The People's Republic of China (PRC) plays a major role in the post-Cold War world. It is the world's most populous nation with approximately 1.2 billion people, and the third largest in land mass after Russia and Canada. It has nuclear weapons and is a growing military power. As one of the five permanent members of the UN Security Council, China has veto power over Security Council resolutions dealing with key multilateral issues, including international peace-keeping and the resolution of regional conflicts. China is also undergoing extraordinary economic growth and promises to be a significant economic power early in the next century. This research explores the economic development of the PRC and considers the special relationship between the PRC and Taiwan.
The People's Republic of China was proclaimed on October 1, 1949, following the victory of Communist forces over the Kuomintang government, which fled to the island province of Taiwan. The new Communist regime received widespread international recognition, but it was not admitted to the United Nations in 1971 as representative of China (replacing Taiwan).
From 1949 to the late 1970s, virtually all policies relating to the allocation of resources and the distribution of income were controlled by the central planners of the State Council in Beijing. Committed to a program of economic self sufficiency, China traded only with countries that shared its puritanical Marxist philosophy such as Cuba, North Korea, North Vietnam, and Albania. Under Premier Deng Xiaoping, the Communist party began a process of economic liberalization in 1978 which subsequently led to the ending of agricultural communes, the creation of "special economic zones," and an initial attempt at privatizing state-owned industries.
From 1953 on, the Chinese economy was subject to central control within the framework of five-year plans. The Eighth Five-Year Plan (1991-1995) and 10-year development pr...