China's economic growth and market reforms since 1978

¶ … China is equivalent to Europe in many ways in terms of its internal development and the kind of impact it has on countries around it. It is important to understand China's current rapid growth and its economic, political, social and cultural influence through the prospective of its earlier growth and influence.

Early Influences

China's civilization was recognized for centuries as one of the most important in the world. China "outpaced the rest of the world in the arts and sciences, but in the 19th and early 20th centuries, the country was beset by civil unrest, major famines, military defeats, and foreign occupation. After World War II, the Communists under MAO Zedong established an autocratic socialist system that, while ensuring China's sovereignty, imposed strict controls over everyday life and cost the lives of tens of millions of people. After 1978, his successor DENG Xiaoping and other leaders focused on market-oriented economic development and by 2000 output had quadrupled (www.cia.gov/cia/publications/factbook/geos/ch.html)."

Impressive Record

China has maintained an "impressive economic record which has somewhat contradictory implications about the role of the state in development. Its heavy industrial development occurred under absolute state control of the economy during the Maoist period, but by the late 1970s, Maoism had become an economic disaster, leading to a fundamental change in strategy under Deng Xiaoping. For most of the 1980s, Deng's reforms focused on internal marketization, however a major reorientation in strategy occurred in 1988, when Beijing decided to emulate the export booms of other Asian countries by producing labor-intensive goods for markets in advanced industrial societies (Jung)."

This resulted in a relaxation of regulations by China regarding "joint ventures with foreign firms and discouraging low-tech investments (Jung)." The increased capital from other countries, particularly those with companies who could no longer pay its employees low wages to produce products, rose significantly and resulted in a "rapid rise in export, with light industrial goods and products by multinational corporations prominent in this export surge (Jung)."

Conclusion

For years, China was known as a world leader in terms of economic and political growth. While it was surpassed during the past couple of centuries by other countries, China has begun to realize an astonishing rate of growth. Influences from China's rich history can be attributed to many of its current successes. Also, China's dynamism comes not from the state-dominated parts of the economy, but from entrepreneurial firms and organizations, both domestic and foreign. Few besides the Communist Party leadership would argue that the People's Republic of China has a successful development state (Jung)."