together with the checks and
balances and coordination of the triangular power structure, implies that the
Political Bureau of the Central Committee of the Communist Party of China no
longer holds political power alone.
The Political Bureauof
the Central Committee of
the CPC
The National
People’s Congress
The State
Council
As some NPC delegates and leaders in the State Council are also members of
the Political Bureau, an interlocking system is formed, giving the NPC and the
State Council the right of audience on some important matters.
Under the system, this represents the influence of the Political Bureau on the
NPC and the State Council.
Because of the rise of the NPC’s constitutional right and the interlocking
system, its influence on the State Council also increases.
145
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Adapted from:
Zheng Yongnian and Li Jinshan. “China’s Politics After the Ninth National People’s Congress: Power
Realignment”. In Zheng, Li and John Wong (eds.) China After the Ninth National People’s Congress:
Meeting Cross-Century Challenges. Hong Kong: World Scientific Publishing Co. Pte. Ltd;
Singapore: Singapore University Press, 1998, pp.51-92.
Source 5
In the mainland of China, some local elections have been carried out. It would be
helpful to the country’s democratization if the Communist Party of China would
promote election of provincial governors and delegates to the National People’s
Congress. Election not only helps the development of political parties but also
enhances people’s understanding of the democratic system and democratic
lifestyle through participation in political activities.
Citation from:
唐文方。
〈臺灣經驗與中國大陸的政治改革〉
。出自黃小明編，
《再看臺灣：政治、社會、經濟和
兩岸關係》
。香港：香港社會科學服務中心，1996，頁 65。
Source 6
In a published speech on 31 May 2002, Jiang Zemin, the Secretary-General of the
Central Committee of the Communist Party of China, made mention of political
reform and development. He pointed out that: 1) Political reform must be
promoted under the Four Cardinal Principles; 2) The basis for a socialist
democracy is the continuation of leadership by the Communist Party and rule by
the people and by the law; 3) Political reform must be carried out in accordance
with the situation on the mainland; a political structure with “Chinese features”
must be developed and it must not be a copy of the Western model; 4) The
progress and objectives of political reform in the mainland of China are to focus on
the development of a socialist democratic political structure and its
institutionalization.
Summarized from:
《大公報》
，2002 年 6 月 4 日。
146
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Source 7
The following passage is an extract of a speech by the former Chinese President,
Jiang Zemin, made at a grand gathering marking the 80th founding anniversary of
the Communist Party of China.
… Correctly understand and fulfill the requirements of the “Three Represents” in
an all round-way.
 In order to remain a representation of the requirements of the development of
China’s advanced productive forces, …


To make our Party must forever represent the orientation of the development
of China’s advanced culture …
To always represent the fundamental interests of the overwhelming majority of
the Chinese people, …
… In respect of democratic centralism, all comrades of the Party must strengthen
the concept, strictly execute the principle and raise their ability to implement it.
Comrades must also put much effort to learn and adjust to the art, form and
method of leadership required by new situations and new missions in order to
uphold the leadership of the Party, promote people’s democracy, act strictly
according to the law and respect rules … Each system within democratic
centralism, the leadership of the Party and the working system must be further
improved so as to guarantee the correct implementation of democratic centralism.
Summarized and translated from:
People’s Daily Online. “Full Text of Jiang’s Speech at CPC Anniversary Gathering (II)”. 1 July 2001,
<http://english.peopledaily.com.cn/200107/01/eng20010701_73927.html>
《人民日報》，2001 年 7 月 2 日。
147
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point a – Political development
Questions for discussion:

Do you agree that the separation of the Party and the state is a huge and difficult
task?

To what extent do you think the unity of the Party and the state influences the
political development of China? Discuss your views with your classmates.

What is the significance of private enterprises being represented at the provincial
congress of the Communist Party of China?

What is the significance of the triangular power structure (National People’s
Congress – State Council – Political Bureau of the Central Committee of the
Communist Party) in the political development of the mainland?

Do you agree with Chinese leaders that Western-style democratic system is not
suitable for the mainland? Discuss your views with your classmates.
148
Key Point b
Sustainable development
149
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Teachers’ References
China’s economic development in the last 20 years was rapid and the living standard
of the people has improved greatly. But with economic growth, industrial
development and increase in population, the environment has also continued to
deteriorate.
The current problems are:

Population increase:
This is a global problem. Population increase poses a serious threat to the
ecological environment and leads to the depletion of non-renewable resources
owing to increased consumption. In addition, the continued rise in population in
developing countries results in the rapid increase in the number of people who
suffer from poverty. The sustained growth in the mainland’s population in the
1950s to 1970s resulted in a population figure as high as 700.3 million in 1965.
Today, the population of China has reached 1.3 billion. Despite the “one child
policy”, threats to future development remain because of limited land and
resources. The number of people who suffer from poverty on the mainland is great
and most of them live in rural and mountain areas. As they have low living
standard and education level, the government needs to help them by increasing its
investment. This will put a heavier fiscal burden of the state. To a certain extent,
the country’s future development will be hindered by the low quality of the
population.

