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Economic reform in China and Russia: A Comparison

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  1. Introduction
  2. Marxist-inspired centralized economies
  3. China's socialist market economy
  4. Conclusion

When economic reforms first began in China and Russia, regime stability, when classified as a product of political legitimacy, has, overall, seen only marginal change. Though they are now classified as illiberal democracies, and have opened up economically?China more so than Russia ? socially, they have not changed drastically from their original totalitarian regimes. Stability in terms of government power remains strong, but is at the receiving end of pressure from increased economic liberalism in both countries. Russia under Putin has reined in most of its more adventurous and monopolistic businessmen, while China has taken similar persons under the government's wing, turning them into ?red capitalists.?

Both China and Russia began transitioning from Marxist-inspired centralized economies. Whereas Russia began liberalizing quickly, China reformed gradually. Liberalization brought more prosperity because people were able to purchase more goods at cheaper prices. This was achieved as a result of private firms finally being able to specialize.

As firms finally had ownership and were paying for their own businesses, the firms had more incentive to make sure they ran their businesses profitably, leading them to create better-quality products. As a result of this, the wealth became concentrated in the hands of a select few: those owners and directors of the private firms (many of whom actually inherited their businesses from when they were the directors earlier, when the firms ran as state-owned enterprises). Those in charge of the large firms that profited because they entered and monopolized the new market during the early 90s?they partially replaced the government as employers.

[...] While this is norm in Russia, it is looked upon with disdain in places like the United States (Hillary Clinton, for example, claimed that Putin no while John McCain ?looked into [Putin's] eyes and saw three letters: a a G and a China might be seeing its economic reforms and its transformation from a socialist command economy to a socialist market economy[11] undermine its regime's stability. For example, private enterprises are threatening the existence of state-owned enterprises (SOEs) Foreign competition, present as a result of the elimination of economic isolation, also threatens SOEs, leaving the Chinese government no choice but to subsidize them for their survival.[12] Though both countries loosened their governments' grips on their economies by allowing for private property, loosening price controls, and providing incentives for industrialization, among other things, and put in some social reforms?for example, greater voting rights (though with illiberal democracies, which employ staged elections, that doesn't mean much)?both countries still exercise austere command over their citizens. [...]

[...] Fields, and Donald Share. "China?Foreign Relations and The World." Cases in comparative politics . 3rd ed. New York: W.W. Norton & Co Print. Ibid Dickson, Bruce J . Wealth into power: the Communist Party's embrace of China's private sector. Cambridge: Cambridge University Press Print. Cases [...]

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