Transition of China —from Plan to Market Economy

Topics: Economics, People's Republic of China, Market economy Pages: 4 (1503 words) Published: April 20, 2013
The Economic Problem Essay/China
Transition of China —from Plan to Market economy
China possess capacious plains which are surrounded by various mountain chains. From 221 B.C to 1911 D.C, the economic pattern in china was traditional economy, in which the three basic economic questions were mainly decided by customs and conventions. However, during these 2 millenniums, China was not completely in the Traditional Economy. Its economic pattern was more analogous to the synthesis of Command, Market and Traditional economies since the booming commerce (both I nternal and external) and governmental monopoly were prevailing during that period(However, in most regions, traditional economy still plays a dominant role)The last dynasty-Qing Dynasty in china blocked the trade and communication with foreign countries as well as expelled all the foreigners to consolidate its dominion, the opportunity cost of this was profound and obvious - the backwardness of the whole country (lasting till nowadays)and the affliction from constant invasions. Let’s shift our sights to the history after 1949/10/1-the foundation of People's Republic of China. From 1949/10/1, the command economy was formally established in China. The reasons of this choice could be various, but the most important one was that during that time, the newly-built party faced threatens from both external and internal aspects, which motivated the leaders of the party to carry out Command Economy to consolidate their regime. The advantages of the choice of Command Economy were obvious, central government controlled all the resources and answered the three basic questions: what to produce, how to produce and for whom. The greatest example was the “Great leap” Campaign from 1958-1960 in China, during which the central government drew up a series of completely...
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