Thursday, July 28, 2005
Tweet[IWS] OVERVIEW of the CHINESE ECONOMY [26 July 2005]
IWS Documented News Service
_______________________________
Institute for Workplace Studies Professor Samuel B. Bacharach
School of Industrial & Labor Relations Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor Stuart Basefsky
New York, NY 10016 Director, IWS News Bureau
________________________________________________________________________
U.S. House. Joint Economic Committee (JEC)
Overview of the CHINESE ECONOMY
http://www.house.gov/jec/publications/109/07-26-05china.pdf
[full-text, 15 pages]
See Press Release 26 July 2005
Chinese Economy is Examined in New JEC Study
http://www.house.gov/jec/press/2005/07-26-05.htm
WASHINGTON, D.C. - The economy of the People's Republic of China is strongly influenced by the Chinese government through its extensive ownership, control, and financing of major businesses, according to a new Joint Economic Committee (JEC) study released today by Chairman Jim Saxton. The new study, < http://www.house.gov/jec/publications/109/07-26-05china.pdf> Overview of the Chinese Economy, examines the evolution of Chinese economic policy in recent decades and its impact on the structure of the Chinese economy.
Under current policy, the Chinese economy is relatively open to foreign direct investment as part of a strategy of export-led growth that facilitates capital formation, economic development, and employment. On the other hand, the Chinese government still dominates the domestic economy through extensive state ownership and control of major Chinese enterprises. These enterprises are coddled by government-owned banks that provide loans at below-market interest rates or with special terms.
"As Congress grapples with issues such as the proposed acquisition of Unocal by CNOOC, it is important to understand the economic environment in which such Chinese firms operate," Saxton said. "This new JEC study provides a balanced analysis of the strengths and weaknesses of the Chinese economy, including the role of its state-owned enterprises.
"Although the Chinese economy has grown rapidly in recent years, it is faced with a number of problems and challenges," Saxton said. "In particular, large sections of the Chinese economy are dominated by a number of major state-owned and state-influenced firms that are not economically viable. These enterprises use their access to officials at all levels of government to obtain special favors, and cronyism and corruption are widespread.
"These enterprises also receive loan subsidies from state-owned banks whose own solvency is often undermined as a result. Consequently, large segments of the Chinese banking system are essentially bankrupt. There is a private sector in the Chinese economy, but it is largely confined to foreign and smaller Chinese companies. As Congress evaluates U.S.-Chinese economic relations, we must take into account the fact that the Chinese economy is not yet truly a market economy," Saxton concluded.
_____________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky *
Director, IWS News Bureau *
Institute for Workplace Studies *
Cornell/ILR School *
16 E. 34th Street, 4th Floor *
New York, NY 10016 *
*
Telephone: (607) 255-2703 *
Fax: (607) 255-9641 *
E-mail: smb6@cornell.edu *
****************************************
_______________________________
Institute for Workplace Studies
School of Industrial & Labor Relations
Cornell University
16 East 34th Street, 4th floor
New York, NY 10016
________________________________________________________________________
U.S. House. Joint Economic Committee (JEC)
Overview of the CHINESE ECONOMY
http://www.house.gov/jec/publications/109/07-26-05china.pdf
[full-text, 15 pages]
See Press Release 26 July 2005
Chinese Economy is Examined in New JEC Study
http://www.house.gov/jec/press/2005/07-26-05.htm
WASHINGTON, D.C. - The economy of the People's Republic of China is strongly influenced by the Chinese government through its extensive ownership, control, and financing of major businesses, according to a new Joint Economic Committee (JEC) study released today by Chairman Jim Saxton. The new study, < http://www.house.gov/jec/publications/109/07-26-05china.pdf> Overview of the Chinese Economy, examines the evolution of Chinese economic policy in recent decades and its impact on the structure of the Chinese economy.
Under current policy, the Chinese economy is relatively open to foreign direct investment as part of a strategy of export-led growth that facilitates capital formation, economic development, and employment. On the other hand, the Chinese government still dominates the domestic economy through extensive state ownership and control of major Chinese enterprises. These enterprises are coddled by government-owned banks that provide loans at below-market interest rates or with special terms.
"As Congress grapples with issues such as the proposed acquisition of Unocal by CNOOC, it is important to understand the economic environment in which such Chinese firms operate," Saxton said. "This new JEC study provides a balanced analysis of the strengths and weaknesses of the Chinese economy, including the role of its state-owned enterprises.
"Although the Chinese economy has grown rapidly in recent years, it is faced with a number of problems and challenges," Saxton said. "In particular, large sections of the Chinese economy are dominated by a number of major state-owned and state-influenced firms that are not economically viable. These enterprises use their access to officials at all levels of government to obtain special favors, and cronyism and corruption are widespread.
"These enterprises also receive loan subsidies from state-owned banks whose own solvency is often undermined as a result. Consequently, large segments of the Chinese banking system are essentially bankrupt. There is a private sector in the Chinese economy, but it is largely confined to foreign and smaller Chinese companies. As Congress evaluates U.S.-Chinese economic relations, we must take into account the fact that the Chinese economy is not yet truly a market economy," Saxton concluded.
_____________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
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# posted by SBasefsky : 10:28 AM
