The Chinese Capital Market
Dr. Annette Kleinbrod promovierte bei Prof. Dr. Erich Priewasser am Lehrstuhl für Allgemeine Betriebswirtschaftslehre und Bankbetriebslehre an der Universität Marburg. Sie ist als Projektmanagerin China für GTZ International Services tätig.
The Chinese Capital Market
2 The Significance of Effective Development in China (S. 5-6)
In conjunction with development, assuring stability (wendingf and welfare (fuli) have been viewed as imperatives by rulers throughout Chinas history and remain so in the rationale of the Chinese Communist Party, which has had to contend not only with social disorder, but also with loss of credibility during periods of its reign. With these imperatives in mind, the Chinese government initiated an unprecedented path of reform in 1978 which has had a substantial impact on literally every aspect of society as well as the countrys foreign relations. Viewed pragmatically, this has brought about the worlds fastest growing economy and has at the same time - when evaluated in the overall perspective - yielded substantial material benefits for its population. However, the road towards development remains fragile.
It presents significant economic and political challenges and also has troubling implications for both society and the natural environment. These are by no means insurmountable obstacles, but they need to be overcome. Successful economic growth is considered to be the pivotal means necessary to guarantee social stability and welfare, but more recently the government has also increasingly acknowledged the need to incorporate aspects related to quality and sustainability into its growth targets. An effective understanding of Chinas financing needs during the course of its further development, as well as the role of the capital market and its correlation with the developmental process, requires insight into central issues related to stability and welfare that are recurring themes throughout Chinas history and continue to this date. This will be presented for the era leading up to 1978 (Chapter 2.1) and the present reform period (Chapter 2.2) in order to allude to those patterns which are of importance for future development. Concluding passages will analyse significant challenges for and the critical task of financing the forthcoming development path (Chapter 2.3).
2.1 Stability and Welfare as Governance Maxims throughout the Millennia
Generally speaking, hindsight allows for a deeper understanding of development patterns, including the inherent strengths and weaknesses. This is an indispensable basis for anticipating future challenges and opportunities and particularly useful when trying to evaluate Chinas performance, especially considering that the country ranked amongst the most advanced nations in the world until the Song Dynasty (960-1279), when it entered a long period of stagnation, economically and otherwise, before entering a remarkable phase of revitalisation, which began with the start of sweeping reforms in 1978. It remains to be seen to what extent the recent achievements can in fact be sustained in the long run. This chapter first addresses three major historical facets of the approach towards development which continue to have an important impact on development processes (Chapter 2.1.1) and then analyses the performance actually achieved until 1978 (Chapter 2.1.2).
2.1.1 Momentous Historical Occurrences
Three significant aspects of development that occurred within Chinas 3,000 year history are depicted here in order to show the degree to which historical processes are still of major relevance for an effective development in China today, , namely (i) early efforts to foster stability and welfare and establish an institutional framework with particular regard to the specific situation in China, (ii) Chinas encounters with western nations from the nineteenth century onwards, and (iii) the establishment of the Peoples Republic of China, a form of communist-based governance which continues, to this date, to display distinctly Chinese characteristics.