Professional Documents
Culture Documents
1978?
In a relatively short span of three decades, the Chinese economy under the
CCP has managed to open up its economy, embracing capitalism and most of
its practices. It is rapidly becoming the worlds second largest economy,
beating the developed economies at their own game. Chinese economic
transformation has been therefore largely successful. Nevertheless, given
the political conservative nature and authoritarian framework of the
communist regime, Chinese economic transformation remained incomplete.
Characteristics of a planned economy such as having a centrally planned
baking system and dominance by state officials have continued to plague the
development of Chinas market economy. This had been due to the fact that
Chinas economic transition has been evolutionary, gradual and mindful of its
own political realities.
After 1978, China has gradually and successfully opened itself up to the
forces of capitalism beyond its borders. Dengs socialism with Chinese
characteristics justified the establishment of capitalism within communist
China. Began with the establishment of four SEZ in Southeastern Chinese
coastal provinces. More trading cities flourished along the banks of the
Yangtze to facilitate international commerce into mainland China. Chinese
leaders toured the more developed countries to invite foreign capitalist firms
to invest and set up businesses in China. Industrial parks and preferential
treatments are in place to attract foreign capital and know-how.
Privatization has been introduced to improve on the efficacy of Chinas
agricultural and industrial productivity. In the agricultural sector, the
Household responsibility system was introduced to encourage greater
productivity as peasants could now sell their surplus crops on the open
market. TVEs were later established so that surplus labour in the countryside
could earn extra income, through employment in low-skilled manufacturing
industries. By 2008, the government allowed the more profitable farms to
enjoy greater EOS as they could from then lease their lands to smaller
farmers. Farmers in Yuanan could collaborate with foreign firms such as
Nescafe to cultivate modern cash crops. Monetary incentives were also
introduced to improve the processes and productivity of the SOEs. To make
the SOEs internationally competitive, they were restructured along the
managerial model of foreign-owned MNCs. Leaders of the SOEs were better
tutored in the capitalistic ways; they were given greater autonomy by the
government at making business decisions.
In addition, Chinese economic since the 1980s is becoming increasingly
market-oriented and less state-controlled. Monetary economy was
established with the abolishment of coupons by the 1980s as they yuan
became the nations legal tender. Retail and service sector began to flourish