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   Course Title    Comparative Analysis of Chinese and Russian Models of Economic Transition
Lecturer    Pavel Doshlov
Institution    Far Eastern State University
Country    Russia

  1. Aim of the course

    The purpose of this course is to consider in detail two different cases of transition of former socialist countries into market economies. Both the Russian and the Chinese experience will be analyzed in the light of their strengths, weaknesses and the impact these countries' transformations have on the existing international economic arrangements. It is also useful to know how the successful (or unsuccessful) experiences of these countries can serve to illustrate more general ideas and debates such as, for example, the choice between "gradual" reforms and "shock therapy". These ideas and debates will be analyzed during class discussions which should be helpful to develop studentsí ability to analyze economic policies in different countries and summarize their arguments convincingly and cogently as well as develop their presentation skills.

  2. Role of the course in the degree curriculum

    The course is taught during the final year of degree study therefore one of its purposes is to summarize studentsí knowledge gained from other more general courses involving Economic Theory, World Economy, Chinese Economy, Russian Economy in Transition, Russian-Chinese Economic Relations etc.

  3. Methods used

    Each class (two academic hours) is divided between a lecture (70%) and discussions (30%). This arrangement is not fixed and the share of discussions is larger when we analyze the topics more closely related with the current economic problems in Russia and China. At the beginning of each class students will be given handouts with outlines of each lecture as well as figures, tables and other material that will be used during class. This should give students a clear idea about what they are expected to learn and what points to use during the discussions.

  4. Outline of the course

    This course is divided into eight main parts and each part consists of one or two classes depending on the amount of material that needs to be studied. The last part is dedicated to summarizing the content of the course and will contain studentsí presentations of their papers and discussions. This part will take one class. Students are free to choose their own topics of the papers to be presented depending on their study and research interests.

    Part I. Theoretical studies of transition.

    From Central Planning to Market Coordination. Monetary and fiscal Policies. Causes and consequences of inflation and anti-inflationary policies. Macroeconomic stabilization and growth. "Gradualism" vs. "Shock Therapy".

    Part II. Introduction and prerequisites of transition in Russia and China. Introduction to economic conditions in Russia and China before the start of reforms. Levels of development. Ownership, financial, industrial and agricultural systems in these countries in pre-reform period. The choices of transition models specified by these economic conditions.

    Part III. Macroeconomic policies in China and Russia.

    Price liberalization in Russia and two-tiered price system in China. Anti- inflationary and fiscal policies and economic reforms in these countries.

    Part VI . Reforming state ownership in China and Russia.

    Industrial structures in China and Russia. Hard and soft budget constraints. Privatization and restructuring: corporate governance; insider vs. outsider privatization; forms of ownership of the firms in the transition. Privatization experiences in China and Russia. Different needs for different sectors of economy.

    Part V. International trade policies and trade patterns in China and Russia.

    From protectionism to trade based on comparative advantage. Changes in structure and direction of trade. Role of direct foreign investments in transition process of these countries. Foreign investment policies. Role of International Financial Organizations in transition.

    Part VI. Financial Intermediation.

    Financial discipline and state enterprise reforms. Financial structure of firms in transition. Banks during reforms. Liberalization of financial system in Russia vs. state control of banks in China.

    Part VII. Poverty, Income Inequality and Social Welfare Reforms.

    Changes in standards of living as outcomes of reforms. Income security and efficient allocation of recourses. State policies regarding income distribution. Public support for the reforms.

    Part VIII. Paper Presentations and Discussions.


    1. Mandatory Readings:

      McKinnon, R. 1994. Gradual vs. Rapid Liberalisation in Socialist Economies: the Problem of Macroeconomic Control in Proceedings of the Annual World Bank Conference on Development Economics, 1993, World Bank

      Ofer, G. Stabilizing and Restructuring the Former Soviet Economy: Big Bang or Gradual Sequencing in Trials of Transition: Economic Reform in the Former Communist Bloc, Westview, 1992.

      Chen, F. Economic Transition and Political Legitimacy in Post-Mao China. State University of New York Press. 1995

      Bouin, O. Coricelli, F., Lemoine, F. eds. Different Paths to a Market Economy: China and European Economies in Transition. CEPR, 1996.

      Sachs, J. Woo, W. 1993, Structural Factors in the Economic Reforms of China, Eastern Europe and the Former Soviet Union, mss., Economic Policy Forum.

      Goldman, M. 1993. The Chinese Model: The Solution to Russia's Economic Ills?, Current History, Vol. 92, pp. 320-323.

    2. Recommended Readings.

      Tisdell, C. 1993. Economic Development in the Context of China. New York, St. Martinís Press.

      Lardy, N. 1992. Foreign Trade and Economic Reform in China: 1978 - 1990. Cambridge University Press.

      Maddison, A. 1998. Chinese Economic Performance in the Long Run. Paris, Development centre of OECD.

      Minami, R. 1994. The Economic Development of China. London, Macmillan.

      Krugman, P., Obstfeld, M. 1997. International Economics: Theory and Policy; Addison-Wesley.

      Chen,-Chung; Chang,-Lawrence; Zhang,-Yimin: The Role of Foreign Direct Investment in China's Post-1978 Economic Development; World-Development; 23(4), April 1995, pages 691-703.

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