Q.5:- China’s rapid industrial growth can be traced back to its reforms in 1978. Do you agree? Elucidate.
Yes, China’s rapid industrial growth is traced back to its reforms in 1978, which were introduced in phases. In the initial phase, reforms were initiated in agriculture, foreign trade and investment sectors. Commune lands were divided into small plots which were allocated to individual households for use and not ownership. They were allowed to keep all income from the land alter paying stipulated taxes. This led to an increase in agricultural productivity. In the later phase, reforms were initialed in the industrial sector. Private sector firms, and township and village enterprises, were allowed to produce goods. Enterprises owned by government (known as Stale Owned Enterprises-SOEs), were made to face competition at this siege to enhance their efficiency. Dual pricing was involved in reforms. Prices were fixed in two ways; farmers and industrial units were required to buy and soil fixed quantities of inputs and outputs on the basis of prices fixed by the government and the real were purchased and sold at market prices. Market mechanism gained strength over the years as the proportion of goods or inputs transacted in the market increased with rise in aggregate production. This contributed to greater efficiency. Special economic zones were set up in order to attract foreign investors for aiding in capital formation in the country for expanding output.