China has become a frequently cited exemplary case for the successful economic transitioning from a socialism regime and the enormous act of lifting hundreds of millions of Chine out of poverty over a period of merely three decades. At the same time, Chinas little northern brother, Mongolia, is rarely the focus of comparative development analyses. The least densely populated country in the world has however been on a continuous path of increasing its international economic weight for the past two decades, and with a GDP growth rate of 18% in 2011 belongs to the world’s fastest growing nations.
With the exception of Citibank’s economist Willem Buiter, who grouped Mongolia as one of eleven “G3” countries to become the leading emerging nations of the future, international development studies do not tend to attribute much international significance of the land-locked steppe-country and its 2.8 million inhabitants.
At the same time, however, its Southern neighbor China has been watching closely, keeping an eye out on the enormous amounts of mineral resources which are dozing underneath the ‘world’s bluest skies’. Since Mongolia’s’ strong ties with the Soviet Union broke after a 70-year period of close economic collaboration, the treasures lying underneath the Mongolian steppe have once again come within reach of Chinas resource-hungry industries.
Table of Contents
Introduction: China and Mongolia Today
Situation before Transition: China
Situation before Transition: Mongolia
The State of the Economy after Transition: China
The State of the Economy after Transition: Mongolia
Conclusion and Outlook
Research Objectives and Key Topics
This essay provides a comparative analysis of the diverging economic development trajectories of China and Mongolia over the last three decades, contrasting China's incremental, state-led transition with Mongolia's adoption of rapid neo-liberal market reforms.
- Comparative economic history of China and Mongolia
- Incremental vs. shock-therapy transition strategies
- The role of state-owned enterprises and market liberalisation
- Resource nationalism and the impact of the mining sector
- Geopolitical and economic dependencies between the two nations
Excerpt from the Book
The State of the Economy after Transition: China
China constitutes the outstanding and exemplary case of a successful, gradual transition from a socialist towards a market economy without the administration of standard tools of neo-liberal market reforms and an administration of “shock therapy”. As Yang (1996) puts it, “conventional wisdom tells us that the odds of a communist economy making a gradual transition to a market economy are as slim as those of persuading a leopard to change its spots” (p. 424f) – and China’s success in pursuing a gradual reform strategy has represented a puzzle, particularly for many advocates of the neo-liberal school.
In the period between the late 1970s and the late 1990s, China astonished the world with three particular achievements: an impressive GDP development, with annual growth rates around nine per cent; an unprecedented reduction of extreme poverty from 250 million to around 50 million; and simultaneously an increase in life expectancy from merely 64 to over 70 years (Qian, 2003). These figures appear even more astonishing in direct comparison with similar achievements in other transformation countries which followed the prescriptions of neo-liberal shock therapy, particularly in the case of the Soviet Union.
Summary of Chapters
Introduction: China and Mongolia Today: This section introduces the economic disparity between China and Mongolia, highlighting their different transition histories and contemporary focus on mining.
Situation before Transition: China: This chapter covers the historical economic baseline of China under central planning and the challenges that led to the initiation of reforms in the late 1970s.
Situation before Transition: Mongolia: This section details Mongolia's history from the era of the Mongolian Empire to its period as a satellite state of the Soviet Union, including the implementation of its first 5-Year plan.
The State of the Economy after Transition: China: This chapter analyzes China's 'two-sector' and 'dual track' approaches to reform, emphasizing gradualism over immediate privatization.
The State of the Economy after Transition: Mongolia: This section examines the immediate economic collapse in Mongolia following the implementation of neo-liberal 'shock-therapy' reforms in the early 1990s.
Conclusion and Outlook: The concluding chapter summarizes the long-term outcomes for both nations, focusing on Mongolia's contemporary struggles with resource nationalism and reliance on Chinese demand.
Keywords
Comparative Political Economy, Emerging Markets, China, Mongolia, Economic Transition, Socialism, Neo-liberalism, Shock Therapy, Incremental Reform, Mining Sector, Oyu Tolgoi, Resource Nationalism, GDP Growth, Poverty Reduction, Market Economy.
Frequently Asked Questions
What is the core focus of this research?
The research focuses on comparing the different paths taken by China and Mongolia to transition from socialist planned economies to market-oriented systems.
What are the primary themes discussed in the paper?
The paper covers transition economics, the impact of reform strategies (gradualism vs. shock therapy), socio-economic development, and the geopolitical dynamics driven by natural resource extraction.
What is the main research question or objective?
The objective is to explain the divergence in development outcomes by analyzing how China’s state-led gradual reform strategy performed in contrast to Mongolia’s rapid neo-liberal transition.
Which scientific methodology is applied?
The author uses a comparative historical analysis and a review of existing economic literature and reports to contrast the reform milestones and institutional changes in both countries.
What topics are covered in the main body?
The main body treats the pre-transition economic state, the specific reform stages implemented in each nation, the effects of these reforms on GDP and social welfare, and the contemporary reliance of Mongolia on the mining sector.
Which keywords best characterize this work?
The most relevant keywords include Economic Transition, Gradualism, Shock Therapy, Marketization, and Resource Nationalism.
Why did Mongolia choose a shock-therapy approach compared to China?
Following the collapse of the Soviet Union, Mongolia sought to rapidly eliminate all vestiges of communist rule by following the advice of international agencies like the World Bank and IMF.
How does the author describe the relationship between Mongolia and its mining sector?
The author highlights the reliance on foreign-led projects like 'Oyu Tolgoi', noting that while these projects drive growth, they have also sparked 'resource nationalism' due to fears regarding foreign control of natural resources.
- Citation du texte
- Julia Kropeit (Auteur), 2013, The development trajectories of China and Mongolia, Munich, GRIN Verlag, https://www.grin.com/document/1275908
