Sara Hsu

 Rich in natural resources such as coal, zinc, copper, tin and mercury  Long eastern coastline with landlocked western border  Same size as United States but more mountainous  Divided into 31 administrative regions

 Industrial development in 1950s Modeled after the Soviet Union Produced enlarged proletariat Workers overwhelmingly concentrated in cities  Suppression of human rights (Cultural Revolution, Great Leap Forward)  Closed off to trade

 Turning point in China’s postwar era  The 3rd Plenum of the 11th CCP Central Committee in 1978 Deng Xiaoping’s ascendancy-open to growth and change economic modernization became focus  US-PRC established diplomatic relationship in 1979

 Market authoritarian  One party rule  Major role for state enterprises  Eclectic approach to free markets  Growth without political and economic rights  Performance-based legitimacy

 From central planning to indicative planning  From indicative planning to market allocation of goods and services  ``Grow out of the plan” instead of ``shock therapy”  Transition and growth at the same time

 1978 through 1989 Third Plenum Household Responsibility System Township and Village Enterprises developed in rural areas Decentralization-local governments supported enterprises State Owned Enterprises-small amount of autonomy given to them Tiananmen Square

 Reforms began smoothly  Economic growth accelerated  Nobody was made obviously worse  Opponents were bought off  Complex interdependence between state-owned enterprises and non-state sector  Government revenues eroded

 1992 to 2001 Deng’s Southern Tour in 1992-”to get rich is glorious” Elimination of dual-track system-prices sold on market Privatization-stock listing of medium and large enterprises Trade decentralization and liberalization-”Open Door Policy” Foreign direct investment Banking reform

 The People’s Bank of China nominally the central bank part of the central bureaucratic hierarchy  Policy banks and commercial banks  Reduction of provincial leaders’ influence over bank decisions  Loans to state-owned enterprises

 Encourage investment, export, and import preferential treatment for overseas capital  Gradual opening of the domestic market  Accession to the WTO (December 2001)  Trade expanded until end of 2008 when global crisis hit

 2001 to Present WTO entry Scaling up in export value chain Minimum wage changes Impact of the Great Recession

 Fifth, Sixth and Seventh Five-year Plan encompassed the agricultural sector and dual-track system of plan and market ( )  Eigth and Ninth Plan included Rise of the Market (1990s)  Tenth and Eleventh Plan was Arrival on World Stage  Eleventh Plan (2006) was first to focus on human aspect  Twelfth Plan (2011) can be called the Balanced Growth Period

 Political barriers to reform had to be overcome-opposition to marketization, negative attitudes—large success eliminated bad attitudes  Dominance of the Party used to advance the reform cause  Deng Xiaoping reaffirmed “socialist market economy” in 1992  Jiang Zemin and Zhu Rongji both reformists

 Income distribution reform  Ownership reform  Deep institutional reforms in the countryside and to provide supportive conditions for the revival of rural entrepreneurship  Rule of law  Political reform

 China’s gradualist approach to reform helped the country closely guide the economy toward successful developments and avoid domestic political conflict  Rural, urban, trade and financial sector reforms were all components of planning.