Economic Reform & Social Implications in the PRC

The creation of the People's Republic of China (PRC) was proclaimed in 1949. For 30 years thereafter, the economic policies pursued by the PRC generally were consistent with doctrinaire communist ideology. Economic reforms were introduced by the government of the PRC in 1978, although the Chinese Communist Party retained and continues to exercise political control in the country.

This research examines economic reform and the implications of that reform in the PRC. Relevant background information on the PRC and the country's economy is presented as a part of this introduction. Following the introductory material, the nature and consequences of economic reform in the PRC is reviewed.

As the official policy of the government of the PRC from its inception was to trade with all countries, whether or not diplomatic relations had been established, business entities from most countries, other than the United States, developed trading arrangements with China in the 1950s and 1960s (Koo, 1990, pp. 797-820). During the 1950s, Chinese foreign trade was heavily oriented toward the Soviet Union. By 1959, 48 percent of China's foreign trade was with the Soviets. Political disagreements between the two countries, caused Soviet trade to drop to only 7.5 percent of China's total foreign trade by 1966 (Manatoo, 1990, pp. 63-79).

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rated on the country's agricultural sector. The name responsibility system was applied to economic reform in agriculture (Koo, 1990, pp. 797-798). The responsibility system has been described as an incentive farming scheme. While this description is true, as far as it goes, the responsibility system is far more complex and comprehensive than simply an incentive farming program. Centralized planning and control is maintained in agriculture, to the extent that minimum production quotas continue to be established, and must still be met (Huang, 1990, p. 90). These quotas are designed to insure that basic food supplies continue to be available for Chinese cities. Under the responsibility system, however, each Chinese farm family is granted a small plot, which they are permitted to cultivate for their own benefit. The primary responsibility of each farm family continues to be the fulfillment of its commune production quota. Once the family quota is met, however, all production from family plots may be sold on the open market, at prices established by the market (Manatoo, 1990, pp. 63-79). The goal of the responsibility system is an increase in incentive for farm families, which, it was hoped, would be translated into an overa
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Approximate Word count = 3090
Approximate Pages = 12 (250 words per page)

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