Shortage in resources and unrestricted exploitation:
Since World War II, human consumption of natural resources has continued to rise.
While this leads to economic prosperity, it also threatens global future
development by depleting non-renewable resources. The mainland used to have
low resources per capita. This, coupled with urbanization and the higher spending
power of the urban population, puts a lot of pressure on the country.
150
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development

Environmental changes:
Excessive exploitation of natural resources by humans causes changes in
environmental conditions. Soil, forests and oceans suffer from accelerated
invasion by humans. Furthermore, the continued discharge of industrial waste
worsens the natural environment and seriously affects the survival of the next
generation. In the last 20 years, rapid industrial development on the mainland
brought increasingly serious environmental problems. Apart from polluted rivers
and lakes and excessive lumbering, other environmental problems include acid
rain, dust-storm, sandstorm and desertification caused by industrial development
and urbanization.
The mainland’s goal is sustainable development. The government carries out
environmental protection and the simultaneous preservation of cultural heritage and
the maintenance of economic growth. It also advocates and guides green movements
and publicizes the importance of environmental protection.
Suggested Learning Objectives
Suggested questions
for enquiry
Learning objectives
What is the impact of China’s
industrialization and
urbanization on the
natural environment? [2 periods]
-
Remarks
To analyze environmental
Ask students to cite the
problems caused by the
two poems in Source 4.
mainland’s industrialization and
urbanization;
To discuss the effects of
environmental problems on
people;
To discuss the effects of
environmental problems on the
national economy.
151
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Suggested questions
for enquiry
Learning objectives
How should we strike a balance between
economic
development and
environmental
conservation?
[1 – 2 periods]
To understand the relationship
between humans, environmental
protection and economic
development and the role of
humans in this triangular
relationship.
Is the strategy of
“sustainable
development” a
To understand the meaning of
sustainable development;
To analyze the importance of
-
necessary and viable
choice for China?
[1 – 2 periods]
-
sustainable development to the
mainland’s future development;
To discuss whether sustainable
development is a viable choice
for China.
What strategies and
To analyze the various strategies
-
policies can be
adopted to ensure
sustainable
development?
[1 – 2 periods]
and policies of sustainable
development currently
implemented and their
effectiveness.
Can economic
development coexist
with the preservation of cultural heritage?
[1 – 2 periods]
To understand what world
heritage is;
To become familiar with the
distribution of world heritage
sites on the mainland;
-
To examine the strategy of
“simultaneous protection and
utilization” and to analyze the
feasibility of this strategy.
152
Remarks
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Suggested question for enquiry:
What is the impact of China’s industrialization and urbanization on the natural
environment?
Source 1
Coal is China’s major energy source. Sulphur dioxide discharged during the
burning process of coal is exactly the chief ingredient of acid rain. In 1989,
reports of acid rain jeopardizing crops were made in Sichuan, Guangdong, Hunan
and Jiangxi Provinces. Acid rain also harms forests, soil and buildings. By 2001
acid rain pollution has become more serious in the southern region, with acid rain
falling over 90% of the cities of the Acid Rain Control Zone.
Note: There are 107 cities in the Acid Rain Control Zone.
Summarized from:
中國國務院。《中國 21 世紀議程：中國 21 世紀人口、環境與發展白皮書》。北京：中國環境
科學出版社，1994，頁 160 至 161。
Gallagher, Michael G.. China Environmental Report. Rockville, Md: Government Institutes, 1996,
p.34.
State Environmental Protection Administration. Report on the State of the Environment in China 2001,
<http://www.zhb.gov.cn/english/SOE/soechina2001/english/2-preface.htm>
2003].
153
[accessed
5
June
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 2
This table shows the ecological and environmental problems on the mainland in
2001.
Total volume of waste
water discharged
42.04 billion tons, of which the discharge of industrial
waste water amounted to 20.07 billion tons, a 3.5%
increase over 2000
Total volume of sulphur
dioxide discharged
19.478 million tons, of which discharge from
industrial sources was 15.666 million tons
Volume of industrial
solid waste produced
887 million tons, an increase of 61 million tons over
2000
Total land area
127.6158 million hectares
Total land area affected
by soil erosion
About 3.56 million square kilometres, of which the
area of water erosion amounted to 1.65 million square
kilometres and that of wind erosion 1.91 million
square kilometres
Summarized from:
中國統計師事務所編。《中國國情報告 1978-1995》
。北京：中國計劃出版社，1996 頁 5 至 6。
State Environmental Protection Administration. Report on the State of the Environment in China 2001,
<http://www.zhb.gov.cn/english/SOE/soechina2001/english/2-preface.htm>
[accessed
5
June
2003].
Source 3
Dust-storm and sandstorm are weather phenomena in which strong winds pass
over a dry area with a lot of dust on the ground or over a desert, blowing up a
large amount of dust and sand into the air and making the sky so murky that
visibility is reduced to less than one kilometer. They can make the near-ground
environment very harsh and are a potential threat to aircraft. Although we cannot
expect to eliminate dust-storm and sandstorm because they are uncontrollable by
humans, we can reduce their impact as much as possible by reinstating vegetation
and reducing the area of uncovered land.
Summarized from:
Ye Jun. “Storm Warning in Spring China”. China Daily, 21 March 2003.
154
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 4
The following are extracts of two poems describing pollution in China. The title
is “Landscape Spoiled: What I Saw in a Particular Industrial Area”
Black “dragons” danced in the sky,
Black “clouds” rolled over the head,
Black “rain” came down in torrents,
The red sun wiped black faces …
Blue waves turned into black waves,
Black waves showed white light.
Big fish and small fish stopped their “oars” together,
They did not move nor did they eat,
And their belly faced up together.
Citation from:
曲格平。《中國環境問題及對策》。北京：中國環境科學出版社，1989，頁 124。
Source 5
This table shows the estimated costs of environmental pollution in China in 1990.
Pollution
Estimated costs (million yuan)
Air pollution
6,500 – 11,000
Water pollution
9,700 – 14,000
Solid waste disposal
9,000 – 10,500
Total
29,700 – 43,700
Adapted from:
Smil, Vaclav. Environmental Problems in China: Estimates of Economic Costs. Honolulu, HI:
East-West Centre, 1996, p.45.
155
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 6
The United Nations pointed out in its China Human Development Report 2002
that environmental problems cost the mainland of China 3.5% to 8% of its gross
national product.
Summarized from:
Stockholm Environment Institute and UN Development Programme China. China Human
Development Report 2002: Making Green Development a Choice. Oxford, New York: Oxford
University Press, 2002.
楊帆。〈中國經濟增長的生態視角與環保產業〉，
<http://unpanl.un.org/introdoc/groups/public/documents/apcity/unpan006283.pdf> [ 下 載 日 期 ：
2003 年 6 月 3 日]。
Source 7
The problem of environmental degradation is serious in China:

