Economic Rehabilitation and Modernisation in China

Economic Rehabilitation and Modernisation in china frugal REHABILITATION AND MODERNISATION PROGRAMME1.Post Mao Interlude(a) Fall of the Gang of quaternary, leadership under Deng Xiaoping restated the modernization program.(b) They also set bran- youthful policies for accomplishing the Four Modernizations which was to turn the nation into a comparatively advanced industrialized nation by the year 2000. The modernizations was to be in the field of industry, agriculture, skill and technology, and national defence.(c) The new policies reinforced the authority of economic decision makers and managers at the expense of party officials, and called for expansion of the research and education systems .(d) Foreign trade was intended to be increased, and exchanges of external experts and students with developed countries was advance. It called for high rates of growth in both agriculture and industry.(e) The economy was reformed to a market oriented economy.2.Reforms in Agriculture Sector .(a) Maos polity of self-reliance was relaxed, and his motto grow grain everywhere was abandoned.(b) Communities were restructured into the responsible system wherein farmers no longer devoted maximum of their efforts in collective production alone farmers were allowed to decide for themselves how and what to produce.(c) The constraints on the movements of inelegant populations was relaxed. Towns, villages, and groups of families referred to as rural economic unions established factories, processing units, construction teams, catering services, and other nonagricultural concerns.(d) A system of specialized ho accustomholds was do wherein free farmers markets in the urban areas and in the countryside were established.(e) Rural cadres implemented an entirely new system to motivate farmers, called Baogan system.(f) The rural banking system (Agricultural Bank and Rural citation Cooperatives) was restored and extended1.(g) However, the major(ip) change was after 1978 farm families w ere permitted to invest funds, and their investments in small tractors, rural industries, and housing were substantial.(h) Rural marketing system improved significantly in the post Mao period. The constitution of selling the farm to local state came to an end. People had several options of selling the surpluses to local market or to state or consumed on the farm. Rural markets which were disbanded during the Cultural rotary motion were reopened.3.Reforms in Industrial Sector.(a) The impetus to reforms were ground on the framework of Four Modernizations and industrial policies outlined by Deng Xiaoping. These involve alter management and managerial rules, restoring the status of engineers and technicians, providing clear directives for realizing the eight planning targets ( output volume , product type, quality , consumption of materials and fuel, labor productivity, costs, profits and use of liquid chapiter) , greater regional coordination, firmer central planning and tighter control of investment policy and increased import of conflicting technology2.(b) Emphasis on rapid industrial development was given and a group of 120 key large outgo projects was central to the plan which aimed at lifting the rate of growth to the value of industrial output to 10 percent ayear and at large increases in the areas of power, fuels, raw materials and transport and communications including doubling the output of steel3.(c) In 1978 policy of Thirty points was envisaged which include rules for enterprise management and post responsibility , state plans was to be fulfilled based on five sixes ( fixed nature and scale of production, fixed personnel and organization ,fixed consumption and supply quotas, fixed capital allocation and relation of cooperation with other enterprises)4.(d) In 80s the growth of commingle economy with complementaritys between the plan and market competition was promoted5.(e) Mandatory planning covered sixty products such as sear, crude oil, nonf errous metals, timber, cement, basic industrial chemicals, chemical fertilizers, machines and electrical equipment, fibers, newsprint, cigarettes, and defense products.(f) Under the reforms of Guidance planning, enterprises try to meet the states planned goals but also make their own arrangements for production and sales based on the orientation of the states plan, the availability of raw and unfinished materials and brawniness supplies, and the demands on the market.(g) Urban, collectively owned enterprises (owned by the workers) for the most part were small units equipped with relatively little machinery. Many of these units were engaged in handicraft production or other labor-intensive activities, such as manufacturing furniture or assembling dewy-eyed electrical items.(h) Rural, collectively owned industrial enterprises commonly referred to as township enterprises were the most rapidly growing portion of the industrial sector in the mid-1980s. The organization regarded them a s a means of smashing industrialization6.4. increase of Infrastructure.(a) mainland China had inadequate transportation systems which hindered the movement of coal from mine to user, the transportation of agricultural and light industrial products from rural to urban areas, and the delivery of imports and exportings. As a result, the underdeveloped transportationsystem constrained the pace of economic development throughout the country. From 1980s onwards the modify of transportation systems was given priority7.(b)Development of Railroads.(i) Priority was given to link all provinces of the country, by railroads. Many double-track lines, electrified lines, special lines, and bridges were added to the system.(ii) National highways linked provincial-level capitals with Beijing and major ports.(iii) Roads were built between large, medium, and small towns as well as between towns and railroad connections.(iv) Contract system for the management of railroad lines was introduced in China .(c)Development of Waterways.(i) The maritime fleet made hundreds of port calls in virtually all parts of the world, but the inadequate port and harbor facilities at home liquid caused major problems.