INTRODUCTION

The goal of this chapter is to present to readers the most important structural and systematic information concerning internal political and economic arrangements in China. This combination is thought to introduce the subject in a way that would be useful for professionals, students and researchers. China will be analyzed as one of the most interesting examples of the development and implementation of political and economic thought in modern history.

The purpose of the chapter is not to judge or value those solutions, only to present and help to understand mechanisms and phenomena governing them. The positivist approach has no right to become more normative in this meaning. It will present the economic and political spheres separately, providing general principles and important details. Then, the effects of their mutual functioning in the People's Republic of China (PRC) will be summarized.

Readers must be aware that we are dealing with the second biggest economy in the world and the highest population in the world, a permanent member of the UN Security Council, nuclear superpower, the biggest industrial producer in the world and the longest lasting civilization in history. The chapter aims not only to describe a static state but tries to capture the dynamic nature of matters in the historical, cultural and social context. Aft er this Introduction it consists of two further sections. Section 2 introduces the Chinese political system, while section 3 presents Chinese economic issues. This dichotomous approach should provide readers with the basic terms and knowledge concerning China. The economic and political system of China is a result of Chinese history, culture, tradition, the perception of reality and, most of all, logic (by way of understanding the reality and the perception thereof). Without a proper understanding of Chinese perception and motives, communication with the “central state” 2 would be hard to establish. The framework for proper, mutual understanding and cooperation is a correct perception of reality which is reached only as a result of a correct research process.