Of the 27 billion cubic tons of industrial waste water discharged annually,
only less than 30% is treated and only less than 50% of “treated” industrial
waste water meets national treatment standards;

In a large number of Chinese industrial towns and cities, the level of airborne
concentrations of dust and suspended particulate is several times higher than
environmental standards;

Erosion washes away more than 500 million tons of fertile soil every year;

The volume of current available freshwater resources amounts to only 2,400
tons per year, a mere one-quarter of the world average.
Citation from:
中國環保網 – 紅色警報：中國的環境正在惡化，
<http://www.chinaenvironment.com/chinese/redalert/default.asp> [下載日期：2003 年 6 月 5 日]。
156
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Questions for discussion:

What is the major ingredient of acid rain? Why does rain become acid? Which
regions in China are affected by acid rain? How does acid rain harm humans?

What do you think is the relationship between human activities and frequent and
serious of dust-storm and sandstorm?

What environmental problems does industrialization of the mainland create?

Apart from economic losses, what other consequences does environmental
pollution bring to China?

Suppose you were a member of the State Environmental Protection
Administration. How would you solve the serious environmental problems in the
country? (Hint: Students should think in terms of legislation and education.)
157
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Suggested question for enquiry:
How should we strike a balance between economic development and environmental
conservation?
Source 1
Can we have both
a clean
environment and
economic growth?
Source:
Department of History, The Chinese University of Hong Kong.
158
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 2
The following diagram shows the relationship between environmental
deterioration and economic growth.
Environmental decay
Environmental improvement
Environmental
Deterioration
Turning point income
Per capita income
At times of slow economic growth, spending on the environment is relatively low and
environmental problems become increasingly serious. It is only when economic growth
reaches a certain level that the spending on the environment will increase and the
environmental protection sector will be able to develop.
Adapted from:
焦必方編。
《環保型經濟增長：21 世紀中國的必然選擇》
。上海：復旦大學出版社，2001，頁 152。
159
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 3
Environmental problems differ as a result of increased productivity. Currently, the
average annual discharge of pollutants into the environment in the world is
calculated by hundreds of million tons. Such discharge seriously jeopardizes
people’s lives and property, which is shown in the following:

Harms human health.

Depletes non-renewable resources.

Leads to the loss of value of immovable property, such as land.

Spoils the comfort provided by natural landscapes.

