The fiscal system of China during the reform era was managed on a basis that prioritized the economic development of certain areas over equal development across all areas. Consequently, fiscal redistribution among areas by central government weakened through the 1980s, and the gap in spending power between coastal and inland areas has grown consistently since that period. Moreover, some researchers have pointed out that the ‘tax assignment system’ (fenshuizhi), which was introduced in 1994 to improve this situation, has not achieved the desired effect. On the other hand, the reform of the financial system, which also took place in the mid-1990s, expanded control of the central bank. This reform comprised: (i) the establishment of banks that concentrated on public finance; (ii) the abolition of the provincial branches of the People’s Bank of China; and (iii) the establishment of various financial laws. Previous research in the US, EU and Japan has shown clearly that the gap in consumption per person among the provinces is smaller than the gap of per capita GDP, because the temporary shock in GDP can be smoothed by various ways, such as moving treasury funds between areas, and fluctuations in savings in each area. However, research that clearly shows the function of consumption smoothing among the provinces, especially by the fiscal or financial means, has never been done before. In this paper, we carry out an econometric analysis which uses economic indices, such as per capita GDP within provinces, to show whether the function of consumption equalization has even been seen in China, and what kind of role the fiscal and financial system played in this, and whether there was any change that depended on reform of the reforms, such as the introduction of the tax assignment system. Based on the results of this analysis, we try to find the problems that Chinese macro- economic and redistribution policy have confronted in recent years, and to consider the direction in which the ongoing fiscal and financial reform should advance.
The purpose of this article is to describe a process by which political ideology penetrated rural modern China. As one method for analysis, I will study the rationale behind deciding a criterion for determining class in carrying out land reform. The difference between the criterion of the given classification and its practice was not a result of the deviation from the inexact scheme but because of the rationality behind the scheme.
There were three reasons for such a difference between ideology and practice. One reason was the change of intention of the senior leadership. When the requirement of materialistic motivation to attract peasants was needed in land reform, the criterion of classification inclined strongly toward materialistic objects such as land. However, when the requirement of the materialistic motivation in attracting peasants did not exist, labor exploitation rather than materialistic factors became the main criterion in determining class. Furthermore, work team cadres tended to carry out rapid and efficient land distribution. Such a tendency strengthened the materialistic aspect of classification and the criterion of land amount was strongly considered in determining the class of peasants.
Lastly, the process for restricting the scope of the criterion in classification and the response to the restriction were major factors. In other words, class was determined mainly on the basis of labor amount. For this reason, actual conditions of peasants and the amount of hired labor were essential information. However, even villagers could not remember the labor conditions of the peasants because many of them had moved around and were employed under a variety of contracts concerning working time and workplace. Due to the lack of data on labor conditions, the criterion of labor exploitation in determining class was difficult to apply. However, because the Chinese authorities wanted to demonstrate that they had succeeded in the materialistic motivation of peasants, they had to avoid a delay in land distribution. Therefore, they did not adhere to the investigation of the quantity of labor exploitation. In reality, the criterion for determining class shifted to land amount, thereby avoiding a dogmatic application of the criterion of labor exploitation. Regulation of the peasants, which prevented the policies from penetrating into the villages, was another important issue. Peasants knew very well that hiring others and possessing wealth made their class higher without understanding the complex calculation process. To increase the class of the objects of struggle, peasants often inflated the number of their employees. This situation prevented Chinese authorities from reducing the number of struggle objects. To solve these problems, the absolute value of labor exploitation was established based on the amount of one’s land, and this was then compared with the actual evaluation result to determine the class of peasants. This evaluation method reduced the distortion created by an inflated number of employees and proved an effective means by which work cadres could understand and use the information. However, the concept that the amount of one’s land is directly proportional to the number of one’s employees was an oversimplification that inevitably resulted in inaccurate results in the determination of labor exploitation. And the factor for determining one’s class was disproportionately dependent upon the amount of land because the evaluation method was largely based on the amount of land. Such a discrepancy from political ideology could be a byproduct of pursuing a simplified rationality.
