Research On The Development Of China 's Private Economy

Private economy plays a very important role in China’s market-oriented reform. However, the rise of private economy, including the determination of its legitimacy and the improvement of its institutional environment, would need its own scientific theoretical explanations. Through historical analysis and system comparison, this dissertation aims to make logical explanation for the development of the private economy in China and the evolution of its institutional environment. Furthermore, on the basis of the above explanation, the dissertation makes scientific judgments and proposes some feasible countermeasures for the new situations, new problems and new tasks that the private economy is faced with in its current development.As for research methods, based on the New Institutional Economics, especially Institution Change Theory as a tool, centering around the two core concepts "legitimacy" and "institutional environment", following the two main historical line, namely "the determination of its legitimacy" and "the improvement of its institutional environment" of the private economy, this article carefully compares the historical backgrounds, institutional policies, developmental effects at different historical stages of the development of the private economy in our country. It explores the decisive factors promoting the development of the private economy, reveals the motivation, mechanism and path of the institutional environment evolution of private economy, and the important roles of reformers and local governments in institutional innovation.This article draws three important conclusions:First, among the many factors that influence the development of China’s private economy, the institutional environment has played a vital role, while the key factors affecting the institutional environment is the legitimate status of the private economy. The legitimate status of the private economy includes not only the expression of legitimacy in formal legal documents, but also the legitimate position in the ideology composed by the Party’s theories, lines, principles, and policies. To some extent, ideological legitimacy is more important than the expression of legitimacy in the official legal text in the process of transition. Second, the history of China’s private economy shows that the private economy institutional environment changes along the specific mechanism, namely "social pressure-contribution of the private economy-ideological breakthrough-rise of its legal status-improvement of the institutional environment". That is, every large-scale improvement of the institutional environment of the private economy presupposes the ideological breakthroughs made by the Party and the government and the confirmation of the status of the private economy in forms of law, which in turn are made possible because there are difficult social problems for the Government to solve in specific historical stages and the private enterprises can play a vital role in the resolution of these questions. Therefore, the private enterprises’ irreplaceable contribution to society underlies the legitimacy of private economy. Third, the society faces different pressures and crisis, and the private economy faces different historical tasks at different historical stages. We need to constantly optimize the institutional environment to give support to private economy, but the premise lies in the new ideological breakthrough, the ratification of laws and regulations, and the actual implementation of laws in practice. Since the international financial crisis, the new tasks of the private economy are to act as the main force in changing the patterns of development and promoting scientific development. This requires a kind of loose institutional environment for the private economy which can better reflect the "human-orientedness, transparent rules, equity at starting point and fair competition" principle of market economy, all of which involve new breakthroughs in ideology, constitution and laws.The innovation of this article mainly lies in its innovative research perspectives, analysis units, theoretical models, and the historical phases. In particular, it puts forward the theoretical model of the private economy institutional environment evolution of our country, i.e."social pressure and contribution-enhanced legitimacy-improvement of institutional environment". Moreover, it analyzes the current institutional environment of China’s private economy with this model, covering the property protection institution, financing institution, market access regulation, finance and tax system, social service system, as well as moral culture and other informal systems. Finally, it proposes that since the international financial crisis, in order to let the private economy play an important role in promoting scientific development, and accelerating the transformation and upgrading, our country needs to make important strategic adjustment and top-level design, and adopt corresponding supporting policies and measures.