Puts the survival and development of our future generations in jeopardy.
Adapted from:
中國環保網 –〈可持續發展：公害事件教訓〉
，
<http://www.chinaenvironment.com/chinese/development/bprotect/pro.1.htm> [下載日期：2003
年 6 月 5 日]。
Source 4
A “green Olympics” will be one of the major themes of the Olympics Games to
be held in Beijing in 2008. The Beijing Municipal People’s Government has
decided to invest 45 billion yuan in environmental administration and
management in the next few years. Every dollar invested in the project will give
the environmental equipment sector an income of 50 cents. It is estimated that the
investment by the Beijing municipal government in the environment will generate
a total of 22.5 billion yuan for the environmental equipment sector.
Adapted from:
北京現代商報記者。
〈
「綠色奧運」清潔北京環保業創造商機 225 億〉
，載於中國國際環保網 – 生
活，<http://www.65.com.cn/live/live.asp?id=913> [下載日期：2003 年 6 月 5 日]。
160
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 5
China is a country with a dense population and a shortage of resources per capita.
With the increase in population and the development of the national economy, the
gap between the supply of various types of resources and the social demand for
them will further widen. If the mainland continues with the traditional high
consumption, low output and highly polluted method to maintain its fast
economic growth, the environment will further degrade and the limited resources
be depleted. The pressure put on the environment and resources will, in a reverse
way, seriously hinder socio-economic development, rendering it difficult to
maintain economic growth.
Citation from:
中國清潔生產網頁 – 〈推行清潔生產的意義〉，
<http://www.chinacp.com/newcn/chinacp/cpmeaning.htm> [下載日期：2003 年 6 月 5 日]。
Source 6
In order to protect their caribous, residents in a prarie region of the United States
randomly caught and killed big carnivores. As a result, the growth in the number
of caribous exceeded the capacity of the prarie. The prarie continued to degrade
and deteriorate until it finally became a wasteland.
Citation from:
周毅。《21 世紀中國人口與資源、環境、農業可持續發展》
。太原：山西經濟出版社，1997，頁
46。
161
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 7
The damage to the ecology and the environment in the western region seriously
affects the health of people and hinders the sustained development of society and
the economy. In the 1990s direct economic loss caused by the damage to the
ecology and the environment equalled to 13% of gross national product in the
same period. The protection of the ecology in the western region should be based
on the broad principle of coordination between economic development and
ecological protection. The following are specific suggestions:

With economic development as the centre, deal with both symptoms and the
root of the problems. To start, go to the root of the ecological problems and
make the resolution of the problem of impoverishment in the western region
the focal point. By going to the root, resolve the ecological problems caused
by the looting of resources as a result of inadequate economic development.

Regulate human activities and carry out remedial work on the ecology. The
key is to resolve such man-made ecological problems as the exploitation of
grasslands, animal husbandry which exceeds the grasslands’ capacity,
cultivation around wetlands, random digging and the unreasonable use of
water resources.

Reinstate the natural environment and carry out artificial construction.
Implement measures such as natural conservation, fencing, allowing land to
lie fallow and reinstating grasslands and woodlands in regions where the
ecology is seriously damaged. Actively develop energy sources in the rural
areas and strictly protect existing natural forests, natural grasslands and
natural wetlands.
Citation from:
國家環境保護總局。
〈西部地區生態環境現狀調查報告〉
，國家環境保護總局網址 – 政務信息：
新聞發佈，2001 年 12 月 29 日，
<http://www.zhb.gov.cn/649094490434306048/20011229/1000770.shtml> [下載日期：2003 年 6
月 5 日]。
162
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 8
In early 2001 the Jishiyu Fast Food Shop in Beijing began replacing all its foam
utensils with environmentally friendly ones. According to information supplied
by the shop, the costs rose 30% and the level of profits dropped to zero. However,
the manager of the shop said, “Environmental protection is everyone’s job!”
Summarized from:
《北京青年報》
，2001 年 3 月 26 日。
Source 9
The West Lake is a well-known scenic spot in Hangzhou. Every year considerable
number of tourists from both inside and outside the mainland visit the lake. The
mere two-kilometre-long Hubin Road along the lake is the most important
transport hub linking the southern and northern part of the city. There is a forest
of shops along the road and because of the long-time gathering of people, traffic
congestion deteriorated.
At the end of 2002 the Hangzhou Municipal People’s Government decided to
build a north-south tunnel across the West Lake in order to solve the traffic
problem. The government would also excavate farmlands and other land to
expand the water area of the lake by one-quarter and add six scenic spots to the
area. The government expects that after the completion of the construction
projects, the West Lake can accommodate an additional 300,000 tourists per year
and the income from tourism would increase to 60 million yuan. However,
mainland experts are worried that the tunnel project would not only fail to match
the West Lake in style, it would also cause fatal harm to the lake.
Summarized from:
《蘋果日報》，2003 年 2 月 22 日。
《中國商報》，2003 年 3 月 11 日。
163
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 10
Striking a balance
Any suggestion of “development”, be it reclamation or the future direction of
Hong Kong, is now given over to the Environmental Protection Department
(EPD) for a thorough examination of its impact on the environment. Public
interest is growing. In 2000 several large-scale projects, such as Disneyland and
the Lok Ma Chau spurline, received unprecedented media attention as the general
public debated how to achieve a balance between commercial interests and
environmental protection.
Unless they are specially exempted, all designated projects must go through the
statutory environmental impact assessment process. Environmental permits are
required for their construction and operation, and approval will only be given if
the projects prevent the production of adverse environmental impact or reduce
such impact. The EPD has the power to reject applications or attach conditions to
the permits under certain circumstances.
Citation from:
Environmental Protection Department website – EIA and Planning,
<http://www.epd.gov.hk/epd/english/environmentinhk/eia_planning/prob_solutions/striking_balance.html>
[accessed 5 June 2003].
164
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Questions for discussion:

