Modernization Of A Poor Communist Country

1619 WordsJun 15, 20157 Pages
Introduction China’s thirty year run of almost 10% GDP growth is legendary and there are many reasons for this phenomenal growth. The journey of a poor communist country of the 1950s to a world economic superpower today reads like a novel comprised of economic plots and sub-plots along the way. After the establishment of the People’s Republic of China in 1949, the country started on the path to industrialisation in earnest. The hallmarks of industrialization were the consolidation of socialist governance and increased control over the domestic migration of labour, which paved the way for the administration of the planned economy. This dramatic system of economic reform has benefited China in many ways. However, there are still a number of issues which the country needs to address if it wants to maintain long-term economic stability. 1952 to 1978 In the 1950s China had a meagre national growth rate of 3%. To speed up the industrialization process the government increased investment in heavy industries such as steel, concrete and heavy machinery. The growth that happened during this period was more a result of increase in physical and human capital than an increase in productive efficiency. The production activities of State enterprises were determined according to the government plan rather than market signals. The State enterprises were inefficient, employed redundant workers (as mandated by the socialist state system), and there was little market demand for the

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