The penetration process of the policy into rural China can be described as follows. The transition of senior leadership’s intention and the rationality of work made by work cadres resulted in the revision of policies. In addition, the labor conditions and awareness of peasants was so difficult for
Factional violence was the most important phenomenon during China’s Cultural Revolution.How did factions come into being? How did one faction come into conflict with another one?Previous studies have focused primarily on patron-client relations and/or class relations which existed prior to the Cultural Revolution. From the perspective of resource-mobilization, this paper argues that patron-client relations or class relations per se would not lead to factional violence. The author contends that whether patron-client relations or class relations would lead to factional violence depended on how these relations were mobilized. The paper focuses on micro-level factors to explore the formation of factions and factional fighting. It is based on comprehensive data collected from a textile factory in China’s Shanxi province. The paper first identifies three types of social movement participants, namely faction leaders, active participants, and passive participants. It then explores how faction leaders came about, what roles they played during the formation and development of factions, and how they mobilized various resources in competition with other factions. The paper has three major findings. First, there were two main forms of mobilization, namely political mobilization by political leaders (from higher levels), and resource mobilization by faction leaders (at local level).The former often provided both opportunities and constraints for the latter, while the latter maintained a degree of autonomy in mobilizing available resources at hand as well as in deciding which political leaders they should support. Violence was often the result of interplay between political leadership and faction leaders. Second, faction leaders played important roles during the formation of factions and in ensuing com petitions with other factions.In other words, violence was a result not only of political mobilization from above; more importantly, it was a result of resource mobilization from below.Third, the formation of factions was political.Mobilization from above during the pre-Cultural Revolution period (e.g. the fourcleans or si qing movement) and mobilization from below during the Cultural Revolution created enormous tensions among social groups. These tensions came to be important tools during faction formations and in factional struggles, where the likes of patron-client relations or class relations can be mobilized to achieve certain political goals.
Reflecting on recent efforts to promote bond market development in East Asia, this paper focuses on the determinants of corporate credit rating behavior of US and regional credit rating agencies. The following implications are derived from an empirical analysis using corporate data from 1998 to 2002. First, the corporate interest coverage ratio is significantly related to the corporate rating behavior of US rating agencies, but is insignificant with respect to the rating decisions of local agencies. On the other hand, firm size significantly influences the rating decisions of regional agencies while it is insignificant with respect to US agencies. Furthermore, each of the four local credit agencies has an individual factor that determines corporate bond credit rating. This paper infers that this difference in determinants originates from various factors such as long-term experience in the rating business, ownership structures and historical business backgrounds.
The policy of the Vietnam Worker’s Party (VWP) towards unification of Vietnam after the Geneva Conference in 1954 resulted in the division of Vietnam into North and South to ensure the ceasefire between France and the Democratic Republic of Vietnam, and the intention to hold a general election in 1956. However, the way of asking the general election, stipulated in the Geneva Agreement to unify North and South Vietnam, was a political struggle for the South Vietnamese government. It opposed the general election, which was scheduled for 1956, and began to suppress people who were suspected of being communists. Consequently, the VWP had to reconsider its policy to liberate South Vietnam. It is said that Le Duan, the former SecretaryGeneral of the VWP, played an important role in changing party policy from a political struggle to an armed struggle in South Vietnam, a move that was decided at the 15th Party Plenum in1959. His paper, Duong Loi Cach Mang Mien Nam (The Line of the Revolution in South Vietnam), had a great impact on cadres in both the North and the South at that time. Based on published documents in Vietnam, the main purpose of this paper is to examine how Duong Loi Cach Mang Mien Nam had an impact on VWP policy concerning armed struggle, andhow it is regarded in Vietnam today. The fascination of using the VWP document for this study is its scarcity value. Although Duong Loi Cach Mang Mien Nam is very popular among scholars, it seems that most non-Vietnamese researchers have been unable to obtain the original document.They usually have to use documents that were captured by the CIA or the US army. Duong Loi Cach Mang Mien Nam was written when Le Duan was in the South in 1956. At that time the South Vietnamese people were campaigning to ask their government to hold a general election with North Vietnam within the constitution and the laws of South Vietnam. But Duong Loi Cach Mang Mien Nam in fact outlined a new revolutionary line by which the South Vietnamese people would overthrow their government, not the North Vietnamese, in order to liberate South Vietnam. Additionally, Le Duan suggested that there was a need to organize a new National Liberation Front for South Vietnam not for the whole country. This line was totally different from that of the VWP of Hanoi in that Hanoi had ordered political struggle throughout Vietnam from north to south. After returning to Hanoi in early 1957, Le Duan tried to change the policy from a political struggle to an armed struggle in South Vietnam. But it was not until 1959 that the VWP admitted that Le Duan’s policy was to liberate South Vietnam. It is currently considered in Vietnam that Duong Loi Cach Mang Mien Nam was the most significant factor in the initiation of the armed struggle in South Vietnam and organized the National Front for the liberation of the South.