What is the implication of the picture shown in Source 1? What do you think is
the role played by the human sitting in the middle of the seesaw?

Do you think it is correct for humans to take whatever resources they want for
economic development and neglect to protect the ecological environment properly?
Why or why not?

Do you think it is correct for humans to interfere with the ecological environment
and protect it irrationally? Why or why not?

Explain the relationship between the deterioration of the environment and
economic development based on the information given in Source 2.

Friedrick Engels (1820-1895) pointed out, “We should not indulge ourselves in
our victory against the natural environment. Nature would take revenge on us for
every triumph we made in this way.” What did people more than 100 years ago
think about the relationship between the ecological environment and humans as
reflected by this warning? Do you agree with Engels’ views? Discuss your opinion
with your classmates.

How do humans strike a balance between environmental protection and economic
development? Discuss your views with your classmates.

Based on the Hong Kong example, do you think environmental conservation and
economic development can co-exist?

China is undergoing continuous economic development in recent years and has
done considerable work on environmental protection. Do you know what the
Central People’s Government has done to protect the environment? Collect more
information in this area.
165
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Suggested question for enquiry:
Is the strategy of “sustainable development” a necessary and viable choice for
China?
Source 1
The concept of “sustainable development” is first mentioned in the report, Our
Common Future, presented by the United Nations World Commission on
Environment and Development in 1987. “Sustainable development” is defined in
the report as “development which satisfies contemporary needs while at the same
time keeps the satisfaction of the needs of future generations unharmed.”
Citation from:
中國環保網 – 環境可持續發展，
<http://www.chinaenvironment.com/chinese/development/default.asp> [下載日期：2003 年 6
月 11 日]。
Source 2
Humans in the natural environment – The mission undertaken by humans in the
Earth’s ecological system is determined by their status and function in the social
system. Sustainable development exactly starts from the interests of the whole
human race, including the interests of contemporary humans and future
generations, and regulates human behaviour in order to achieve harmonious
evolution of humans and nature … Currently, the challenges posed by global
environmental problems to human survival are not limited by boundaries, social
systems and ideologies. They endanger the survival of the entire human race.
Citation from:
周毅。《21 世紀中國人口與資源、環境、農業可持續發展》
。太原：山西經濟出版社，1997，頁
87 至 88。
166
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 3
Ancient people already had a definite view on the relationship between the
development of human society and the natural environment. Yu, the first ruler of
the Xia Dynasty, showed his awareness of ecological conservation by prohibiting
“tree cutting in forests in spring and fishing in rivers and lakes in summer in order
to allow the growth of grass, trees and fish, respectively.” Mengzi (or Mencius)
believed that “frequent tree-cutting reduces the bearing capacity of forests.”
Guanzhong, Prime Minister of the Kingdom of Qi during the Spring and Autumn
period, proposed the theory that people must use natural resources rationally. He
said, “Although mountains and forests are near us and grasslands and woodlands
are beautiful, we must restrict the building of houses.”
Summarized from:
湯恩佳。〈儒教的生態環境理念〉，
<http://www.confucius2000.com/scholar/rjsthjgn.htm> [下載日期：2003 年 6 月 5 日]。
周毅。《21 世紀中國人口與資源、環境、農業可持續發展》。太原：山西經濟出版社，1997，頁
122。
167
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 4
The crises in China’s modernization process

Population crisis:
The current population of China is 1.3 billion. By 2020-2030, the country will
have a population of at least 1.5 billion. With continuous increase in
population, surplus labour force will continue to emerge. Poverty is still a
burden of the mainland.

Resource crisis:
Despite the abundance of China’s natural resources, the possession rate of
resources per capita is less than half of the world level and tends to decline
steadily, thereby affecting development potential and the choice of
development methods. Furthermore, there is a serious shortage of resources
for economic development.

