Changes of Transition to Mixed Economy to China

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Mixed economy is developed by including elements of free market economy into the system to overcome the weaknesses of centrally planned economy. Different countries have a different mixture of degrees of private economic freedom and government regulation of markets in their mixed economies. Policies variegate between countries in different aspect, however, all of them are of the same objective, which is to improve the economy of their countries and welfare of citizen. Mixed economy enhances the economic development of the country. In a mixed economy, both state and public sectors have adjacent roles in developing the economy. Their efforts rolled into one, enhancing the economic to develop rapidly in a short period. There is also an optimum use of resources because private enterprises would find the best way to maximize their profit from limited resources. Wastage of resources is minimized as profit is the solitary motivation in private businesses. This is very important especially raw materials are depleting due to rapid globalization. Besides, there is a salmagundi of goods and services to suits everybody’s taste and preference and the market reacts very quickly to the demand of the consumers. Employees are more motivated and responsible because their jobs are no longer secured. China is one of the most successful countries in developing a mixed economy. Mixed economy had brought a lot of changes to the economy of China. One of the most significant changes is the tremendous growth of the country’s Gross Domestic Production (GDP). With reference to both figure 1 and 2 (Wikipedia, 2006), it is seen that in 1952, the nominal GDP of China was merely at 67.9 billion RMB Yuan. Since the reformation of market-based economics in 1978, The GDP of China has increased by leaps and bounds from 460.9 billion RMB Yuan in 1980 to a shocking 25507.0 billion RMB Yuan in the year of 2010. Farm privatization was carried out by introducing the Household Responsibility System,...
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