Chinas Ecomic Reforms
History of Chinese Economy
In 1949 the Communist Party was elected in China their goal was to transform China into a modern socialist nation, which meant to narrow the income difference by increasing the standard of living through industrilsation.The communist party continued to try to achieve this goal throughout the years by taking over certain industries and centrally controlling the overall planning and financial systems. In 1975 the Chinese Government spend about 25 prercent of their GNP to invest into their companies and infrastructure while this seems to be a relatively high percentage the true is that this rate secoryed onlay small amount of resources for the relative seize of the country, for example in 1976 only 16% of the GNP was invested in the US Ecomomie which represented $345 billion dollars, where the 25% of precent invested in China represented only $111billion dollars serving a population 4 times as big as the United States.
This led to smaller investment in Argiultar and limited China from producing or importing modern manufacturing equipment which causes the manufacturing plants to be some years behind modern western manufactories. In addition the central government inefficiency to make fast decision and be flexible among the difference region caused China to have a growing imbalance between industrial and argicular growth. In 1957 Mao Zedong noticed that the industries based central model that was adopted by China did not work and shifted greater ecomomical control to the providence governments.
In 1978 Diang Xiapnng the General Secraty of the Communist Party of China (highest postion within the chinesse Goverment) furthered changed the Chinese ecomomic model by opening up the countries for trade. In the past China policy was trying to achieve self suffiency but under Diang Xiapnng forgein trade was regarded as a important source for investment funds and modern technology which increased the value from import/exports from 10 percent of
In 1949 the Communist Party was elected in China their goal was to transform China into a modern socialist nation, which meant to narrow the income difference by increasing the standard of living through industrilsation.The communist party continued to try to achieve this goal throughout the years by taking over certain industries and centrally controlling the overall planning and financial systems. In 1975 the Chinese Government spend about 25 prercent of their GNP to invest into their companies and infrastructure while this seems to be a relatively high percentage the true is that this rate secoryed onlay small amount of resources for the relative seize of the country, for example in 1976 only 16% of the GNP was invested in the US Ecomomie which represented $345 billion dollars, where the 25% of precent invested in China represented only $111billion dollars serving a population 4 times as big as the United States.
This led to smaller investment in Argiultar and limited China from producing or importing modern manufacturing equipment which causes the manufacturing plants to be some years behind modern western manufactories. In addition the central government inefficiency to make fast decision and be flexible among the difference region caused China to have a growing imbalance between industrial and argicular growth. In 1957 Mao Zedong noticed that the industries based central model that was adopted by China did not work and shifted greater ecomomical control to the providence governments.
In 1978 Diang Xiapnng the General Secraty of the Communist Party of China (highest postion within the chinesse Goverment) furthered changed the Chinese ecomomic model by opening up the countries for trade. In the past China policy was trying to achieve self suffiency but under Diang Xiapnng forgein trade was regarded as a important source for investment funds and modern technology which increased the value from import/exports from 10 percent of