China's Fifth cyclical Economic (1978-1980) Need 2000 words with full description. China's Fifth cyclical Economic crisis(1978-1980)

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Economics

China's Fifth cyclical Economic (1978-1980)
Need 2000 words with full description.
China's Fifth cyclical Economic crisis(1978-1980)

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Starting from the beginning of Chinas reforms in 1978 its economy has developed in stages of first rapid growth and then sluggish growth Given these fluctuations Chinas economic growth has averaged more than 10 per cent in real terms since 1990 and nearly that fast since 1978 over the entire period Nevertheless on the negative side an study of the growth cycles in China shows that every rapid and slow phase since the mid1980s has undermined the rural economy By 2005 the difference in per capita consumption between rural and urban areas had effectively returned to its prereform point of 1978 after significantly rising through the mideighties and staging a moderate recovery in the midnineties Prior to 1979 China developed a centrally controlled economy or order under the leadership of Chairman Mao Zedong The state regulated and managed a significant portion of the countrys economic performance which set production targets managed prices and distributed resources throughout most of the economy All of the individual household farms in China were collectivized into large communes during the 1950s In the 1960s and 1970s the central government conducted major investments in physical and human resources to enable rapid industrialization As a result almost threefourths of industrial output was produced by stateowned centrally managed enterprises SOEs by 1978 The Chinese Governments main objective was to make Chinas economy largely selfsufficient In general foreign trade was limited to purchasing those products which could not be produced or purchased in China These policies created economic distortions Because most facets of the economy were owned and controlled by the central government there were no market structures for efficiently allocating capital and therefore there were little opportunities for companies employees and farmers to become more competitive or to be concerned with the quality of what they produced because they concentrated primarily on governmentset output goals According to statistics from the Chinese government Chinas real GDP grew at an average annual rate of 67 from 1953 to 1978 although the accuracy of these figures was challenged by several observers some of whom claim that Chinese government officials especially at the subnational level frequently inflated production rates for a variety of political reasons during this time Economist Angus Maddison places the actual annual average real GDP growth in China at about 44 per cent during this time Moreover under Chairman Mao Zedongs leadership Chinas economy suffered major economic downturns including during the Great Leap See Answer

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