China: Building "Capitalism with Socialist Characteristics"

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HARVARD BUSINESS SCHOOL 9-706-041 REV: OCTOBER 16, 2006 DEBORA SPAR JEAN OI China: Building “Capitalism with Socialist Characteristics” We must not act like women with bound feet! If we want socialism to triumph over capitalism, we should not hesitate to draw on the achievements of all cultures. We need to learn from other countries, including the developed capitalist countries. — Deng Xiaoping, 19921 In November 2005, the Central Committee of the Communist Party of China issued its 11th five- year plan. As was typical for such pronouncements, the plan touched on many aspects of China's economy, including its fiscal situation, its current account surplus, and its desire to equalize rural and urban incomes. But the central theme was growth.…show more content…
Instead, the emperors and their bureaucrats devoted themselves to artistic and scholarly pursuits, nurturing a civilization that produced classic works of art and literature, as well as the great philosophers Confucius and Lao Zi. When the power of the Zhou royal family at last declined in 403 B.C., wars broke out among some 170 feudal lords, throwing China into an era of political anarchy now labeled the Warring States Period. Chaos prevailed for nearly 100 years, until a single family managed at last to defeat the rival lords and bring China again under a common rule. The new emperor, Qin Shi Huang, then set out to establish a universal and everlasting empire. During his 11-year tyrannical reign, Qin killed thousands of Confucian scholars, divided the estates of other lords into smaller private plots, and undertook great public projects such as the reconstruction of the Great Wall of China. To ensure that his empire remained intact, Qin also established a formal system of government that linked the villages to central provinces and thence directly to the emperor. Between the emperor and the people he created an elaborate imperial bureaucracy that was to dominate China for the next two millennia. Throughout this period, the core of China remained remarkably stable. It was largely an agricultural society, bound and nearly defined by Confucianism, a body of political and moral
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