Bingzhe
Xu
12/18/2012
Final
Policy “Reform and Opening up” in
China
China can be divided in two parts; one
part that is Mao ruled from 1949 to 1976, another part is from 1976 until now. China
has a great change when a Policy was implemented called “Reform and Opening up”
in 1978. This paper will introduce the background of this policy, what this
policy process is, and what advantage and disadvantage.
The
background of Policy
The Culture Revolution was launched by
Mao in 1966, which want to exterminate capitalism in China. Mao thinks it is
still exists struggle classes in China and some people want to walk in the
“capitalist road”. This movement barely destroyed Chinese economy and culture.
China never made a little improvement during this Culture Revolution. “At that time, Mao’s personality cult
is very serious; some important nation leaders like Deng Xiaoping, Liu Shaoqi
were defeated because of against Mao.”[1]
After
Mao dead in 1976, Deng Xiaoping took power of China again. China still had bad economy and Chinese had
low living standard level. Planning economy exists in everywhere. Although Mao
had dead, China still has strongly struggle classes and market economy is a
symbol of capitalism, people were worried about if reforming is a good decision. “Already
in 1977, Deng Xiaoping made it clear that performance should be the main
consideration in the economic and social advancement of individuals. In other
words, professionalism and results should count. Furthermore, he emphasized the
importance of academics and scientists for the future of the economic
development and the international standing of China. He thought that this
should be more widely recognized by the Chinese people. During 1978, Deng Xiaoping’s
reform philosophy gained growing support in the CCP and its desirability was accepted
in December 1978 at the Third Plenary Session of the Eleventh Central
Committee. This session proved to be a turning point in the direction of China’s
policies for its economic and social development.” [2] Deng
Xiaoping wanted to reform Chinese economy that market decides everything. After
this national
conference, National leader made a common that we need to stop this struggle
classes and personality cult. Developing economy and let people had a good
living standard important than other things. Then, Chinese government made a
policy called Reform and Opening up and this policy is used until now.
Reform
The first step reforming is agriculture. In 1981, government made a policy called
household-responsibility system, which means every farmer be responsibility to
some farm, farmers need to hand in a set number of crops and others can be
decided free by themselves, all profit and loss belong to farmers, but the land
still belong to nation. “Before
government made this policy, in 1979 similar experiments began in Sichuan and Anhui
provinces, both seeing dramatic increases in agricultural productivity. Deng
Xiaoping openly praised these experiments in 1980, and the system has been adopted
nationwide since 1981.” [3] This policy
encourages farmers plant some crops with high profit that let farmers have high
income and better lives. “This change of
system now made a big difference. Instead of the local authorities
concentrating on their grain-quota collections from the farmers, and the
farmers having to fend for themselves in their sideline occupations like the
sale of pigs and chickens, now the whole community could join in planning to
maximize production and income. The result was a massive increase in both, a
triumph for Deng’s reform. In the 1980s rural production grew about two and a
half times, far ahead of population increase. This was due to new motives of
personal profit, new means in sideline production of poultry fish, vegetables,
fruit for market, and the like, and new opportunities for work in local service
industries.” [4]
Government also reform urban industry. In 1979, government
set up four special economy zones: ShenZhen, ZhuHai, ShangTou, and Xiamen. Deng
created a series of special economic zones for foreign investment that were
relatively free of the bureaucratic regulations and interventions that hampered
economic growth. These regions became engines of growth for the national
economy. During planning economy, nation only permit state-owned industries
exist. Deng Xiaoping break it, he permit private business to operate. In
special economy zones, government gave local private business some benefit
policy and made they had high competitiveness.
But serious problems soon confronted this new effort. “Once provincial and
local governments had the opportunity, they move rapidly into light-industry
production of consumer goods for profitable sales to meet market demand, but
the price structure was still controlled from the center and not left to the
free play of market forces, intense competition among local governments and
enterprises produced not only great expansion of light industry but also many undesirable
side effects: shortages of basic supplies, bidding up of labor cost, blockading the
products of one area to prevent their sale in another.” [5] However, The People’s
Bank of China became the central policymaker and overseer for specialized banks
dealing with industry commerce and agriculture. It tried to solve the problem
the nation that meet and provide the capital for this policy. In addition, special
economy zones government use some policy to attract foreign investments.
According to this way, foreign enterprises use technology to switch market. In
most areas, it succeeds. In 1991, Shanghai was finally permitted to initiate
economy. Now, shanghai is a famous city in the world.
