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China: Economic Growth And Regional Development.

4286 words - 17 pages

IntroductionChina is one of the oldest civilizations of the world, and was once at the forefront of development and innovation. This was not the case ever since the middle ages and China slipped into becoming a feudal nation. However, since the last 25 years, China has been taking strong strides in the economic world. Our report attempts to analyze how these changes came about.The People's Republic of China has been a communist country since 1949. Communism and Liberalization would appear to be antagonistic to each other. Government played a strong role in economic activities, including controlling the market entirely. Given the circumstances, why did China liberalize? Furthermore, how has liberalization benefited China? Has the liberalization extended to all classes of Chinese society? How has the Chinese polity and society reacted to the reforms? Are there any obvious differences between the liberalization process in China and India?Reasons for liberalization'Great leap forward', started by the Communist Party in 1958, was the first move by China towards large-scale industrialization, largely on the lines of Soviet Russia. Buoyed by the success of the first five-year plan, Mao diverted a large proportion of the workforce from agriculture to industry. This coupled with a series of natural disasters that plagued China in the late 50's, led to a giant drought, where as many as 30 million people are believed to have perished. Though it was a major economic failure, it was the first attempt by China to leverage its cheap labour towards industrialization, a tactic that would be repeated 2 decades later.Cheap labour: In the 1970's, a large amount of manufacturing activity was carried out in Japan and Taiwan, for re-export to western countries. China presented a new outlet for cheap labour, a fact that the Chinese government wanted to capitalize on.Slow rate of growth: China aped the Soviet economic model to a large extent from the 1950's. Though this led to a consistent growth of 4% per annum, this wasn't enough to sustain the economy, and did not solve the problem of unemployment.The Cultural Revolution was launched by Chinese community party chairman Mao Zedong in 1966 after the failure of the 'great leap forward' to challenge Communist Party officials for their bourgeoisness and lack of revolutionary zeal. This period was marked by a lack of stable leadership and vision in the communist party. Industrial production fell and constant shifts in economic policy retarded China's growth. The need for economic recovery and stable leadership eventually paved the way for Deng Xiaoping to emerge at the center. Deng Xiaoping came to power in 1976 and eventually introduced large-scale reforms in 1978.Key features of the Economic reforms* Abandoning community farming and the introduction of Household responsibility system: The system allowed households to lease out land from the collectives and use it with the help of family labour to produce what they liked...

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