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The process of economic development and its effects in China in 1950s - Research Proposal Example

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The reason was the aftermath of Second World War, which was ended in 1945. China was in war with Japan. In 1945, after the war, the Soviet troops brought most of the industrial tools…
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The process of economic development and its effects in China in 1950s
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The process of economic development and its effects in China in 1950s

Download file to see previous pages... e considerable damaged after the war, which became the reason that the food production reduced to approximately 30% lower than the peak level, which was achieved before the war. All these factors lead the Chinese economy in crises and the country had to face the hyperinflationary environment. The Chinese Govt aimed to restore the economy to its normal level within the time span of 3 years. In order to achieve the goal of economic recovery, the Govt started working with full devotion to recover all the losses. The recovery phase began with the reconstruction of the transportation system along with the recovery of other losses such as loss of communication system and invests on farming to recover the natural resources. The central bank of China, which is named as Peoples bank of China, was established in the year 1948 with the responsibility of maintaining the monetary control along with the regulation of all the financial institutions within the jurisdiction of China. During the establishment of Peoples Bank of China, the banking system was neither nationalized nor centralized. During the economic recovery phase of China, all the financial institutions were nationalized and centralized. The regulating authority of the banking system remained the Peoples Bank of China. In order to control the high inflation, which was generated due to the effects of the World War II, the Govt of China decided to synchronize the economic structure of China by centralizing the financial market of China (Mark 2013).
The purpose of centralizing the banking system was that the monetary system could be unified. The Govt initiated the decisions to control the economy which includes monetary policy and extremely restricted credit facility. Another reason behind such restricted economic policies during the period of 1949 to 1952 was that the Govt had very restricted budget to recover the economy. In addition to this, during the same period Govt was compelled to also manage the ...Download file to see next pagesRead More
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