The last two decades has seen the growth of the Chinese economy thatensured the nation acquired the status of the industrialized nations.More important, the rapid development of the economy was a result ofthe economic reforms that the government initiated in 1978. From thatpoint, the nation was able to make proper changes that restructuredthe various fields. For instance, the government changed the communalsystem and ensured that the farms were owned individually and thedecision increased the agricultural products. The state-ownedenterprise was a crucial step that made sure that the organizationswere independent, accessed enough investment and created more profitsas well. The Open-Door policy was also another move that enhanced theforeign trade that boosted the nation. This research paper evaluatesthe reforms that nurtured the rapid growth as well as the future ofthe Chinese economic outlook.
The rapid growth of the Chinese economy was the result of theeconomic reforms that were initiated in 1978. First, the changesfocused on agriculture where the officials changed the commune systemand distributed the land to the various individual households(Taplin, 2016). In fact, the way that the farms were ownedindividually resulted in a higher amount of the agricultural yields.Enough food supply provided enough foundation that supported theother sectors that were being developed. The introduction of thestate-owned enterprises allowed the companies to have enough autonomyin making the marketing decisions, investment, as well as theproduction, approaches to be adopted (Hou, 2011). By 1980, the firmshad increased their total output since they were allowed to befinancially independent and retain a huge amount of the earningsafter they had paid the required taxes. The Open-Door policy was alsoinstrumental in improving how the nation conducted some of itsbusiness activities (Hou, 2011). In particular, the approach was ableto allow other foreign companies to invest in China and that markedthe end of the closed economy that had undermined the economicgrowth. The reforms were critical in pushing China to be one of thehuge industrial nations in the world.
The huge number of the labor force and competent leaders are thecritical factors that facilitated the rapid growth of the Chineseeconomy. In this case, the nation had enough human capital that wasable to implement the reforms that the government had suggested. Infact, they had built a culture of hard working people that investedtheir time and resources in improving their wellbeing (Meng et al.,2013). The Chinese civilization since the Shang Dynasty proves thatthe nation was focused on improving their economy. Hence, theeconomic reforms gave the government a chance to improve theeducation, industrial, investment, and the financial performance inorder to be one of the powerful nations. Besides that, the leadersguided the country in making some critical decisions that they wereon the right path. For instance, Deng Xiaoping and Zhao Ziyang aresome of the leaders in the 1980s that ensured the entire nation hadsupported the changes that improved its economic outlook (Meng etal., 2013). The leaders were able to facilitate the implementation ofthe policies and the approach ensured that the growth was quicker.The reforms were embraced with the civilians perfectly, and that ledto the success that the nation has achieved so far.
The future of the Chinese economy is bright since the support fromthe government, and the favorable financial conditions will increasethe chances of success. First, the leaders have nurtured anenvironment that facilitates the efficient implementation of thepolicies in the long-run. For instance, they have allowed theenterprises to operate freely without any restrictions. Joining theWTO will be a bold move that will ensure that the nation trades withother members (Taplin, 2016). The government should also improve theeducation system and the information systems that will increase thelikelihood of the young people accessing more knowledge on the waythat the economy works. On the other hand, the dynamic market forceswill also stabilize the economy and ensure that the nation has enoughlabor supply to work in the industries. The Open-Door policy will bean important move that will allow the foreign companies to invest invarious fields (Taplin, 2016). The approach will also be helpful inmaking sure that the young people are able to get job opportunitiesand a platform to improve their skills. All in all, as long as thegovernment maintains the reforms and introduces other ones, it ismore likely that they will be a powerful economic power in the world.
In conclusion, China improved its economy when it implemented thereforms in 1978. First, the nation was able to ignore the communalsystem, and the government ensured that the individual householdowned the farms. In this case, the opportunity was able to double upthe agricultural products that the nation had. On the other hand, theOpen-Door policy was also a move that also led to China ignoring theclose economy and allowing increased foreign trade. The scenarioallowed other nations to invest in China and open more jobopportunities as well. Besides that, the state-owned enterprises werequite useful in making sure that the firms have more investments aswell as the financial independence. The government did not interferewith the operations of the enterprises since they were allowed togive a small part of their taxes and retain the rest of the profitsas well.
Hou, J. W. (2011). Economic reform of China: Cause and effects. TheSocial Science Journal, 48(3), 419-434.
Meng, X., Shen, K., & Xue, S. (2013). Economic reform, educationexpansion, and earnings inequality for urban males in China,1988–2009. Journal of Comparative Economics, 41(1),227-244.
Taplin, Nathaniel. (2016, Dec 16). The Simple Truth about China’sEconomy. The Wall Street Journal. Retrieved from:http://www.wsj.com/articles/the-simple-truth-about-chinas-economy-1481612410