This study maintains that China's system of economic planning tends
to mitigate the trade-off between economic growth and equity that
has been found to prevail in the early stages of development in
most less developed countries. The analysis focuses on the Chinese
leadership's attempt to improve economic efficiency by
decentralizing economic management without encouraging, as a
consequence, increased economic inequality among different regions.
By examining the budgetary and planning process, focusing in
particular on the fiscal relations between the centre and the
far-reaching degree of resource redistribution undertaken by the
central government through its control of interprovincial and
intersectoral resource transfers. Professor Lardy's analysis
highlights the essential features of Chinese economic growth and
relates these to the experience of both developing and Soviet-type
economies.
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