Bell Ringer Read the article on the growth of Transparency in China and answer the questions Please turn in: 1. Russia HW (pink sheet)

Transparency A transparent gov. is one that operates openly by keeping citizens informed about how the government operates (including the economy) & political issues. A transparent gov. responds to the questions & opinions/advice of its citizens. How might a government limit transparency? Brainstorm 3 ideas with your partner.

Objectives Agenda Discuss China in a comparative context: geography, history, economic culture Explain how the economies of Russia and China have changed with democratization Slide/Notes  Geography  History  Political economy “Commanding Heights” video Closure: Quiz Today we will …

CHINA

Geography 3 rd largest land surface Access to oceans/no ice Long, navigable rivers & good harbors Climate & terrain differ btwn north/south West is isolated China is separated from other countries by mountains, deserts & oceans

Thinking About China The world’s largest population Ethnic homogeneity (Han Chinese) The Middle Kingdom Poverty & growing prosperity

The Evolution of the Chinese State The broad sweep of Chinese history – dynastic rule 1921 – founding of Communist Party of China (CCP) 1949 – People Republic of China (PRC) under Mao Zedong Cultural Revolution (failed?)  Cleansing of Western values/ anti-capitalism, revising education, purging political enemies, reinforcing political legitimacy, affirming revolutionary ideals, promoting ideological conformity, attacking intelligentsia/ middle class, elevating status of leader 1976 – Mao dies, gov. opens borders in – 1 st KFC! 1989 – Tiananmen Square 1997 – Hong Kong returned to Chinese rule after 156 years under British Crown

Maoism Influenced by Lenin & Marx but distinctly Chinese version of communism Strength of the peasant Collectivism – value the good of the community above the individual Struggle, activism & devotion “Mass Line” of communication between leaders & the people

Check for understanding Mao’s Mass Line concept sounds very much like Lenin’s theory in which ideas rise from the people to the elite decision makers? The ____________ have a superior understanding of what the ______________ want. (people, elite) What is the “vanguard party”?

Chinese Economic Culture Still technically a Communist state, but slow transition to free market Gov. retains control of some industries while opening up others, especially in east and south to private ownership & international investment  Began under Deng Xiaoping Creation of Special Economic Zones (SEZs) in places like Shenzhen, an edge city outside of Hong Kong, whose population has skyrocketed As China has become more capitalist, wages, food & healthcare aren't guaranteed.  Vs. Mao’s “iron rice bowl” – cradle to grave health care, work and retirement

Status of Private Property Constitution of the PRC prohibited private property  Confiscated private property  Property was collectivized, “owned by the people”  Property redistributed to the poor  Communes  State is the primary owner of property and means of production, people had right of use but no ownership De-collectivization of land Disbanding of communes Private production allowed Privately owned businesses Constitutional reforms for rights of ownership Enforcing the rule of law for private ownership Under Mao Now

Should there be privatization? Efficiency Attract domestic and foreign investment Addresses market/ consumer needs Incentives for work/ innovation State industries not performing well Loss of state control Creation of oligarchs Higher unemployment Ideological inconsistency- loss of legitimacy of the CCP Creates economic inequality (regional or societal) Loss of safety net For Against

Deng’s Plan How Disciplined savings Open to foreign investment Experimented with free trade in SEZs Emphasis on exports Open to technology Local planning SLOW, much more stable economy than Russia Free Markets, NOT free people  Little political reform- oppression Reform: Agriculture – de-collectivize/ ”house hold responsibility system” State enterprises – down size Collective enterprises – focus on export goods Private enterprise – individual ownership & foreign investment China’s Economic Reforms

China AT LEAST 61.6

Check for understanding State Enterprises Collective Enterprises SEZ’s Private Enterprises a. Shanghai (SE China) b. Increasing individual and foreign ownership c. operate according to central government plan d. local government control e. Low growth & downsizing f. Low-end export manufacturing g. Big industries

Commanding Heights

Closure China Quiz Homework: 1. Read article on China’s economic policies and answer the questions 2. UK /EU Retake – handwritten, short answers due 4/29 (late submission will NOT be accepted)

Political Systems vs. Economic Systems Integration of political & economic systems  Capitalism & communism are economic systems, but hard to separate from the political systems which support each  Attitudes & behaviors of citizens and how they respond to economic policies, economic inefficiencies, economic inequality and economic decision-making influence the actions of the government & policy-making

Democratization/ Liberalization “It has been said that democracy is the worst form of government except for all the others that have been tried.” – Churchill aka – Liberalism – the expansion of both individual rights and the market economy - DO NOT think “liberal” as in US Democrats - Market economy = free trade, less regulation, profit goes to people and not government

Economic Systems Command Economy: Government owns almost all industrial enterprises and retail sales outlets. Production goals set by a central government (party-dominated), values equality, quotas and plans/ directs production and distribution. Economic Liberalism: Free markets, freedom of the press, freedom of religion, low or now tariffs on trade. Free-Market Capitalism: Relies on profit motive and competition. Mixed Economies: Market Economy with significant control from the government.  Social Welfare Capitalist System (UK)  Socialism Market Economy (China)  Gradual infusion of market economy while still retaining state control  IN Europe: team oriented and emphasis on cooperation between management and organized labor. Government is economic safety net. Government subsidies, universal health care, day care, pensions.  State Capitalism (Russia) Relator 2013

MORE CENTRALIZATION LESS CENTRALIZATION Command Economy Mixed Economy Market Economy Private Property? Role of Government? Competition & Profit? Private Property? Role of Government? Competition & Profit?