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Barry Naughton

Biography: 

Barry Naughton is an economist who specializes in China's transitional economy. He has written on economic policy-making in China, and issues relating to industry, foreign trade, macroeconomics and regional development in China. Naughton teaches at the Graduate School of International Relations and Pacific Studies of the University of California at San Diego. In 1998, he was named the first So Kuanlok Professor of Chinese and International Affairs, and he currently (2001–2002) serves as Associate Dean. His study of Chinese economic reform, Growing Out of the Plan: Chinese Economic Reform, 1978–1993 (New York: Cambridge University Press, 1995) won the Masayoshi Ohira Memorial Prize. His research on economic interactions among China, Taiwan and Hong Kong, focusing on the electronics industry, led to the edited volume The China Circle: Economics and Technology in the PRC, Taiwan and Hong Kong (Brooking Institution, 1997).

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Economic Policy

Waves of Criticism: Debates over Bank Sales to Foreigners and Neo-Liberal Economic Policy

by Barry Naughtonvia China Leadership Monitor
Monday, January 30, 2006

Financial reform policies have moved ahead rapidly in the last year. At the same time, a mood of disillusionment within Chinese society has been seized upon by critics of reform. General criticisms of "neo-liberal" policies worldwide have fed into specific criticisms of the practice of selling shares in state-owned banks to foreign financial institutions. Vigorous debate has been joined, but thus far, the debate has had limited impact on economic policymaking, which is still dominated by technocrats. However, the official sponsorship of such "leftist" critiques has contributed to increased tension in Chinese leadership politics generally.

Economic Policy

The New Common Economic Program: China's 11th Five Year Plan and What It Means

by Barry Naughtonvia China Leadership Monitor
Sunday, October 30, 2005

China's New 11th Five Year Plan proposals are remarkable, both for what they contain, and for how they were created. The proposals set few quantitative targets and no specific industrial policies or programs. Instead, they present a program for government action designed to ensure that rapid growth will be sustainable over the long term, and that the fruits of growth will be more equitably shared. The document was drawn up through a broadly consultative—but also tightly scripted—process. However, its recommendations are broad and abstract, and in many cases specific policies needed to implement the recommendations do not exist. Both the Plan and the manner in which it was drawn up are highly characteristic of the Hu Jintao-Wen Jiabao administration. As such, the plan should be seen as this administration's economic program.

Economic Policy

Incremental Decision Making and Corporate Restructuring

by Barry Naughtonvia China Leadership Monitor
Saturday, July 30, 2005

Economic and business stories have dominated Western press attention to China in 2005, perhaps more so than in any previous year. Perceptions of a dynamic "rising China" have burst into American consciousness in an unprecedented fashion. Ironically, however, leadership decision making on economic policy in China seems to be sliding back toward a more bureaucratically dominated and less imaginative pattern. From a policymaking standpoint, there has been little significant innovation during 2005. This article reviews developments in four areas: currency revaluation, share conversion, consolidation of firms, and the new industrial policy for the steel industry. Taken together, the trends in these areas suggest a move toward cautious, incremental, and bureaucrat-dominated policymaking as well as an effort to step up the pace of corporate restructuring.

Economic Policy

SASAC Rising

by Barry Naughtonvia China Leadership Monitor
Saturday, April 30, 2005

During April and May 2005, new policies were put in place to address some of the most contentious, long-running economic issues in China. Although the initial policy moves were modest, the way they played out illuminates the process of policymaking in China today, in particular the large and growing role of the State Asset Supervision and Administration Commission (SASAC). On balance, these changes have brought the SASAC to a substantially more important and powerful position in the Chinese economy.

Economic Policy

Economic Policy in 2004: Slipping behind the Curve?

by Barry Naughtonvia China Leadership Monitor
Sunday, January 30, 2005

When the Hu-Wen administration took power in spring 2003, it promised an ambitious two-stage program of administrative restructuring followed by decisive reform policies. While the first part of this program has been realized, the second has not. It would have been reasonable to expect a significant acceleration of economic reform and institutionalization during 2004. Instead, a general trend of slow and sometimes disjointed policymaking has emerged. This phenomenon is evident in the three most important areas of financial and macroeconomic policy: restructuring of the banking system, reform of the stock market, and the conduct of macroeconomic policy itself. In none of these three areas has decisive action been forthcoming, as policymakers have instead focused on redistributive policies, such as those affecting agriculture and regional development, a pattern of policymaking that presents numerous challenges and dangers.

