Knowing China
Based on over five decades of accumulated knowledge, this invaluable book offers an insight into China through its history, culture, people, economy, education, science and technology, as well as government and political system.
TABLE OF CONTENTS Knowing China
Chapter 3: The Economy
The Chinese economy has been growing very rapidly in the last 25 years. It is now essentially capitalistic. China is ruled by the Chinese Communist Party and it did practice central economic planning for 25 years from 1953 to 1978. As an economist interested in China, I have followed the development of the Chinese economy since 1980. Some of my research is reported in Chow (1985, 1994, 2002). Here I will try to answer a few important questions concerning the Chinese economy for the general reader. What was the Chinese economy like before 1949? What is its current condition? How large is it? How fast is it growing and can it be expected to grow rapidly in the next two decades? How much income disparity is there among different regions? What are the strengths and weaknesses of China's economic institutions and their special characteristics?
China's Economy before 1949
Let us begin with the state of the Chinese economy in the 1930s before the Sino-Japanese war started in 1937. It was essentially an agrarian economy with over 85 percent of the population engaged in agriculture. However, industrialization had taken place and financial markets had been developed. In spite of political instability as described in Chapter 1, the Chinese with energy and resourcefulness were able to develop the economy under the existing set of market institutions, while the government was developing the economic infrastructure. The economy in the 1930s was a well-functioning market economy.
The Chinese farmers knew how to farm, as...
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