This study examines the reform experience of China's three northeastern provinces, Heilongjiang, Jilin, and Liaoning, during the twenty-year period, 1978 to 1998. In contrasting Northeast China's modest success with reforming its heavily industrialized economy in accordance with the path to economic progress of market competition, profitability, and a reduced role for the state in economic management championed by the country's economic reformers with the rapid economic development of South China, the study argues that political as well as economic factors determined the pace and direction of economic reform in the region. The study looks at the region's reform experience through the window of the dynamic of the relations between central authorities in Beijing and authorities in the region's provinces. This dynamic was shaped importantly by the Northeast's role as the core of China's experiment with Soviet-style industrial development (by virtue of its early history of planned industrial development under Japanese and Russian imperialism and its proximity to the Soviet Union). As such, it also served as a key training ground for the generation of technocrats who rose to political power after the Cultural Revolution. For many of these technocrats, some of whom ascended to the highest levels of national policy making, this experience played an essential part in shaping the way they viewed the region's role in the country's economic development and, at times, made use of their ties to the region in strengthening their own political hands. In addition to exploring the relationships between key national leaders and the region and their policy implications, this study examines the economic, infrastructural, and international factors shaping the region's reform experience. It also briefly considers the prospects for the region's economic transformation and its future stability following the commitment to the “corporatization” of state-owned industry at the 15th Party Congress.
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