Opening
Government though agriculture and industry to
reform the domestic economy. Government has another way to increase economy.
Foreign investment was also liberalized upon Deng's ascension. Special Economic
Zones (SEZs) were created in the early 1980s to attract foreign capital by
exempting them from taxes and regulations. This experiment was successful and
SEZs were expanded to cover the whole Chinese coast. When people
this experience had a good result,
government tried to implement it in whole nation. Guangdong
was a good example and relatively successful in launching its economic “take
off” and in achieving what growth by the middle of the 1980s. “Hong Kong
allowed the new entrepreneurs in support and the transfer of technology from
their highly successful cousins in the colony. Hong Kong also provided a
powerful example to the people and the political leaders of Guangdong, by
encouraging them to push hard for material success and to end the
three-decade-long period of socialist austerity.” [6] Chinese government also
put their effort on the trade with foreign countries. The government reduced tariffs and
trade barriers like tariff rate falling from 56% to 15%. When China joined the
WTO, it agreed to considerably harsher conditions than other developing
countries. “Trade has increased from under 10% of
GDP to 64% of GDP over the same period. China is considered the most open large
country; By 2005, China’s average statutory tariff on industrial products was
8.9 percent.” [7]
Get and Lose
In
1990, China’s average per capita national income was around $350. Within a
decade, there was a threefold increase, taking the figure to $1,000. At the end
of 2008, the figure tripled yet again and China’s average per capita national
income reached another high of $3,000. From this data, we can find Chinese have
a better life. In 1970s, people get married had three big things, bicycle,
sewing machine, and watch; in 1980s, television, washing machine, and radio
instead of them. Today, car, house, and travelling are to be new three things.
During these years we can people living standard become better and better.
However, gap between rich and poor become bigger and bigger. “The latest survey by
Central China Normal University's Center for China Rural Studies noted that the
cash income of rural households grew 14.13 percent from a year earlier to an
average of 38,894.4 Yuan ($6,173.7) last year, and the per capita cash income
in rural areas rose 11.95 percent to 9,260.6 Yuan ($1,469).” [8] We can know Chinese
households income is 4 times than farmers from this statistics. The fact is
more and more famers give up farming and choose do some low-income jobs in the cities,
but their income still better than farming. Although government gives farmers
some privilege policies, they do not have many effects.
China
develops economy with high speed during 30 years, which make Chinese
environment damage seriously. In the past, government want to more GDP, they
choose ignore the environment issues. But now, pollution is a big problem in
China. Air and water pollution can be found in most cities. In the west
of China,
local government gets some
tax income
from deforestation that let land desertificational. Depending on environmental
damage to get low-efficiency economy is become a big problem in China. Although
government is aware of seriousness of problems and try to adjust and improve
the economy development model, but these problem still exist.
When
China opens the door, technology, job opportunity, and competitiveness are
brought by foreign enterprises. Foreign cultures also come in China. Teenage
accept all the foreign cultures because of curiousness. They seldom distinguish
which is good or bad. Social has a little fickleness, people always like using
money to measure one thing. Some Chinese traditional culture and value were
ignored gradually by people. Local Gross Domestic
Product (GDP) is to be the most important in government officials’ eyes;
because when the local economy has a good condition, government officials have
a good opportunity to be promoted. So some local government can do anything for
GDP such as agree high pollution enterprise to stay in the city, issue bonds
wantonly to make invest, and sell land wantonly to estate agent for building. This
policy makes China stronger and stronger, but it let Chinese lost their culture
and value gradually, which inherit from Chinese ancestor and has thousands
years history.
Due
to this policy “Reform and Opening up” China becomes an important part in the
world. Every Chinese is benefit from this policy. This policy let China catch
up the step of world. However, below them China still faces
some problem and challenge that cannot be ignored.
Reference
1. http://en.wikipedia.org/wiki/Cultural_Revolution
[1]
2. Clem
Tisdell “Economic Reform and Openness in China: China’s Development Policies in
the Last 30 Years.” School of Economics The University of Queensland. [2]
3.
http://en.wikipedia.org/wiki/Chinese_economic_reform [3] [7]
4. John King Faribank “China A new History” The
Belknap press of Harvard university Press Cambridge, Massachusetts London,
England 1992. [4] [5]
5. Christopher J. Smith “China People and Places
in the land of One Billion” Westview Press 1991. [6]
6. http://www.eetimes.com/electronics-news/4394451/Yoshida-in-China--Rich-poor-gap-dangerously-widens
[8]