(ii) Port construction also was listed as a priority project in the plan. The combined accommodation cognitive content of ports was to be increased by 200 million tons.(d)Development of Airways.(i) Civil aviation underwent tremendous development during the 1980s. Domestic and international air service was greatly increased.(ii) The plan also called for update passenger and freight transportation and improving railroad, waterways, and air transportation. To achieve these goals, the government planned to increase state and local investment as well as to use private funds.5.Reforms in Trade Policies, Foreign Trade and Emerging New Market.(a) Abandonment of policy of Self Reliance. Between 1975-80 China got into new trade activities, seeking to import technology, borrow money, request ai d and adopt fresh methods of earning distant exchange.(b) Policies were framed to bring in foreign technology and capital with minimum expenditure8.(c) To earn more foreign currency and to conserve foreign exchange reserves, foreign capital was also used to expand production of export commodities, such as textiles, and of import substitutes, such as consumer goods.(d) China has adopted a variety of measures to promote its foreign economic relations, maximizing the role of imports, exports, and foreign capital in economic development. Foreign trade organizations were reorganized, and control of imports and exports was relaxed or strengthened depending on the balance of trade and the level of foreign exchange reserves.(e) China joined a number of economic organizations, becoming a member of the World Bank, International Monetary Fund, the Asian Development Bank, the General Agreement on Tariffs and Trade (GATT).(f) Most loans went into infrastructure projects, such as slide fastener and transportation, and funded raw materials imports.(g) Legal and institutional frameworks to facilitate foreign investment and trade also were created. Laws on taxation, vocalise ventures, foreign investments, and related areas were promulgated to encourage foreign investment.(h) Special economic zones were created .The special economic zones essentially were export-processing zones designed to attract foreign investment, expand exports, and import technology and expertise.(j) China took steps to decentralize its foreign trading system and integrate itself into the world trading system. In November 1991, China joined the Asia peaceable Economic Cooperation (APEC) group, which promotes free trade and cooperation in the economic, trade, investment, and technology spheres.(k) China formally joined the WTO in December 2001.On joining China agreed to lower tariffs and stamp out market impediments after it joins the WTO.(l) Chinas global trade totaled 1384 one thousand thousand doll ars in 2005 the trade surplus stood at 60 billion dollars. Chinas primary trading partners include Japan, the EU, the United States, South Korea, Hong Kong, and Taiwan. According to U.S. statistics, China had a trade surplus with the U.S. of 150 billion dollars in 2005.6.Foreign Investment(a) Foreign investment was stalled in 1989 in the aftermath of Tiananmen. In response, the government introduced legislation and regulations designed to encourage foreigners to invest in high-priority sectors and regions.(b) In 1990, the government eliminated time restrictions on the establishment of joint ventures and allowed foreign partners to become chairman of joint venture boards.(c) In 1991, China granted more preferential tax treatment for wholly foreign-owned businesses and contractual ventures and for foreign companies which invest in selected economic zones or in projects encouraged by the state, such as energy, communications, and transportation.(d) China revised significantly its laws on Wholly Foreign-Owned Enterprises and China Foreign Equity Joint Ventures in 2000 and 2001, easing export performance and domestic content requirements. In 2005, China received nearly 53 billion dollars in foreign direct investment, making it the number one recipient of FDI in the world.7. Energy and Mineral Resources.New energy policy was formalized which included development of indigenous oil and gas reserves, development of domestic oil and gas markets, diversification of energy sources, diversification of imported energy suppliers, encouragement of energy conservation and efficient energy use.(b) Reforms carried out to improve energy efficiency and promote the use of clean coal technology. Only one-fifth of the new coal power plant capacity installed from 1995 to 2000 included desulphurization equipment.(c) It has opened oil and gas industry. The offshore petroleum industry has also been developed with foreign investment.(d) Refining capacity is also being increased. Storage a nd pipeline facilities are being increased and new ones are being added.(e) China has developed a sound energy policy by diversifying its energy linkages and relationship through investment attraction , incentives for technology and dialogue with energy resource economy.8.Development of Science and Technology.(a) The Cultural Revolution had removed an entire generation from access to university and professional training, creating a gap in the age distribution of the scientific work force.(b) However since 1978 China encouraged experimentation in its science and technology system as a means of arriving at reforms.(c) In restructuring the science and technology system emphasis was set on encouraging partnership between research, educational and designing institution on one hand and production units on the other and on strengthening the enterprises capability for technology absorption anddevelopment .More power for decision making was granted to research institutes.(d) The long term p olicy of Chinas science and technology development was to open to outside world and establish contact with other countries.1 Agriculturereforms www.country-data.com2 yap gray and Gordon White op.cit p.913 Jack gray and Gordon White op.cit p.924 Jack gray and Gordon White op.cit p.955 Jack gray and Gordon White op.cit p.986Chinas economy www.country-data.com 19877 ibid8 Jack gray and Gordon White op.cit p.149