Authoritarian Regime and Economic Reform: A Case Study of China and Vietnam

In this paper, the author explores the causes behind the discrepancy in the two communist, authoritarian regimes, China and Vietnam: Both have experienced rapid economic growth, while China exceeds Vietnam in its productivity as well as GDP per capita, Vietnam has a more liberal environment and a more democratic political system. The author looks at design and implementations of the household registration system and the foreign direct investment policies as indicators for the differences in China and Vietnam. It is found that in China, a strong central state is existent, resulting in strict enforcement of the household registration system, which then in turn resulted in the higher economic growth in China and more severe social stratification. While Vietnam has a much loosely enforced household registration system, and both the positive and the negative effects of the system are mitigated in Vietnam. The Chinese’s state’s determination to improve economic performance also enabled different forms of local autonomous actions that improved the local and the national economy. The Vietnamese local autonomy was driven by the inflows of FDIs instead of by the central state, and did not have as great an impact on overall economic improvement in the entire nation. It is found at last that the economic and political discrepancies of China and Vietnam are a result of the difference in their state capacity. Although both are said to be authoritarian states, the different power dynamics within the political structure result in different policies and political institutions