Conclusions

Abstract

This closing chapter presents the general conclusions and explores further the theoretical and policy implications of this research. The theoretical implication is related to the recognition that we have reached a stage in which we are able to advance the standard investment cycle theory of a socialist economy by integrating both the Hungarian School’s standard investment cycle theory and Kalecki’s distributive barrier theory into a new framework of growth cycle. The policy implication involves such issues as the investment inefficiency of the state sector, capital accumulation strategy, structural adjustment and reform of the state investment system. Section 7.2 presents the theoretical contribution of the research. Section 7.3 summarizes the stylized facts about aggregate investment behaviour in China both from a perspective that features the sources of investment hunger at the central, local and enterprise level, and from a perspective that emphasizes the link between key bottleneck constraints and retrenchment campaigns. Section 7.4 discusses the inefficiency caused by investment hunger and bureaucratic coordination, and examines how China’s state sector has suffered from investment inefficiency induced by the rigid state investment system. Section 7.5 deals with the difficulties and possible options for reforming the state investment system with reference to the renewed reform package of late 1993 and the evolution of the reform in 1994-98. Section 7.6 reviews what can be perceived as the major limitations of the research. Finally, section 7.7 makes some further comments on the critical issues highlighted by the research.

Keywords

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