Economic Policy

Changing the Rules of the Game: Macroeconomic Recontrol and the Struggle for Wealth and Power

by Barry Naughtonvia China Leadership Monitor
Saturday, October 30, 2004

The intensification of China's effort since April 2004 to reassert macroeconomic control has triggered a scramble for money and resources, as businesses and local governments faced an abrupt and unanticipated change in the overall economic climate. The scramble for resources has contributed to strains among regions and within the top leadership. It has also touched off conflicts among different business sectors—including state and private—as they maneuver to avoid the worst effects of reasserted macroeconomic control. The ultimate impact of the current imposition of macroeconomic control is still highly uncertain, and new consequences continue to ripple outward from this policy choice. The Fourth Plenum of the 16th Central Committee, scheduled for mid-September 2004, will bring these issues to a head, as the economic and political implications of macroeconomic recontrol become apparent and are worked through.

Economic Policy

Hunkering Down: The Wen Jiabao Administration and Macroeconomic Recontrol

by Barry Naughtonvia China Leadership Monitor
Friday, July 30, 2004

On April 26, 2004, the Standing Committee of the Politburo agreed to strengthen contractionary macroeconomic policies dramatically and to apply administrative controls over investment and land use. Within days, the State Development and Reform Commission (SDRC)—the former State Planning Commission—issued an urgent directive ordering the suspension and reinspection of thousands of investment projects. These steps represent a dramatic reorientation of Chinese macroeconomic policy. They have a significant political impact, bringing new leaders into the core of the economic decision-making process and shifting economic policy in a conservative direction. If not an outright step backward, these measures also indicate that economic policy approaches in place through the first year of the administration of Premier Wen Jiabao have failed to achieve their objectives. This piece describes the most important policy measures instituted; traces these measures' political implications, and assesses their economic implications.

Economic Policy

Financial Reconstruction: Methodical Policymaking Moves into the Spotlight

by Barry Naughtonvia China Leadership Monitor
Friday, April 30, 2004

The Wen Jiabao administration has found its feet and instituted ambitious initiatives in the financial arena. Since December 2003, major new policies toward the financial sector have been rolled out. Recapitalization, reorganization, and stock market listing of two of the main state-owned banks have begun. A program for new policies toward the stock market has been released. The launching of major programs follows the reorganization of the administrative apparatus and the promulgation of a series of laws and programmatic documents. Thus, the resumption of activist policymaking represents the culmination of a steady and methodical process of preparation. The degree of preparation is impressive, but it also reflects the magnitude of the challenges currently being faced and the difficulty of shepherding new policies through the Chinese political system.

Economic Policy

An Economic Bubble? Chinese Policy Adapts to Rapidly Changing Conditions

by Barry Naughtonvia China Leadership Monitor
Friday, January 30, 2004

During the first half of 2003, rapid growth in China led many to proclaim the emergence of an economic "bubble." Extremely rapid growth of money and credit was accompanied by rapid growth in investment, especially in the housing market. Chinese policymakers have taken steps to restrain the bubble, and these measures are now having an impact. During this first phase, the emergence of the bubble and the way that it was handled seem to have strengthened the positions of both Premier Wen Jiabao and Central Bank Governor Zhou Xiaochuan. However, the rapid emergence of the bubble economy reveals some unsettling realities about the Chinese economy. Moreover, the bubble portends important shifts in the economic payoffs and challenges that lie ahead for the political leadership.

Economic Policy

The State Asset Commission: A Powerful New Government Body

by Barry Naughtonvia China Leadership Monitor
Thursday, October 30, 2003

A powerful new government body, the State-Owned Assets Supervision and Administration Commission (State Asset Commission, or SAC, for short), was authorized at the 10th National People's Congress in March 2003 and set up operations in June. The SAC represents an important step forward toward clarifying and modernizing the administration of government property rights and improving the oversight of government managers. But at the same time, because the SAC is intended to gather the reins of many types of authority, there is a risk that it will become an overly powerful and interventionist body. The establishment of the SAC reveals much about the sources and exercise of political power in contemporary China. The commission's head, Li Rongrong, exemplifies the newly emerging technocratic leadership. But, the manner in which the SAC falls in the middle of contention over personnel authority also shows how old-style political considerations remain central.

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