Economic growth is the increase in value of goods and services produced by an economy, where high income and living standards leads to an increase in aggregate demand. Economic development is the change in structure of an economy in order to promote growth. The Chinese economy has implemented many strategies and reforms to achieve their high economic development and constant fast growth.
1949-1978 (Great Leap Forward/Big Push)
The Great Leap Forward was Mao Ze Dong’s attempt to modernize the Chinese economy by developing the agriculture and industry. It wasn’t successful because of political reforms to overthrow the communist party. There was a lack of trade, the heavy industries were inefficient, there were shortages of resources, little to no worker motivation, and poor quality in goods and services. The positive aspects include no unemployment since workers were allocated jobs and there was no inflation since prices were fixed, but the reform was a failure since there were more negatives. (Trueman)
After Mao’s death, Deng Xiaoping led China towards a socialist market economy instead of the planned economy. A reform on the agriculture system proved to be very successful; a “non-rural farming system” was implemented, and rural farmers could decide what to produce, which resulted in an increase in food production by 30% and rural income by 15% per year.
Another beneficial strategy was the “Open Door” policy, which set up Special Economic Zones in southern coastal provinces to attract foreign trade and investment. China was integrated into the global economic market through offering low tax rates, cheap labour and less regulation. This was very successful since standards of living were improved, and trade with other countries allowed them to enjoy an increase in imports as well as exports.
The decentralization of State Owned Enterprises (SOEs) was very successful, since the government’s role in the allocation of resources was...
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