Economic Reforms in China and Vietnam: Two Differing (And Yet Similar) Paths
China and Vietnam are currently two of the largest economies in Southeast Asia. Being neighbors, they share a lengthy history which includes periods of both cooperation and conflict. Their recent histories resemble each other in many ways – both China and Vietnam were colonized (though to different extents) in the period leading up to World War 2. During World War 2, both countries were occupied (though again to different extents) by the Japanese. In the wake of the war, communist insurgencies in both countries were ultimately successful in displacing non-communist regimes which received significant foreign assistance. Given the commonalities of their recent history, it would stand to reason that both countries would have similar experiences during both their Communist and reform periods. However, this has not always been the case.
In this paper, I will argue that even though both China and Vietnam have made significant advances in liberalizing their economies, what they have accomplished is often blown out of proportion. In particular, the economies of both countries are still heavily controlled by their respective governments. Though they differ in some ways – for instance, Vietnam has done a better job of liberalizing its banking system than has China, and China’s economic growth has been marked by a steep increase in inequality which has not been seen in Vietnam, they are both fundamentally similar in that many “commanding heights” industries are still controlled by the government.
Political Change in China and Vietnam The first article I will examine is Political Change in China and Vietnam: Coping With the Consequences of Economic Change. In this article, McCormick (1998) argues that both China and Vietnam have been profoundly changed by liberalization and that their