he Economist 26)- Chinese people. Economic measures instituted by Deng Xiaoping have been grouped together, under the general term of gradualism, but many observers now say that in order for China to continue its double-sized growth over the long term and to rectify the problem of the state industries that are losing billions of dollars, economic "shock therapy" needs to be administered, and quickly. But the current plan of China’s President Jiang Zemin and his advisors includes no such shock therapy. It does include, however, divesting the government of all but one thousand of the more than three hundred thousand state-owned businesses that have cost the Chinese government $85 billion in looses over the past ten years. The following chart shows the distinctions of several of China’s economic indicators, and their changes since 1987. Table 1. Selected Economic Indicators (Billions of dollars) Factor 1987 1997 Change Gross Domestic Product 300 610 610 Merchandise Exports 30 180 150 Foreign Investment 2 48 46 Hard Currency Reserves 25 128 103 Losses of State-Owned Industries 3 88 85 (Business Week, Sept. 1997) From the preceding chart, the growth in China’s GDP over the past ten years in nearly indefinable. Other indicators are highly favorable, with the economy’s only apparent problem being that of the losses of the state-owned industries. The losses incurred over the past ten years could have served extremely well in furthering the quality of life of the Chinese people, rather than "simply" supporting the workers in those industries. Those workers represent no small percentage of the Chinese population- there are 100 million workers in those state supported industries that have lost so much money (Clifford et al.). The plan of action proposed by Jiang Zemin in rebuilding the Chinese economy includes: Restructuring state enterprises. Already responsible for a third of the country’s industrial output, these ...
