This study begins by reviewing the changes that have taken place in trade policy and in the process of economic and financial reforms since World War II, and examines postwar developments in the external financial systems of the U.S.S.R., Eastern European countries and the P.R.C. in the postwar period. There then follows a discussion of the kinds of external trade control that have been exercised, the characteristics of the external financial system, and the objectives and methods of implementing external financial policy in socialist countries. Finally, we describe the current exchange rates and external settlement, and compare them with each other and with Western countries.
The main findings of this report may be summarized as follows:
(1) Since the mid-1960s, due to their economic and financial reforms, the external financial systems and financial business of socialist countries have been changing significantly. By the late 1970s, the socialist countries were once again following the Western model.
(2) Since the end of the 1970s, the performances of the D.R.G. and the U.S.S.R. have been viewed as rather conservative when compared with other East European countries and the PRC. However, the internal and external financial system of the socialist countries cannot be separated from the “mono-bank or several banks system”. For example, the banking system in Romania is still based on the old Soviet model. However, the Eastern bloc countries, with the exception of the D.R.G., are gradually breaking away from the old Soviet model, and the “internationalization” of the external financial system in socialist countries, the U.S.S.R. included, has been more positive since the 1970s.
(3) With regard to the system of trade control, all of the Eastern European countries have adopted the “national monopolistic system” except Yugoslavia, the Eastern European countries have adopted the mainly officially-decided price system, with the result that there is strictly speaking no currency policy or interest policy, even the role of the government budget is still very important. Since the end of the 1970s, socialist countries have attached greater importance to economic growth and the efficiency of capital investment, and have begun to get involved in price stabilization, inflation control and the promotion of a more equitable real income distribution, adopting policy, tools somewhat similar to those adopted in capitalist countries, but their policy tools options are fewer.
(4) Although officially recognized foreign exchange banks are few and far between in socialist countries, since the end of the 1970s, they have become more apparent in Yugoslavia, Hungary and the P.R.C., particularly in the P.R.C. However, such banks still differ quite considerably from each other, regardless of whether they are participating in COMECON (CMEA) or IMF or not.
