Economy In Transition Countries In The Context Of Economic Globalization, Liberalization And Market Opening Study

In the 1990s, with the economic transition of former Soviet Union and some socialist countries in East Europe, the economic layout in the world changed dramatically. The "two parallel markets" disappeared and the real global market came into being. It was also in this period that economic globalization began to develop with an unprecedented speed, with great impact on the political, economic, and social development of many countries in the world. Economic globalization as the background, economic liberalization and market opening as the major contents, the theory of Neo-Liberalism as the guideline, and the building of market economy system and democratic system as the goal are the common characteristics that can be found in the process of economic transition of those countries in this period. It is based on this point that this dissertation focuses on the issue of economic liberalization and market opening of transitional economies in the background of economic globalization.This dissertation is composed of seven chapters. The first chapter discusses such issues about economic transition as the current research; theoretical paradigm; and perspective, premise and method of study. The essence of Neo-Liberalism—Washington Consensus is the core theory of the economic transition of many countries. Neo-Liberalism is the theoretical basis for major western capitalist countries not only to promote the process of globalization and snatch benefits globally, but also to include developing and transitional economies into the market economy system, even their global benefit system. This chapter emphasizes the meaning and theoretical system of Neo-Liberalism; reviews the causes for its emergence and its characteristics, its political and economic paradigm, its relationship with economic globalization, and its influence and reflection on the theory and practice of economic transition. New-Keynesianism, New Institutional Economics, Public Choice Theory are also theoretical basis for the study of economic transition. This dissertation divides the process of economic transition into three stages, and establishes the following thought path: with economic globalization as the background and economic transition entering the third stage as the premise, it starts from the causes, methods, and contents of economic liberalization and market opening of transitional economies; then analyzes the result, effect and macro regulation; concludes the common characteristic of market opening and economic liberalization in a globalization background; endeavors to find transitional strategies to the realities of transitional economies such as China.The second chapter involves the relations between transition and globalization, which includes the content, causes, common characteristics and trends of globalization, the inherent consistence and conflicts of globalization and transition. Privatization, liberalization and market opening policies in the transitional economies accelerate their pace in globalization. Both globalization and transition base themselves on the theory of Neo-liberalism. The conflicts come from the complexity and protracted nature of transition as well as the trade-off between national industrial policies and liberal and open globalization policies. Such issues as national economic security, sovereignty and transitional culture are inevitable considerations that no country can ignore in the process globalization. The relation between transition and globalization determines the inter-active nature between the two, which is narrowed down in the later part of this chapter.The third chapter discusses drives and problems concerning economic liberalization and market opening of transitional economies. The liberalization and market opening are propelled by both internal and external drives. The internal ones fall into four groups. First, the command-based planned economies lost their advantages to market economies; second, reforms fail within the framework of planned economies; third, the planned economies lost their edge in the globalizing world economy; and the last, ideology changes and people embrace the concept of opening. External falls into four group, too. First, the overwhelming globalization becomes inevitable trends which the transitional economies have to face seriously; second, the pervasive market economy become be a must-be of transitional countries; third, the fast changing of technology, and information in particular, brings people from the industry age to the information age; the last, the hyper-national institutions—IMF, WTO and World Bank—speed up the pace of globalization of transitional economies, particularly of financial and trade globalization. This chapter also discusses some problems in the liberalization and opening practices in transitional economies.The fourth chapter analyses the problems concerning economic liberalization and market opening. Basing on the discussion about liberalization practices in Russia and Eastern European economies, this chapter analyses the cause of recession during liberalization, arguing that the factors such as improper decisions are the major causes. The economic freedom index measures the performance of liberalization. This chapter analyses the economic freedom of China and Russia, generalizes the common characteristics of liberalization of transitional economies. The dissertation concludes that economic freedom and economic development shows a significant correlation in market economies and a weak one in transitional economies. It argues the complexity and protracted nature of institutional construction, and the weak viability of businesses in transitional economies is contributable to this difference. This chapter also discusses some issues concerning market opening such as trade liberalization, financial globalization, external debts, the productive internationalization, accession to international organizations, and the shift of governmental functions.The fifth chapter discusses the macro-regulation of liberalization and market opening. Market economy does not guarantee equality and social justice, so the government intervenes. The globalization process influences the macro-regulation of transitional economies. Trade and investment liberalization, and financial globalization constitute a transmitting mechanism for international economic fluctuation which cripples the effect of fiscal and monetary policies. The predominant position of MNCs affects industrial policies and regulations of transitional economies. This chapter also discusses some key issues concerning macro-regulations including fiscal policy, financial system reform, governmental regulation, and anti-monopoly.The sixth chapter consists of an empirical analysis of liberalization, market opening and transition of China and Russia. This chapter analyses Russia's transition history, appraising its domestic and foreign policies, national economic securities concerning liberalization and market opening. As for China, this dissertation discusses the background, progress and existing problems concerning liberalization and market opening from three perspectives: trade liberalization, financial globalization and investment liberalization. Particularly, this chapter analyses the problems facing China's trade liberalization, and new trends in FDI to China.