Environmental crisis:
The change in population and the unreasonable use of natural resources lead
to environmental degradation and ecological imbalance. This is shown in the
seriousness of soil erosion and the rapid formation of deserts. Pollution is
serious on the mainland.
Summarized from:
State Environmental Protection Administration of China. Report on the State of the Environment in
China 2001, <http://www.zhb.gov.cn/english/SOE/soechina2001/english/2-preface.htm> [accessed
5 June 2003].
周毅。《21 世紀中國人口與資源、環境、農業可持續發展》。太原：山西經濟出版社，1997，頁
176 至 181。
168
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 5
Traditional assessment of economic growth solely in quantitative terms and the
traditional developmental mode of “polluting first and remedying later” are no
longer appropriate in view of the present and future requirements for
development. It is now necessary to find a path of development wherein
population, socio-economic factors, natural resources and the environment are
coordinated. The aim is to find a path of sustainable development which will meet
contemporary requirements without compromising the ability of future
generations to satisfy their needs.
Citation from:
State Environmental Protection Administration of China website – Sustainable Development in China,
<http://www.zhb.gov.cn/english/SD/index.php3> [12 June 2003].
Source 6
Tree planting is the only living infrastructure in cities, creating irreplaceable
effects on the improvement of the ecological environment, the investment in the
environment and the upgrading of cities. The city of Ningbo raises the importance
of the task of tree planting to that of the construction of roads and bridges. By the
end of 2002 an additional 557 hectares of land in the centre of the city have been
clothed with trees and green areas per capita have increased 174% over 1997. The
Ningbo Municipal People’s Government has also invested in the treatment of
waste. In early 2002 a rubbish-burning power plant started operation, handling
1,000 tons of rubbish per day. A sewage treatment system has been constructed in
the city and related ancillary projects have also started.
Citation from:
翁醉、黃克。〈寧波：營造生態大都市〉，2003 年 5 月 29 日，載於中國城市化網 – 亮點集萃，
<http://www.curb.com.cn/> [下載日期 5 月 30 日]。
169
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Questions for discussion:

What is “sustainable development”?

What are the similarities between Chinese ancient views towards the natural
environment and the modern concept of “sustainable development”?

Why do you think China cannot adopt the mode of “polluting first and remedying
later”? (Hint: Students should think in terms of the current crises on the mainland
and the price and consequence of “polluting first and remedying later”.)

Do you think the strategy of “sustainable development” is an inevitable choice in
the mainland’s development? Why or why not?

What are your views on the current green policy of the city of Ningbo? Apart from
Ningbo, what other cities, provinces or regions do you think are using the strategy
of “sustainable development” to plan for current and future development? (Hint:
Students can refer to the development of the Pudong New Area in Shanghai.)

Do you think “sustainable development” represents a global development trend?
Why or why not?
170
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Suggested question for enquiry:
What strategies and polices can be adopted to ensure sustainable development?
Source 1
The following diagram shows the system indicators of sustainable development
of a country (or region).
Sustainable development of
a country or region
The social
development
indicator and
regional
distribution
of people’s
welfare level
or living
quality
The level of
economic
development
and other
regional and
sector
distribution
The storage
capacity of
resources, the
degree of
depletion of
the
environment
and other
regional
distribution
Policy and
planning, and
the influence
of
international
relationships
and trade
Social system
Economic
system
Environmental
system
Institutional
arrangement
Citation from:
沈國明編。
《21 世紀的選擇：中國生態經濟發展的可持續發展》
。成都：四川人民出版社，2001，
頁 583。
171
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 2
This table shows the investments in environmental protection in China in
1996-2000.
Projects
Investments
(100 million yuan)
Proportion
(%)
Prevention and control
of air pollution
2,080
46
Prevention and control
1,820
40
Prevention and control
of solid waste pollution
500
11
Others
100
3
4,500
100
of water pollution
Total
Reference:
國家環境保護總局網頁 – 環境規劃。
〈國家環境保護「九五」計劃和 2010 遠景目標（摘要）〉
，
<http://www.zhb.gov.cn/649364974589706240/20021113/1035074.shtml> [下載日期：2003 年 6
月 6 日]。
172
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 3
How does China strengthen the protection of forests and grasslands?
Don’ts
Dos

Closing and
natural grasslands
forest areas to
into forests;

Opening up of too

Tourism
development;

Training of local
the threats of fire,
many roads in forest
people for tourism
lumbering, browsing
areas;
and handicraft
Adoption of
work;
by domestic animals

and firewood
monocultural
gathering;
plantation during the
Maintenance of
process of
natural species mix,
reinstating forests;
forests with different

Conversion of
conservation of
protect them against


Investments


Forest protection
work.
Grazing on
age layers and thick
high-altitude
layers of land;
grasslands.
Preservation of the
natural agents of
pollination and seed
Economic potentials
dispersal and control

of pests;

Development of fire
of the forest protection sector;

prevention plans;

