Sunday, September 20, 2009

A Chinese Perspective on Cuban Economic Reform

It it commonly understood that China may not be a good model for Cuban economic reform. See Larry Catá Backer, Cuban Corporate Governance at the Crossroads: Cuban Marxism, Private Economic Collectives and Free Market Globalism. Transnational Law & Contemporary Problems, Vol. 14, No. 1, 2005. China is bigger, it economy is more diversified, it does not have to fear attack from the United States, it faces no economic embargo and the like. Yet, it appear that the Chinese themselves may not share this view. A few years ago, Jiang Shixue, of the Chinese Academy of Social Sciences, presented an interesting paper on this point that is worth reading. Jiang Shixue, Cuba's Economic Reforms in A Chinese Perspective (October 2002). For those who prefer a summary, an excellent one was recently published by a great new Blog--Lealtad 3 Eleven on Thursday, September 17, 2009: Summary of one article about Cuba's Economic Reforms.

The conclusion is worth considering seriously today by Cuba's leaders:

As Deng Xiaoping put it, “Do not believe that planning belongs to socialism and market belongs to capitalism. Both are instruments. Market can also serve socialism.” In order to speed up socialist constructions, China and Cuba need to implement economic reforms, and it is encouraging to see that both nations have achieved remarkable results.

In the light of China’s experience and lessons, the following implications are important: 1) pay more attention to theoretical innovation for the reform process; 2) choose the right speed of reforms; 3) “let some people get rich first”, but benefits of reforms should be equally distributed, 4) improve the ownership structure in a more effective way, 5) privatization is not panacea, but the SOEs should be reformed, 6) corruption is highly detrimental, and 7) “put a screen on the window when it is opened”.

Globalization is proceeding more swiftly than ever. Both China and Cuba must take an active attitude towards this tendency. As President Castro said, “Globalization is an inevitable process. It would be pointless to oppose a law of history.”18 But globalization poses both opportunities and challenges to socialism. As long as Cuba and China can stick to the policy of reforms and opening to the outside, socialist constructions will achieve great progress in the new century.

Jiang Shixue, Cuba's Economic Reforms in A Chinese Perspective (October 2002).

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