The Chinese economic reform refers to the program of economic reforms termed "Socialism with Chinese characteristics" and "socialist market economy" in the People's Republic of China (PRC). The reforms were started by reformists within the Chinese Communist Party—led by Deng Xiaoping—on December 18, 1978, during the "Boluan Fanzheng" period. They went into stagnation after the 1989 Tiananmen Square protests, but were revived after Deng Xiaoping's Southern Tour in 1992. In 2010, China overtook Japan as the world's second-largest economy.
Before the reforms, the Chinese economy was dominated by state ownership and central planning. From 1950 to 1973, Chinese real GDP per capita grew at a rate of 2.9% per year on average, albeit with major fluctuations stemming from the Great Leap Forward and the Cultural Revolution. This placed it near the middle of the Asian nations during the same period, with neighboring capitalist countries such as Japan, South Korea, Singapore and rival Chiang Kai-shek's Republic of China (also known as the Four Asian Tigers) outstripping mainland China's rate of growth. Starting in 1970, the economy entered into a period of stagnation, and after the death of Mao Zedong, the Communist Party leadership turned to market-oriented reforms to salvage the failing economy.
The Communist Party authorities carried out the market reforms in two stages. The first stage, in the late 1970s and early 1980s, involved the de-collectivization of agriculture, the opening up of the country to foreign investment, and permission for entrepreneurs to start businesses. However, a large percentage of industries remained state-owned. The second stage of reform, in the late 1980s and 1990s, involved the privatization and contracting out of much state-owned industry. The 1985 lifting of price controls was a major reform, and protectionist policies and regulations soon followed, although state monopolies in sectors such as banking and petroleum remained. In 2001, China joined the World Trade Organization (WTO). The private sector grew remarkably, accounting for as much as 70 percent of China's gross domestic product by 2005. From 1978 until 2013, unprecedented growth occurred, with the economy increasing by 9.5% a year. The conservative Hu Jintao's administration regulated and controlled the economy more heavily after 2005, reversing some reforms. On the other hand, a parallel set of political reforms were launched by Deng in 1980, but eventually ended in 1989 due to the Tiananmen Square protests.
Meghna Thapar 4 years, 9 months ago
The Chinese economic reform refers to the program of economic reforms termed "Socialism with Chinese characteristics" and "socialist market economy" in the People's Republic of China (PRC). The reforms were started by reformists within the Chinese Communist Party—led by Deng Xiaoping—on December 18, 1978, during the "Boluan Fanzheng" period. They went into stagnation after the 1989 Tiananmen Square protests, but were revived after Deng Xiaoping's Southern Tour in 1992. In 2010, China overtook Japan as the world's second-largest economy.
Before the reforms, the Chinese economy was dominated by state ownership and central planning. From 1950 to 1973, Chinese real GDP per capita grew at a rate of 2.9% per year on average, albeit with major fluctuations stemming from the Great Leap Forward and the Cultural Revolution. This placed it near the middle of the Asian nations during the same period, with neighboring capitalist countries such as Japan, South Korea, Singapore and rival Chiang Kai-shek's Republic of China (also known as the Four Asian Tigers) outstripping mainland China's rate of growth. Starting in 1970, the economy entered into a period of stagnation, and after the death of Mao Zedong, the Communist Party leadership turned to market-oriented reforms to salvage the failing economy.
The Communist Party authorities carried out the market reforms in two stages. The first stage, in the late 1970s and early 1980s, involved the de-collectivization of agriculture, the opening up of the country to foreign investment, and permission for entrepreneurs to start businesses. However, a large percentage of industries remained state-owned. The second stage of reform, in the late 1980s and 1990s, involved the privatization and contracting out of much state-owned industry. The 1985 lifting of price controls was a major reform, and protectionist policies and regulations soon followed, although state monopolies in sectors such as banking and petroleum remained. In 2001, China joined the World Trade Organization (WTO). The private sector grew remarkably, accounting for as much as 70 percent of China's gross domestic product by 2005. From 1978 until 2013, unprecedented growth occurred, with the economy increasing by 9.5% a year. The conservative Hu Jintao's administration regulated and controlled the economy more heavily after 2005, reversing some reforms. On the other hand, a parallel set of political reforms were launched by Deng in 1980, but eventually ended in 1989 due to the Tiananmen Square protests.
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