Provision of opportunities for the development
Development of tourism and other sideline
occupations;
Zoning of forests

Grazing of non-browsing animals;
into “ecological”

Sustainable collection and cultivation of
forests and forests
Chinese herbal plants.
with “sustainable
production”.
Citation from:
MacKinnon, John and Xie Yan (eds.). Restoring China’s Degraded Environment: The Role of Natural
Vegetation,
http://www.chinabiodiversity.com/shengwudyx2/vegetation-en/contents.htm
2003].
173
[accessed
6
June
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 4
China has expanded its effort in protecting the ecological environment by giving
up the plan of converting more than 25 million hectares of natural wetlands into
land to be exploited for agricultural resources. The State Wetlands Commission
stressed that mainland China would no longer use natural wetlands as unexploited
reserved resources for such large-scale agricultural activities as cultivation,
aquaculture and animal husbandry.
Summarized from:
《解放日報》，2001 年 9 月 27 日。
Source 5
Data show that since 1996 the Central People’s Government has invested as much
as 368 million yuan in ecological construction in Tibet Autonomous Region
alone. Tibet Autonomous Region has also effectively improved its ecological
environment by carrying out ecological projects to protect the natural forest
resources, allow land to lie fallow and reinstate forests and grasslands. Currently,
the water and air of Tibet Autonomous Region remains uncontaminated. Major
rivers, streams and lakes are still in their original conditions, making Tibet one of
the regions with the best natural environment in the world.
Summarized from:
《明報》
，2003 年 3 月 11 日。
《人民日報》，2003 年 3 月 21 日。
174
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 6
China is carrying out the strategy of sustainable development and promoting
changes in the way of economic development. It tightens the connection between
environmental protection and the public and creates a new trend of a social
demand for green consumption and green products. Green consumption means
not only the satisfaction of contemporary needs but also the satisfaction of the
needs of future generations.
The strive for the utility value of products should not lead to neglect of the
environment, nor should the strive for economic gain by enterprises be
accompanied by the neglect of its effect. The strive for immediate benefits should
not result in damage to the long-term utilization of resources and in ecological
imbalance. Currently, there are more than 100 enterprises which produce more
than 300 types of products with green labels, giving the public the opportunity to
participate in environmental protection.
Citation from:
中國國情研究會編。《中國國情報告 1999》
。北京：中華工商聯合出版社，1999，頁 167。
Source 7
In 2001 – 2005 the government must strengthen its policy guidance, investment
and regulating power and bring market adjustment into play … The government
must formulate preferential policy favourable to environmental protection by
means of fund-raising, taxation and import and export systems in order to attract
local and foreign capital for investment in environmental projects … Policies and
systems must be creative and an incentive system adopted. Self-consciousness on
environmental protection must be nurtured by laws, administration and
governance, market forces, the voluntary public and other means.
Citation from:
國家環境保護總局編。《中國環境狀況公報 2001-環境管理：國家環保十五計劃》，
<http://www.zhb.gov.cn/english/SOE/soechina2001/english/2-preface.htm> [下載日期：2003 年 6
月 5 日].
175
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Questions for discussion:

In 1996-2000 environmental investment in China was directed to which areas? Do
you think the investment can effectively solve or reduce the current environmental
problems? Discuss your views with your classmates.

The mainland has made sustainable development a major element in its
development blueprint. Explain how the Central People’s Government and local
people’s governments ensure sustainable development.

Currently, China has considerable environmental problems. Using the information
in Source 3 about the proposals for protecting the forests and grasslands, come up
with some other proposals and suggest to the Central People’s Government
strategies and policies to ensure sustainable development. (Hint: Students can
select one current environmental problem on the mainland and draft a
development plan and strategies that would reduce or eliminate the problem.)

How can environmental protection awareness be promoted in a market economy?
Discuss your views with your classmates.

Suppose you were a member of the State Environmental Protection
Administration of China. How would you increase public participation in
environmental protection?

What role do you think can the government play in ensuring sustainable
development? Discuss your views with your classmates.
176
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Suggested question for enquiry:
Can economic development coexist with the preservation of cultural heritage?
Source 1
World heritage means the rare and irreplaceable legacies of the human race as
designated by the United Nations Educational, Scientific and Cultural
Organization (UNESCO) and the World Heritage Commission. The following are
the criteria for assessing world heritage:

Cultural heritage includes monuments, groups of buildings and sites which
are of outstanding universal value from the historical, aesthetic,
anthropological and scientific point of view;

