Economic Policies of China

Aiming to rapidly transform the country from an agrarian economy into a socialist society through rapid industrialization and collectivization, Mao Zedong led the Great Leap Forward campaign. This campaign included the introduction of mandatory agricultural collectivization, prohibition of private farming, and the persecution of those engaged in those activities. Restrictions were also enforced on rural people through public struggle sessions, social pressure, and forced labor. However, the great leap forward ended in disaster and resulted in tens of millions of deaths. After Mao Zedong’s death, the People’s Republic of China was left with no central authority figure and Deng Xiaoping then came to power to reform the Chinese economy and government institutions. Deng introduced the policies of reform and openness and proposed his idea of Socialism with Chinese characteristics. He carried out reforms in agriculture and industry, introducing the Responsibility System to rural areas in which peasants were given private plots and had full responsibility over their land. Deng Xiaoping then also reformed state enterprises to increase the productivity of the society and gave full control to individual enterprises over their own operations which meant their profits and losses. He also introduced new incentives such as piecework, overtime, bonus payment, profit sharing, etc. With these new policies and reforms, Deng was able to open up China to the outside world. The government set up Special Economic Zones and Economic Open Zones, as well as coastal and inland cities for foreign investment to speed up economic development, which marked the beginning of private economy and foreign investment in China. China has now one of the world’s largest and most advanced economies and has been claimed to be one of the richest, most fertile, best cultivated, most industrious and most prosperous countries in the world. The success of China’s economic policies and their implementation has resulted not only in a developing economy but also resulted in immense changes in Chinese society.