PEOPLE'S REPUBLIC OF CHINA - PRC (ENCYCLOPEDIA)

Abstract

The People’s Republic of China (PRC) was established in Beijing by Mao Zedong in 1949. Since 1971 it’s part of the United Nations system and it’s a permanent member of the UN Security Council. The PRC is also a member of several international organizations such as World Trade Organization (WTO), Asia Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (ASEAN), Shanghai Cooperation (SCO). In the PRC coexist authoritarian government led by Chinese Communist Party (CCP) and a mixed economic system with typical elements of a market economy and elements of economic planning. For these reasons in a short time the PRC has become, by size of Gross Domestic Product (GDP), the second largest economy in the world after the United States. In the international relations the economic prestige, achieved thanks to the rapid growth in recent years, is the principle means to attract under his influence the developing countries.

Economy

The Chinese Constitution defines economic system like Socialist Market Economy. A system where the socialist regime becomes compatible with market economy. China has initially focused on the Soviet model of development with industrialization planned to ensure the political independence, then in the eighties starts transition to market economy. In twenty years, the PRC has achieved impressive economic development, with annual average GDP growth near 10%. The growth has transformed China from third world country in leader of the world economy. In recent decades, the PRC has been able to overcome serious global economic crisis. The economic development of China is one of the most important phenomena of the world economic history since World War II. Today, China is the first holder of the United States Bonds and the largest funder of its debt. 

The Table 1 shows the major economic indicators of the PRC:

Source: Intelligence Unit-Country Report China May 2013.

In the economic structure, the low labor cost and the enormous amount of labor help to give effect to foreign investment in the country by encouraging the relocation of foreign companies. The companies with foreign capital participate in one-third of total industrial production. Among developing countries the PRC is the first that receive Foreign Direct Investment (FDI). Since 2013, the PRC is the largest exporter and importer of goods in the world with the balance of trade in surplus of about $ 200 billion. These factors have "forced" some countries to rebuild their economies adapting to the needs of "Made in China". Many countries, seeing the deterioration in their deficit and the loss of market share in key productive sectors, they lower production costs to remain competitive in the international market. In addition, the possibility of collaboration with multinationals and foreign companies in China, has enabled the Chinese public companies to exploit the models of Western management, Corporate Governance, organizational and market strategies. The industrial sector has the greatest impact on GDP, followed by the services sector and agriculture. The latter is the sector that employs the majority of the workforce. Despite the expansion of the private sector and the profound transformation of state enterprises thanks to the economic reforms of 1978, they continue to play a key role in China's economic policy.

The China's financial system is characterized by the public ownership of banks (State Bank Owned - SOB), and is regulated by People’s Bank of China (PBOC), which manages the monetary policy,  it emits the official currency (Renminbi Yuan) and regulates other financial institutions. In addition to the PBOC the main institutions of the China’s Banking System are the Bank of China (BOC), China Construction Bank (CCB)Agricultural Bank of China (ABC), Industrial and Commercial Bank of China (ICBC).

Politics

The Constitution is the fundamental law of the PRC and defines it as "a socialist state of the people's democratic dictatorship led by the working class and based on the alliance workers-peasants." The Constitution gives political leadership of the country to Chinese Communist Party (CCP). The CCP is characterized by the National Congress, convened every five years.

The China is a People’s Republic with authoritarian system of government. In contrast to many forms of Western government based on a separation of the three powers (legislative, executive, judicial), the Constitution establishes the National People's Congress (NPC) as the supreme body of state power. In addition to ANP the other fundamental institutions of China are the Council of State, the President of the PRC, the Supreme People's Court, the Supreme People's Procuratorate and Central Military Commission.

1.National People's Congress (NPC).

The National People's Congress (NPC) of the PRC is the highest organ of state power. The term of office of the NPC is five years. The NPC is empowered with the rights of legislation, decision, supervision, election and removal. The main functions are: To elect members of the Standing Committee of the NPC; to elect the president and vice president of the People's Republic of China, and decide on the choice of the premier of the State Council upon nomination by the president, the choice of other members composing the State Council upon the nomination by the premier; to elect the chairman of the Central Military Commission; to formulate and revise the Constitution and supervise its implementation; enact and revise basic laws and other laws of the state; to examine and approve the plan for national economic and social development; to examine and approve the state budget and the report on its implementation; to approve the establishment of provinces, autonomous regions, and municipalities directly under the Central Government. ANP is also formed by the Standing Committee, the body that carries out the functions of the Assembly when it doesn’t  meet.

2. State Council.

The State Council of the PRC, namely the Central People's Government, is the highest executive organ of State power, as well as the highest organ of State administration. The State Council is composed of a premier, vice-premiers, State councillors, ministers in charge of ministries and commissions, the auditor-general and the secretary-general. The State Council is responsible for carrying out the principles and policies of the Communist Party of China as well as the regulations and laws adopted by the NPC, and dealing with such affairs as China's internal politics, diplomacy, national defense, finance, economy, culture and education.

3. President of RPC.

The President of RPC is the Head of State, as well as the supreme representative of China both internally and externally. It’s subordinate to the NPC. The main functions are: promulgating laws, appointing and removing the premier, vice premiers, state councilors, ministers of ministries and state commissions, auditor-general, and secretary-general; appointing or recalling China's plenipotentiary representatives abroad, and ratifying or abrogating treaties and important agreements concluded with foreign countries.

4. Supreme People’s Court.

The Supreme People's Court is the highest trial organ in the country and exercises its right of trial independently. It is also the highest supervising organ over the trial practices of local people's courts and special people's courts at various levels. It reports its work to the NPC. The right of appointment and removal of the president and vice presidents as well as members of the trial committee of the Supreme People's Court lies with the NPC.

5. Supreme People's Procuratorate.

The Supreme People's Procuratorate are the legal supervision organs of the state. The prosecution system consists of the Supreme People's Procuratorate, local people's procuratorates and special people's procuratorates such as the military procuratorate.

6. Central Military Commission.

The Central Military Commission of PRC is the highest state military organ with the responsibility of commanding the entire armed forces in the country. Led by a chairman and consisting of vice chairmen and members, the Commission is elected for a term of five years and can stand for reelection.

PRC’s  international relations

China is considered the country with fastest-growing in international system, both economically and politically. The PRC is, in fact, a permanent member of the UN Security Council, it’s part of several regional organizations (ASEAN, SCO, APEC) and thanks to the entry into the WTO and participation in the G2, has decreed its seamless integration even in world economy. In a short time the extraordinary economic results define the PRC as the most dynamic and largest economy in the world after the United States, with the possession of the majority of U.S. government bonds. In addition, the Chinese government uses the Soft Power1 (see Nye 2004), as "means of pressure" for developing countries. These factors contribute to the discussions about real PRC capacity to offer different developmental model from Wahsington Consensus and about the admissibility of the term Beijing Consensus. Other authors of international relations theory consider the Chinese foreign policy declined in the "Five Principles of Peaceful Coexistence" (respect for territorial integrity and sovereignty, non-aggression, non-interference in internal affairs, equality and mutual benefit in trade and peaceful coexistence) developed and codified since 1954 in a trade agreement between China and India. Since then, in the ideas of the CCP these principles were intended to govern the relations between the other States and China. According to this view the priority of China seems to consist in maintaining the political stability necessary for the pursuit of their own economic development and the rejection of any hegemonic pretension.


1Term used for the first time by Joseph Nye in international relations theory to indicate the power of persuasion of a state using intangible assets such as culture, values ​​and political institutions. This term is opposed to Hard Power that is the power exercised by military coercion.


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Editor: Giovanni AVERSA