e occurrence of significant changes in the structure and the management of the Chinese domestic economy. Some of these changes, however, have proved to be unpopular with large segments of the Chinese population, and others have led to demands for greater political freedom. As a consequence, Hu Yaobang, architect of Chinese economic reform, was forced to step aside, some of the reforms, such as price freedom, were suspended, and the general pace of reform was slowed to a crawl. Nevertheless, significant changes in the economic environment of the PRC remain in place in the early spring of 1989.
In the spring of 1989, it is too soon to tell the eventual shape the PRC's economy will take, as a result of the readjustments. While the domestic economy of the PRC will probably never be a market based economy, as that term is understood in the west, it is likely that the country's economy will never again return to what, initially, was supposed to become a model Marxist economy.
ECONOMIC REFORM IN CHINA
Economic reforms in the PRC proceeded on two separate, but related fronts. The first front involved only the country's domestic economy, while the second front was concerned with increasing foreign participation in the PRC economy. Internal economic changes were concerned primarily with the degree of centralization in economic management, while those related to increasing foreign economic participation were concerned with developing the parameters of such participation (Cannon, 1983).
Decentralization Reforms
Although Chairman Mao Ze Dung was determined to construct a model Marxist economy in the new PRC, that goal did not mean that the resulting economy would necessarily resemble any of the other socialist economies in the world. The reason for possible differences between the PRC economy and those of other socialist countries was that, although the government of the PRC...