Natural heritage: Natural features consisting of physical and biological
formations or groups of such formations, geological and physiographical
formations and precisely delineated areas, and natural sites or precisely
delineated natural areas, which are of outstanding universal value from the
point of view of science, conservation or natural beauty.
Adapted from:
World Heritage Centre Website – Criteria for the inclusion of properties in World Heritage List,
<http://whc.unesco.org/criteria.htm> [accessed 12 June 2003].
177
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 2
Xie Gaoning thinks that the function of world heritage is mainly the function of
spiritual culture and not economic function. The motive of reporting cultural
legacies to higher authorities by some local units on the mainland is not pure.
What they said about “promoting protection by exploitation” or “the
simultaneous tasks of protecting and utilizing” is, in fact, “economic gains must
come first” and the making of money from world heritage sites. It is also wrong
to consider world heritage resources as equivalent to tourism resources. In fact,
world heritage is a charity enterprise that needs to be protected and tourism is
merely one of the many functions. It is necessary to strictly control the
development of tourism … Wrongful exploitation would lead to artificiality,
commercialization and urbanization of world heritage sites. She suggests the
establishment of a state heritage protection administration to legislate for and to
govern the protection of world heritage sites.
Citation from:
丁玎。
〈遺產重申報更要重保護〉
（原載於《人民日報》）
，2003 年 5 月 29 日，載於中國城市化
網，<http://www.curb.com.cn/> [下載日期：2003 年 6 月 1 日]。
178
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 3
Projects have commenced to put in order the 581 alleys in the Dongcheng district
in Beijing. The demolished privately built parts in these alleys would be repaired,
protected and integrated with the landscape of the ancient capital and their history
and cultural appearance restored.
Professor Wu Liangyong of Qinghua University proposed the method of organic
renovation to transform and protect the alleys. He advocated “the exploration of
the city’s renovation and development on the basis of sustainable development
and in accordance with the rules of city’s internal development and the veins of
the city.” In Professor Wu’s proposal, residents are the main source of investment
for the renovation of houses and the developers are the accessory source. The role
of the architect is to provide guidance for the planning and design of the houses.
This will turn people from passive to active participation which is favourable to
preserving the appearance of the old district.
Citation from:
牛建宏。〈留住建築文脈：北京胡同改造保護情況透析（原載於中國建設報）
〉，2003 年 5 月 28
日，載於中國城市化網，<http://www.curb.com.cn/> [下載日期：2003 年 6 月 1 日]。
Source 4
Experts on the mainland expect that the Three Gorges Project of the Yangtze
River will submerge 632 square kilometres of land area, including thousands of
ancient and historic towns, such as Badong and Wushan, and related cultural
relics like ancient temples and stone tools. Some experts have already started
cultural rescue work but owing to the pressure of time and limited funds, they
believe many invaluable cultural relics will disappear with the completion of the
Three Gorges project. Some experts still cast doubts on the necessity of building
big dams on the Yangtze River and warn against the destructive impact of the
project on the ecological environment and cultural relics.
Adapted from:
大紀元文化網 – 文化新聞。
〈長江三峽即將截流，珍貴文物遭受破壞〉
，
<http://www.epochtimes.com/gb/csc15_21.htm> [下載日期：2003 年 6 月 12 日]。
179
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Source 5
Tongli is an ancient town in a region of rivers and lakes south of the Yangtze
River. It is well-known both within and outside the mainland for its small bridges,
streams and cultural relics and sites. Tongli is 17 kilometres from Suzhou, 80
kilometres from Shanghai and 200 kilometres from Nanjiang. Transportation by
land and water is easy. It is a typical historical town with a general layout of
rivers and lakes. As early as the beginning of the 1980s, Tongli has been listed as
a national scenic area and a cultural protected town in Jiangsu Province. In 2000
it was also listed as a world heritage site.
Adapted from:
揚子晚報網頁 – 中國歷史文化名鎮 – 同里，
<http://www.yangtse.com/gb/node/2003-04/30/node_420.htm> [下載日期：2003 年 6 月 12 日]。
Source 6
This picture shows the outer beach along the Huangpu River in Shanghai. The
buildings along the river date back to the late 19th century and the beginning of
the 20th century. These old buildings are now the buildings for banks and the
financial and insurance sectors.
Source:
Department of History, The Chinese University of Hong Kong.
180
Core Module III
Issue 2 – What is the impact of reform and opening-up policies on China’s future development?
Key Point b – Sustainable development
Questions for discussion:

Why do we have to protect world heritage sites?

What is the current relationship between protection of world heritage sites in
China and their economic development? Is it good to have such a relationship?
Why or why not?

Do you agree that the balance between economic development and the
preservation of cultural heritage can be achieved by “promoting protection by
exploitation” and “the simultaneous tasks of protecting and utilizing”? Discuss
your views with your classmates.

Do you think that economic development and the preservation of cultural heritage
can co-exist? Use examples to illustrate your answer.

Hong Kong has a lot of invaluable historical relics. How should we protect them
when we visit places of historical value?

What policies should be implemented by the Hong Kong Special Administrative
Region Government to achieve a balance between economic development and the
preservation of cultural heritage?
181