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China - Essay Example

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Still, the shortcomings were numerous. The main drawback was rooted in the relationship between the state and business. In a rigid command system, an…
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Download file to see previous pages... country was changing. Radical restructuring of the economy has become an objective necessity “since the 1970s when they started shifting to a postindustrial service-based economic structure (in part as a reaction to earlier oil price shocks in the 1970s).” (Winters and Yusuf 150).
Beginning late in 1978, the reform was fully developed after the XII Congress of the Chinese Communist Party (1982) and strengthened its position as a result of the decisions of the XIV Congress (1992). Important milestones were the XIII Congress (1987), which gave a detailed interpretation of the initial stage of socialism theory and the XIV Congress, which decided that the reform is to create a socialist market economic system with Chinese specifics.
The main objective in the domestic politics of China became the recovery of productive forces through a set of market type economic reforms. Strategically far-sighted was the decision of the Chinese leaders about gradual implementation of reforms, taking into account national specifics, according to folk wisdom - Crossing the River by Feeling for Stones. In 1979 – 1983, the interim target of the reform was to complement the command economy, which was still predominant, with market regulations under state control. Practice of the transformations’ start-up phase included expansion of enterprises’ economic independence, creation of special economic zones, recovery of individual and collective structures in the economy, the first attempts to introduce market principles in pricing and sales of engineering products and household goods which had no ratios. The biggest breakthrough was the elimination of the former ineffective system of rural people’s communes.
The new economic model included the following: 1) complete economic independence of enterprises; 2) replacement of directive planning by guiding; 3) free, under state regulatory functions, buy and sell of consumer goods and means of production; 4) creation of the ...Download file to see next pagesRead More
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