People’s republic of china - Economy

People’s republic of china


After the end of the Civil War China, the Government of the new People's Republic, under the leadership of the Communist Party of China began to implement a series of economic reforms in a society such as the nationalization of private enterprises and the collectivization of agriculture. Chinese leaders bet at first by the Soviet model of development based on an economic cooperation pact with the Soviet Union, which is reflected in the First Five Year Plan, of Soviet influence, which was developed between 1953 and 1957.

After the First Five Year Plan, the Chinese leader Mao Zedong decided to move away from the Soviet model and go for a massive mobilization of the population with the aim of increasing industrial development in China to the levels of most industrialized countries. Economic measures encouraged by Chairman Mao in the context of this campaign, which would be known as the Great Leap Forward, would be a failure and in 1958 the Communist Chinese began to reverse, stopping and reversing the policies adopted during this period. While the economic policies of the Great Leap were abandoned, the relations between China and its ally the Soviet led to open conflict, which left the Chinese regime further isolated in the international arena. Economic policies must take a back seat due to the intense ideological conflict within the Party, which is manifest in the Great Proletarian Cultural Revolution, during which many Party leaders were removed from power.

Deng Xiaoping in Washington on January 31 of 1979, during the establishment of diplomatic relations between the United States and the People's Republic of China

After the death of Mao and the arrest of the Gang of Four, the group of followers of Mao who was awarded full responsibility for the mistakes of the Cultural Revolution, the historic leader of the Party of Deng Xiaoping eventually gaining power and driving a series of economic reforms that marked the abandonment of many of the policies of nationalization and collectivization that characterized the Maoist era. While the State retained its role as planning, under the leadership of the Communist Party, began to encourage the establishment of private enterprises, while encouraging the entry of foreign capital needed to finance infrastructure development and an industrial base at that time, the late 70s, was still very poor.

Production of wheat between 1961 and 2003

View of Shanghai

Farmland in Langfang, a province of Hebei

As of 1979 the accelerated the rate of capitalist economic reforms, while maintaining the style communist rhetoric. The communication system was gradually dismantled and the peasants began to have more freedom to manage the land they cultivate and sell their products in markets. At the same time, China's economy was opened to the outside.

Economic reforms contributed to a very strong economic growth throughout the 80s. After the Army in protest of the Tian'anmen Square in 1989, international sanctions and uncertainty about the political situation drastically slowed economic growth. However, starting in 1992, Deng Xiaoping gave final backing for economic reforms, with its inspection of the famous southern trip in which visited the areas of greatest economic growth in the delta of the Pearl River and Shanghai. Following confirmation that the economic policy of maintaining the orientation of reform and opening up Chinese markets to foreign, economic growth rates reached unprecedented. In the year 1992 the GDP growth reached 14.2% remained at around 10% during the following years until today.

The reforms in economic policy from the government-sponsored, to encourage foreign investment, led the creation of special economic zones in coastal areas, where industrial development was concentrated to provide the large investments in facilities, utilities and building sites for housing workers, making China the world's largest manufacturing power, especially in the production of household appliances and textiles because of the low cost of labor, whose wages in the industrial regions around 70 euros a month. In fact, it is estimated that approximately 25% of all goods manufactured in the world occurs in China.

One factor in the development has been the treatment of most favored nation in trade between China and United States of America, which allows the entry of articles through the Chinese customs as if these were manufactured in the United States.

Since 2004 the European Union (EU) is the main trading partner of China, who is second largest trading partner of the European organization (See: People's Republic of China and the EU).

The opening process has begun on the coast allowed the coastal regions with a rapid economic growth rates averaging above 10%. Inland regions, however, have experienced a more moderate economic growth, with growth rates around 7%. The two marches off to open a gap between the coast and inland.

In January 2006, the National Statistics Department revised upward the value of total gross domestic product of the country, would have been underestimated in previous statistics. Because of this statistical review, the People's Republic of China (excluding Hong Kong or Macao) ahead of Italy in the ranking of countries by size of its gross domestic product, and once counted the growth of the year 2005 a 10, 1%, China's economy surpassed those of France and the United Kingdom becoming the fourth largest in the world with a total gross domestic product of U.S. $ 2,228,862,000,000. In the second quarter of 2006 was announced a rate growth of 11.3%, the highest since 1994.

On March 16 of 2007, the National People's Congress of China acknowledged for the first time private property by a law, widely debated for 13 years. The measure does not, however, the countryside and farmland, owned and loaned by the state in usufruct to the farmers.


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