Research On Economy Administration Pattern Innovation By The Chinese Government In A Globalized Economy

With the accelerating economic globalization process and China becoming more open to the outside world, China's economy is merging into the globalized world at a faster pace. The total volume of foreign trade reached from 29.23 billion dollars in 1979 tol760.6 billion dollars in 2006, accounting for 0.83% in the total volume of world trade in 1979 while it reached 9.6% in 2006.The foreign trade dependence rate was 11.26% in 1979 while in 2006 it reached 67.26%. FDI in mainland China develops rapidly, from 0.032 billion dollars in 1979 to 69.5 billion dollars in 2006. In 2006, the foreign capital that we utilize accounts for 19% of the total FDI that flows into the developing world. Overseas investment by the Chinese enterprises is also increasing, from 0.044 billion dollars in 1982 to 16.1 billion dollars in 2006. Foreign exchange reserve increased from 0.84 billion dollars in 1979 to 1066.3 billion dollars in 2006. In this process, although the government economic administration model has evolved continuously, it still remains an important question for the Chinese government which tries to innovate its economic administration model how to face the ever increasing merging of China's economy into the global economy.Since the reform and open policy, the Chinese government has been improving its model of administrating economy and made great achievements. However, since reform is a transformational process from the traditional planned economy to socialist market economy, the shortcomings inherent in the traditional government economic administration model still exists. The government monopolized the supply of public goods, planned the economy as a whole, and intervened with the market economy operation using administrative means which results in opaque government operation and unsound legal environment. There is a great discrepancy between this model and the one demanded by the socialist market economy which requires an indirect government administration of economy, scientific decision making, and a man-first leadership style. This requires the government to keep innovating its economic administration model in such aspects as function, means and organizational structure design, to speed up its mechanism transformation and help the Chinese economy develop quickly and soundly in the ever increasing merging process of Chinese economy into the world economy. In the context of economic globalization, the government can expand to some extent its functions according to the principles of simplicity and efficiency so as to better serve as the supplier of social public goods, and therefore it is important to assess the performance of government economic administration. The purpose of reform is to re-delimit the government functions and the scope and field of the public goods the government should provide in order to make it a rational economic entity in a market economy, to correct the mistaken decisions made by the government using the cost-benefit accounting so as to keep the government reform in a right track. Then based on the provincial panel data in' 1994-2003, using cost-benefit analysis, we calculate the economic administration performance of each province. The results demonstrate that the reform efficiency in the east area is the highest, with a typical cost-benefit rate of 1.25, the middle area comes next, with that rate being 0.25, and the west comes last, with that rate being 0.18. From this we know that the government reform in the east is the most successful and efficient. Besides, we make some hypotheses about the factors which may have some influence on the government economic administration performance and test these hypotheses using the panel data regression, and the results show that (1) there exists a positive correlation between civil servants' income and government reform performance, which shows that there exists some maneuverability for "high salary breeds honesty", and can to some extent prevent bribery and corruption, stabilize the civil servants and set up an honest and clean government; (2) there exists scale economy after re-delimiting government functions, appropriate expansion of government scale in the transformation process will help improve government reform efficiency; (3) to increase the degree of regional openness to the outside world is conducive to the government reform performance, and it is essential to set up government-market information exchange feedback mechanism for the government to improve its administrate transparency.The innovation of government economic administration functions is to form a macro-economic adjustment-and-control system with Chinese characteristics, to speed up market cultivation and legal system construction. In the process of transforming government functions in a globalized economy, the government should properly handle the relationship among the human being, resources, environment and economic development to ensure the national economy running in a sound circle when facing the international market competition pressure. At the same time, the government should also strengthen its social service function to perfect its social security system construction, accelerate structural reforms of the state owned enterprises to set up a modern entrepreneurial system, and perfect its macro economic adjustment and control function to strengthen its national economy security.The innovation of government economic administration functions should be based on the Chinese situation and may resort to the mature western economic administration means and experiences. The macro-economic adjustment-and-control means adopted by the advanced western countries are based on their own country's economic operation, while our country is in the transformation process from a highly concentrated planned economy to a socialist market economy, therefore, when adopting the economic administration means, we should start from our basic national situation when resorting to other countries' experiences. In recent years, we creatively adopted the "soft-landing" and "spot-checking" policies, land using ratifying policies and these proved successful in practice. The precious experiences we obtained provide useful references for our government to further adjust and control economy and solve the over-heated economy problem.As for the reform of government economic administration structure, after taking into consideration the western administrative structure reform trend, we put forward the aim, principles and suggestions for our government organizational reform. One important aspect of the administrative organizational reform in the west countries is efficiency first, which is embodied in its "small government", separation of functional organization from the government, division of authority among these organizations and their reinforcement, and the like. Against a background of worldwide government reform, the major task for our government organizational reform is to set up the government functional structure which is suitable to socialist market economy, gives priority to simplicity and efficiency, and at the same time monitor and strengthen it using cost-benefit accounting method. Government organizational reform should be adaptive to the socialist market economy, be in connect with the WTO principles, and be in accordance with government functional transformation, it should also put more emphasis on the cost benefit accounting and learn more from own country and other countries' experiences.